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Agricultural Bank of China’s Business Strategy Case Study

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Agricultural Bank of China’s Company Overview


Agricultural Bank of China Limited is one of the "Big Four" banks in the People's Republic of China. It was founded in 1951 and has its headquarters in Dongcheng District, Beijing. It has branches throughout mainland China, Hong Kong, London, Tokyo, New York, Frankfurt, Sydney, Seoul, and Singapore. The Bank provides a range of corporate and retail banking products and services for a broad range of customers and conducts treasury operations and asset management. Our business scope also includes, among other things, investment banking, fund management, Financial leasing and life insurance.

www.abchina.com

Country: Beijing

Foundations date: 1951

Type: State-owned

Sector: Financials

Categories: Financial Services


Agricultural Bank of China’s Customer Needs


Social impact:

Life changing: heirloom

Emotional: provides access, reduces anxiety, rewards me

Functional: reduces risks, saves time, avoids hassles, simplifies, reduces effort, quality


Agricultural Bank of China’s Related Competitors


China construction Bank ING Group Banco do Brasil Industrial & commercial Bank of China Itaú Unibanco Holding Groupe BPCE

Agricultural Bank of China’s Business Operations


Cross-selling:

Cross-selling is a business strategy in which additional services or goods are offered to the primary offering to attract new consumers and retain existing ones. Numerous businesses are increasingly diversifying their product lines with items that have little resemblance to their primary offerings. Walmart is one such example; they used to offer everything but food. They want their stores to function as one-stop shops. Thus, companies mitigate their reliance on particular items and increase overall sustainability by providing other goods and services.

Brokerage:

A brokerage firm's primary responsibility is to serve as a middleman, connecting buyers and sellers to complete transactions. Accordingly, brokerage firms are compensated through commission once a transaction is completed. For example, when a stock trade order is executed, a transaction fee is paid by an investor to repay the brokerage firm for its efforts in completing the transaction.

Cash machine:

The cash machine business model allows companies to obtain money from sales since consumers pay ahead for the goods they purchase, but the costs required to generate the revenue are not yet paid. This increases companies' liquidity, which they may use to pay off debt or make additional investments. Among several others, the online store Amazon often employs this business model.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Customer loyalty:

Customer loyalty is a very successful business strategy. It entails giving consumers value that extends beyond the product or service itself. It is often provided through incentive-based programs such as member discounts, coupons, birthday discounts, and points. Today, most businesses have some kind of incentive-based programs, such as American Airlines, which rewards customers with points for each trip they take with them.

Best in class services:

When a firm brings a product to market, it must first create a compelling product and then field a workforce capable of manufacturing it at a competitive price. Neither task is simple to perform effectively; much managerial effort and scholarly study have been dedicated to these issues. Nevertheless, providing a service involves another aspect: managing clients, who are consumers of the service and may also contribute to its creation.

Brands consortium:

A collection of brands that coexist under the auspices of a parent business. The businesses in this pattern develop, produce, and market equipment. Their strength is in copywriting. Occasionally used to refer to a short-term agreement in which many companies (from the same or other industrial sectors or countries) combine their financial and personnel resources to execute a significant project benefiting all group members.

Cross-subsidiary:

When products and goods and products and services are integrated, they form a subsidiary side and a money side, maximizing the overall revenue impact. A subsidiary is a firm owned entirely or in part by another business, referred to as the parent company or holding company. A parent company with subsidiaries is a kind of conglomerate, a corporation that consists of several distinct companies; sometimes, the national or worldwide dispersion of the offices necessitates the establishment of subsidiaries.

State-owned:

As rivals or subjects of study, Chinese businesses' emergence on the world stage necessitates or creates a new category of business models: state-owned enterprises. These enterprises typically do not exist for profit but rather to offer critical goods and services to society that cannot be supplied economically by established firms. This model is characterized by fixed pricing, monopoly access to consumers, an advantage in exploiting resources, minimal or no tax obligations, and recurring financial losses.

Self-service:

A retail business model in which consumers self-serve the goods they want to buy. Self-service business concepts include self-service food buffets, self-service petrol stations, and self-service markets. Self-service is available through phone, online, and email to automate customer support interactions. Self-service Software and self-service applications (for example, online banking apps, shopping portals, and self-service check-in at airports) are becoming more prevalent.

Private level banking:

Private label banks allow any business with a sizable client base, brand, or unique technological solution to operating as a private label bank. Private banking refers to the customized financial and banking services to its affluent high net worth individual (HNWI) customers. HNWIs generally have more money than ordinary individuals, enabling them to access a broader range of conventional and alternative assets. Private banks' goal is to connect such people with the most suitable alternatives.

Lock-in:

The lock-in strategy?in which a business locks in consumers by imposing a high barrier to transferring to a competitor?has acquired new traction with New Economy firms during the last decade.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.

Why Agricultural Bank of China’s Business Model is so successful?

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