Santander Bank Case Study

Issue Identification

How should Santander execute its strategy in order to face the current financial crisis?

Analysis

The company

Santander is an^[a] bank which mission states: “consolidate as a large international financial group”. In order to analyse^[b] the business is important to understand its mission since it reflects the future goals the company is trying to achieve through its operation, and therefore any strategy or action to consider should be consistent with the mission.

Having said that^[c], we can evaluate the current situation and strategy of Bank Santander.

Bank Santader^[d] was founded in Spain, and by 2008 it had became ^[e]one of the market leaders in the banking sector, along with BBVA, its main competitor. Both banks had made acquisitions and fusions through the years and finally they became the two largest banks in the country with a market share of 40.25% for Santander and 29.72% for BBVA.

About Santander´s internal situation as an global enterprise, it had a business model based retail banking, and it was exploited through choosing attractive markets to penetrate them with a wide presence in each of these countries, which meant the bank had an enormous global network. This represents a competitive advantage since the company had already established processes and platforms that could easily replicate and adapt to its new acquisitions, maintaining and improving commercial efficiency in each bank of their network.

Being a global company means a competitive advantage in costs efficiency, because the company has experience in managing people, costs, systems and specific risks in different regions which makes them stronger than local competitors.

The industry and environment

Globally, it had became^[f] one of the then largest financial organizations as a result of its acquisitions in America and other countries in the Eurozone. As CEO Alfredo Sanchez said “growth is in Santader´s blood^[g]”.

On the other hand, by this date many other banks worldwide, were being bought or closed as they fell in bankruptcy due to the financial crisis that broke out that same year in the United States.

Since Bank Santander had a stable and healthy financial situation by this time, the financial crisis presented itself as an opportunity for this enterprise, because it could easily continue acquiring banks the way it had been doing, as a part of its growing strategy. Buying banks in this crisis period, meant for Santander paying lower prices for their acquisitions rather than buying them at regular market prices in other moment.

This means that Bank Santander could buy banks with lower efficiency ratios and poor financial results or even banks with bankruptcy risk, in order to get better prices and then fix the internal situation of these institutions using the Santander's IT systems and operational processes in order to improve the results of these banks.

...