Alpen Bank Case Study: Gregory Carle Decision

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Alpen Bank
Executive Summary
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Gregory Carle, the Romanian country manager for Alpen Bank, must decide whether or not the bank should launch a credit card program in Romania. Before deciding to go through with the credit card launch Carle must be certain that the Romanian credit card market is large enough to add € 5 million in annual profit to Alpen Bank’s Consumer Banking segment. Carle has two real options here, he can either choose to launch the credit card program or he can choose to do nothing. If Carle decides to offer the credit card program he will need to choose how to market and who to market the credit card to. In order to find out if the credit card market is lucrative enough to warrant launching the product, Carle, must first take a look at Alpen Bank’s current business in Romania. Alpen first entered the Romanian market in 2000 and has since grown to over 200,000 customers and 15 branches. Alpen bank has mainly catered to affluent Romanians and has established itself as the bank for the wealthy. Since 2000 the Romanian economy has improved and incomes have risen dramatically especially within the affluent and middle classes. Since Romania joined the EU affluent Romanians have began to prefer branded products over locally made less expensive ones and have increased their demand for luxury items. With this the demand for cards has grown with both debit and credit cards growing 35% in 2006. I found the total number of middle, affluent and most affluent Romanian citizens as well as the total potential revenue of each market segment based on these numbers. (Exhibit A,B). Under my analysis I believe the time is right for Alpen to enter the credit card market. According to Carle’s forecasting I concluded Alpen would add 58,969 affluent credit card customers in year 1 which would amount to € 400,619.35 in profit (Exhibit C,H). I then assumed Alpen would come close to matching year 1’s results for year 2 but wanted to allow...
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