Over the past century we have gone through three globalizations. The first, in the years before World War I, was based on mass commodities and infrastructure investments. The second, which only outstripped the first wave of globalization beginning in the 1980s, focused on mass manufactured goods and the capital equipment. Now, we are entering a third stage of globalization – one that is layered on dimensions of the prior two – in which the center of profitability has shifted toward the retail interaction. This trend is called “Global Retail”, or, less euphonically, “globalization”. The goal of this assignment is to see how a successful European retail banking organization confronts the opportunities and challenges of globalization. Therefore, the article focuses on how they make their loans and tries to find the differences between their strategies, which appear to be well suited to the fragmented regulatory market in Europe, and the U.S. model of consumer lending.
1. Please describe and evaluate the Country/Political Risk faced by this organization and describe its successes and failures.
2. What has been the lending strategy followed by Santander? Are lending decisions based on the credit background of the borrower, or on the riskiness of the venture? How do they manage risk? How do they finance their loans? Why is there so little cross-border borrowing?
3. How is the lending strategy different to US commercial banks?
4. As a consultant to the CEO, what would you suggest Magda Salarich do now? Please obtain, identify and evaluate the data and conduct a multi-perspective analysis of the evidence to make a logical recommendation for solving the problem with a global perspective.
5. Defend your recommendation and communicate your beliefs clearly and accurately.
• Appendix A
is the case you must read in order to answer above questions: you got the Santander case!
• Appendix B
shows how you are getting the tools of Global Learning for Global Citizenship by answering the above questions and their weighting in the project.
• Appendix C
is an example of a rubric that highlights what Professor is looking for when grading your report for each question. This rubric can be matched to the questions above. Students should read Appendices B and C carefully in order to have a comprehensive understanding about how an essay is evaluated.
• HBP Case Analysis Worksheet
• Steps for Effective Case Analysis