MANAGING

BUSINESS
GROWTH
CIM Membership Number: xxxxx
Table of contents

Contents
Table of contents ........................................................................................................................................... 1
List of Figures: .............................................................................................................................................. 3
List of Tables: ............................................................................................................................................... 4
Executive Summary ...................................................................................................................................... 5
Organisational summary ............................................................................................................................... 5
1A - Scoping the opportunity ........................................................................................................................ 6
Three possible growth opportunities ......................................................................................................... 6
1B – Internal impacts .................................................................................................................................... 9
Competitive environment analysis .......................................................................................................... 10
Competitive environment........................................................................................................................ 11
Changing buyer behaviour ...................................................................................................................... 12
Environmental Impact:............................................................................................................................ 14
Task 2 – Determining direction .................................................................................................................. 15
Most viable growth option ...................................................................................................................... 15
Positioning strategy ................................................................................................................................. 15
Value creation ......................................................................................................................................... 17
Current culture, capabilities and resources ............................................................................................. 17
Future culture and agility ........................................................................................................................ 17
Responsiveness ....................................................................................................................................... 18
Strategic Partnership ............................................................................................................................... 18
Task 3 – Moving forward to growth ........................................................................................................... 19
Market entry strategy .............................................................................................................................. 19
Appraisal of organisational structure ...................................................................................................... 19
Key metrics ............................................................................................................................................. 20
In conclusion ............................................................................................................................................... 21
Appendices.................................................................................................................................................. 22
References ................................................................................................................................................... 25
List of Figures:

Figure 1 Adapted, Enhanced Ansoff matrix (Grünig R., Morschett D, 2017), highlighting the three strategic
growth opportunities. .................................................................................................................................... 6
Figure 2 Trading economics.com - China vs. European Union GDP Annual growth rate ........................... 8
Figure 3 The growth potential of ETFs in China over the coming years expected to by hugely positive. ... 8
Figure 4 Mckinsey 7s, Highlighting the S for Staff, Strategy and Style ....................................................... 9
Figure 5 Source: ETF market share landscape........................................................................................... 11
Figure 6 Current competitor positioning ..................................................................................................... 11
Figure 7 Adapted Sheth buyer behaviour model, showing how Millennial high net worth customers’ buyer
behaviour will change to investing in ESG funds ....................................................................................... 13
Figure 8 Positioning map, showing ABCs current position vs Expect future positioning .......................... 16
Figure 9 ABCs new customer demographic as a marketing persona.......................................................... 16
Figure 10 Source: Nielsen global social responsibility survey, 2015 ......................................................... 22
Figure 11 Adapted porters 5 Forces Analysis ............................................. Error! Bookmark not defined.
Figure 12 Source Business School Publishing. Harvard Business Publishing is an affiliate of Harvard
Business School. Customer lifetime value tool: Harvard ........................................................................... 23
Figure 13 Adapted VRIO model ................................................................................................................. 23
Figure 14 Source Edelman Trust barometer (UK), Showing percentage of trust in financial services,
compared to other sectors ........................................................................................................................... 24
Figure 15 UBS Market Watch, Millennial investors seek advice from friends and family in making
investment decisions avoiding IFAs ........................................................................................................... 24
List of Tables:

Table 1 Main Competitors ............................................................................................................................ 5

Table 2 Source data pew research centre, 2018. 5 demographic categories and associate age range ........... 7
Table 3 Strategic importance of Influencers and platforms and decline of IFAs ....................................... 18
Table 4 Balanced scorecard, recommended metric to measure the effectiveness of selected key stakeholder
relationships customers, partners, staff and shareholders are the most important stakeholders. ................ 20
Executive Summary

Organisational summary
Organisation Name: ABC Finance

ABC Financial provides investment advisory services. It primarily provides its services to pooled
investment vehicles (funds). The firm also caters to pension and profit-sharing plans and sovereign wealth
funds. It manages separate client-focused portfolios. The firm also launches and manages fund of funds and
hedge funds. It invests in the public equity markets.

Type of organisation: Asset management subsidiary of a European based investment bank

Size of organisation:

 Assets under management: EUR 140.8 billion

 Group revenue: 25.2 billion in 2017
 No. employees: 600

Customer base: Institutional B2B/B2C

 Insurance companies
 Banks
 Pension funds
 Corporate clients
 Asset managers
 Private wealth managers & Family offices

Main competitors

Table 1 Main Competitors

1A - Scoping the opportunity
Three possible growth opportunities
ABC is at an impasse, the ETF industry in Europe is reaching industry lifecycle maturity and at the same
time full saturation as more competitors enter the ETF market. The need for growth is imperative for the
future success of the business. The table below presents three opportunities for growth which will be
explored further in this section.

Figure 1 Adapted, Enhanced Ansoff matrix (Grünig R., Morschett D, 2017), highlighting the three strategic growth opportunities.

The three numbered options outlined in the matrix are potential opportunities that ABC could invest in to
create growth.

1. By creating new products and services the business could improve market penetration by targeting
Millennial investors and achieving customer diversification.
2. Using existing products and services tailored geographically the business could expand into Asia
achieving geographical diversification.
3. Thirdly the business could target customers via acquisition. This potentially could take various
routes, targeting the same end user customers in the same geographic location, moving into a new
geographical locale, using existing products or new products at the same service level or higher.
The matrix suggests that of all three opportunities acquisition provides the broadest set of
possibilities.

The complex nature of ABCs distribution chain means that making horizontal diversification, vertical
diversification or vertical forward diversification wouldn’t be viable for the business. The regulatory
framework in place means that unlike Dell or Amazon the business wouldn’t be able to own the whole or
majority of the supply chain. Realising growth from these opportunities will require a different tact. The
analysis below critically discusses the rationale behind these competing strategies.
 Rationale: (1) Tailoring ABC’s ETF capabilities to Millennials

The UK has an aging population according to (Pew, 2018) the shift in population demographics means that
Millennials are now the largest demographic outnumbering baby boomers and generation X while also
becoming economically powerful due to being of working age. As ABCs current target demographic ages,
a prudent strategy would be to cater for the next demographic group who are Millennials.

Table 2 Source data pew research centre, 2018. 5 demographic categories and associate age range

Shift in demographics: According the Financial Times, 2018 Millennials account for 25% of the world’s
population, by 2020 they are forecast to make up 35 % of the global workforce over taking ABCs current
target market of baby boomers and Generation X

Shift in customer behaviour: Millennials don’t share the same

consumer profile as their baby boomer and gen X counterparts.
A recent Nielsen study concluded that Millennials are more
sustainability conscious than other demographics, with almost 3
out of 4 respondents willing to pay extra for products and
services from companies who have positive social and
environmental impact.

Competition is limited: Presently few asset managers cater

specifically to Millennials and those that do, don’t necessarily do it well. ESG funds that should
appeal to this demographic, have been criticised for greenwashing. A recent FT article “How green is your
portfolio” pays particular attention to this phenomenon. These widely used tactics have caused Millennials
to be sceptical of funds that purport to be green. This is a good opportunity to bring something to market
that is better than the competition and satisfies customer demand.

Rationale: (2) Expansion into Asia

China represents a significant opportunity for ABCs market growth, its huge population, continue
economic growth and with an investment cycle that is still in its infancy make expansion
potentially highly lucrative for the business.
Population potential: China has a 1.3 billion populations (World bank, 2019) with a growing middle class
which is estimated to be 400 million (CISI, 2017)

Economic growth: China is the world’s second largest economy (World Bank, 2019) and continues to
grow relatively steadily in comparison to Europe. The chart below illustrated this.

Figure 2 Trading economics.com - China vs. European Union GDP Annual growth rate

----- European Union

----- China

Beginning of ETF Lifecycle: The US ETF industry is nearing the end of its life cycle with Europe set to
follow. In comparison China is at the beginning of the cycle.

Figure 3 The growth potential of ETFs in China over the coming years expected to by hugely positive.
 Rationale: (3) Acquisition
The business has historically relied on acquisition as a growth strategy as this provides, quick growth
that appeases shareholders in the short term.

Fast growth: Acquiring a smaller firm such as source ETF would increase market share by 3.6%,
consolidating the market and propelling ABC to 2nd largest ETF provider after iShares and ahead of
Amundi and Deutche Bank.

Share price increase: successful acquisitions typically raise the share price of the acquiring company
assuming that the acquired company isn’t bought at a premium

Better economies of scale (cost cutting): Combined synergies of the two companies mean that costs
can be cut through operating efficiencies.

1B – Internal impacts

Figure 4 Mckinsey 7s, Highlighting the S for Staff, Strategy and Style

Using Mckinsey’s 7s model, the most important S is Staff. One aspect that will have an impact on all
strategic options will be diversity as described below.

Staff: ABC is typical within the asset management industry, there continues to be a lack of diversity
especially in higher level C- Suite roles. Although some work has gone into discussing gender equality
since the UK ruling was introduced requiring companies to publish pay results, change continues to be slow
within the organisation. As well as the common diversity identifiers such as race, religion sexuality diversity
ABC should be actively engaged in in hiring and retaining staff with differing mindsets. The impact of
having a diverse pool of employees has been proven to be both socially and economically beneficial.

 Decreased profits: According to Mckinsey Co. ABCs lack of diversity is detrimental to the
company’s profits, in a recent study conducted they found that companies in the top quartile for
racial and ethnic diversity are 35 percent more likely to have financial returns above their respective
national industry medians, showing how important diversity can be.
  Less adaptability and innovation: Lack of diversity has also been shown to affect the levels of
innovation and adaptivity of teams. An HBR study (Hewlett, S. et al., 2018) on diversity has shown
that employees of firms with diversity are 45% more likely to report a growth in market share over
the previous year and 70% more likely to report that the firm captured a new market. This suggests
that a lack of diversity can make it harder to go into new markets given the lack of cultural
knowledge.

 Lack of empathy with end client: As the previous section demonstrates having a diversity
increases employees’ ability to relate to their end client. Hiring employees who are not necessarily
ethnically diverse but have a diverse mindset means they are more likely to make diverse hiring
choices. This is counter to the instead of the typical hiring culture that sees hiring managers
recruiting people with the same sort of experience and background as themselves. An example of
this would be the hire more Millennial recruits who understand the drivers of Millennial customers
because they are part of that group.

If ABC takes strategy (1) forward tailoring an offering to Millennials, for the strategy to be well received
it will need to feel genuine to Millennials. Inclusivity in ABCs internal hiring processes shows that the
focus on Millennials isn’t just tokenism and the business is interested in creating a social consciousness.

Strategy

With accessible capital, ABCs strategy toward growth has traditionally been through acquisition, however
this approach is results in short term wins. In increasing growth this way the company has focussed less on
innovation and new ways to encourage growth. While shareholders are typically impressed at any type of
growth, it is cyclical in nature and doesn’t provide long term growth or mitigate against disruption within
the industry.

Style
ABC like other asset managers has a strong bonus culture. This can have a strong incentive can lead to a
strong resistance to change. Sales of cash cow products are heavily relied upon rather than innovative new
products that may be harder to sell.

Competitive environment analysis

The asset management industry is competitive, as shown in the ETF market share chart below the top three
competitors hold 65% of the whole market, size and buying power play a significant role in both perception
in the market place and operational ability. ETF products are considered high risk an there fore customer
will make a highly considered decision. The decision process is a more protracted journey therefore strong
brand name and reputation are key to gaining market share. A recent study (ABC, 2018) determined that
91% thought that brand was an important factor in making their ETF buying decision. This is echoed in the
market share held by the top three performing ETF providers, who also have the largest brands.
 Figure 5 Source: ETF market share landscape.

Source: www. FT.com

Competitive environment
ABCs main competitors can be identified as Amundi and DB X trackers. iShares is also a competitor
however, the gap in market share is so wide that they are not a direct competitor at this stage, this is also
true of Source, SPDR, and Vanguard. Fig 6 shows the positioning that each hold in comparison with ABC.

ABC

Figure 6 Current competitor positioning

The Porters Five forces analysis in appendix Fig B. shows that the barriers to entry in ETF industry are
relatively high, to access the asset management industry challengers will have high fixed and sunken costs
requiring a large amount of capital. In addition, the industry is highly regulated the cost of keeping up to
date with compliance and mitigating against the threat of litigation are barriers to entry. Lastly the industry
is trust and performance based, with many companies in the industry being hundreds of years old, young
challenger brands find it almost impossible to set up. As a long-standing incumbent ABC is in a good
position to reap the benefits of barrier to entry.
One caveat is that the Investment and banking industry has faced extreme challengers in perception over
the past 5 years due to its unsustainable approach to business highlighted in the Credit Crunch of 2008.
According to the annual Edelman trust barometer (See appendix Fig E.) financial services is one of the least
trusted sectors in the UK scoring just 51% in 2019, a marked improvement on 2015s score of just 31%.

Changing buyer behaviour

 As suggested earlier buyer behaviour for Millennials is expected to continue to change

considerably. Research from Business Insider (2019) shows that almost 1/3 of Millennials hate
‘dealing with people’. They prefer automated systems that allow them to cut out human interaction
altogether.
 This shift impacts ABCs current business model in that presently it is based on relationship
management. The key benefits of the services provided via individual financial adviser (IFA)
include regular contact with a relationship manager ABCs distribution network is predicated on
this type of interaction with Baby boomers and Gen X.

 In addition, Millennials think differently in terms buyer behaviour their motivations are more
altruistic than previous generations, the 2018 Deloitte Millennial (survey explains that Millennials
believe that companies should be including varying objectives including:

- Making a positive impact on society and the environment,

- creating innovative ideas products and services,
- Job creation, career development and improving people’s lives
- An emphasis on inclusion and diversity in the workplace

Millennials have a strong sense of social conscious and look to align themselves with companies
and brands that match with their values. They are willing to pay a premium for these products and
services as seen in the chart below, 10-12% of Millennial respondents are willing to pay more for
CSR credentials.
Figure 7 Adapted Sheth buyer behaviour model, showing how Millennial high net worth customers’ buyer behaviour will change
to investing in ESG funds

 At the top the model shows the current behaviour that Millennials have toward investing in ETFs
and in particular green washed funds.
 At the start of the model both external and internal stimulus are creating attention around the ESG
funds that are robustly green.
 The attention from sources such as financial influencers and online peer reviews are trusted by
Millennials more so than institutions or experts such as independent financial advisers (IFAs) who
Baby Boomers rely on for trusted advice. At this stage there is a heightened motivation to invest in
a suitable ESG ETF funds with a trusted brand. The attitude is then a desire to buy an ESG fund
that has true ESG credentials, which leads to a positive intention to invest and ultimate purchase
decision.
 Once a purchase has been made and the feedback loop is confirmed, confidence is reinforced in the
brand and products leading to repeat purchases.

The analysis above is limited to the UK market, should the strategic plan endorse expansion into Asia, or
an acquisition, a more thorough analysis will need to be conducted to identify the buyer behaviour of ABCs
new target demographic. In Asia there may be nuisances in the way in which the target demographic makes
financial purchases. The buyer behaviour of customers acquired through an acquisition would be dependent
on what type of company/ brand is purchased.

Expansion into Asia

Investor education Chinese consumers are at the beginning of the ETF lifecycle which means that there is
still an educational strategy required to make expansion into Asia viable. A study carried out by DBX
trackers shows that 54.9% of Asian investors do invest in ETFs however, they constitute a very small
number within each portfolio. There is still a lot of investor education that needs to take place to encourage
more use of ETFs.

Barriers to entry: Although in recent years the Chinese market has opened up, the prevailing buyer
behaviour is to buy local. Consumers tend to buy into trusted local brand rather than challenger western
brands.

Acquisition

The buying behaviour of acquired customer can be unpredictable. Brand loyalty has been built with the
acquired firm and once purchased; customers can decide to leave. Mckinsey reports that in a typical
acquisition between 2-5% of customers leave due to badly handled integration. A similar effect can be seen
with employees who may no longer feel that their values are matched in the acquiring company.

Going into the Asian market would require a strong investment in branding in addition to educating the
investment population as to why they should invest in ETFs rather than the more commonly active
management. The prevailing monetary culture especially in China is to save, however that is typically with
in a savings account rather than in and investment.

Environmental Impact:

Using the PESTLE framework, the following macro implications have been identified for the three growth
strategies.

1. Tailoring ABC’s ETF capabilities to Millennial customers:

Social: Research by Nielsen (see appendix) shows that Millennials, have different priorities to
other demographics, sustainability is a driving force in their purchase decisions. As the largest
demographic group this effect is likely to keep growing. Millennials are more sustainability
conscious than any other demographic.

Technology: Millennials are digital natives; they typically experience their world online. They
seek out new technologies that will save time and make them more efficient. Brands that are
sought out usually have strong technological features. This demographic relies heavily on
technology, to attract them any new offering will need to have strong technological credentials
any platform or app will need thorough design that really cater to Millennials. Millennials have
been a catalyst for disruption in many industries. New brands like Monzo and Starling in the
banking sector show the momentum for such innovation is growing within the financial sector.

2. Expansion into Asian market:

This is likely to encounter significant political and legal implications. According to the US
Bureau of Economic and Business Affairs, foreign investors can be disadvantaged by policies
that favour Chinese companies. The financial system is heavily influenced by the Chinese
government. According to the Chinese review (2017) China strictly regulates foreign
investment, permitting only some direct foreign investment through Chinese entities with
partial or full foreign ownership.

3. Acquisition
 The greatest political concern in implementing this strategy is Brexit. This is still an unknown
variable as political infighting means that no firm decision has yet been taken, which has a
knock-on effect to the business in that it’s not clear if ABC will continue to be able to sell
products across boarders as is currently available via ‘Passporting’. An acquisition in the UK
would allow company which is based in France to grow and have a bigger foothold in the UK,
thus capitalising on the strategic investment that has been ploughed into the UK over the past
decade.

As the company grows larger this strategy will become harder, as legal regulators such as the
competition and markets commission may take the view that ABC holds too much of a
Monopoly. This has been seen recently with the merger of Sainsbury and Asda being vetoed.

Task 2 – Determining direction

Most viable growth option
In conclusion the most viable long-term growth opportunity would be a move to cater to Millennial clients.

Acquisition has traditionally been used by the business to gain market share, and has been consistently
successful in creating short-term gains, but also caused challenges for example with integration.

Entry into new markets has in the past had mixed success rates, while a successful launch into China could
be hugely profitable the challenges at the present time make this a less viable option to take forward.

Looking at the Porters’ 5 forces analysis in Fig B (see appendix) the three growth potentials are colour
coded red amber and green, showing the riskiest strategy would be to expand into Asia, given the high
levels available substitutes and competitive rivalry in Asia. In the same ranking criteria acquisition the
second least risky and diversifying to a Millennial demographic was the most viable option.

Millennial market growth presents as the best option to take forward. Millennials are the biggest consumer
ESG products and shows that the way they shop is different from previous generations in order to cater to
this market the business will need to make a dramatic shift in the way it does business.

Positioning strategy
The shift toward Millennial clients and ESG products requires a significant move in the companies
positioning.

Currently ABCs investment in ESG is in line with most competitors, with no industry wide definition of
ESG funds aren’t always as green as clients would expect. Access to ESG funds aren’t very fast and easy
due to legacy finacal systems making the process very analogue.

To be seen as a serious ESG provider and avoid scrutiny greenwashing ABC needs to move into the upper
right quadrant of this perception map.

The current structure of the business restricts this, so a calculated solution coud be to create a separate
brand. The new brand would allow ESG ETFs to be the main focus. Creating a ESG only brand would
creat the opportunity to become the market leader due to first mover advantage. ABC could determine what
the ESG standard that other ETF providers woud have to meet in order to be credible in the market place,
which would decrese the amount of greenwashing in the industry.
Figure 8 Positioning map, showing ABCs current position vs Expect future positioning

Figure 9 ABCs new customer demographic as a marketing persona

Value creation
A recent study (SmarterHQ, 2019) shows that only 7 % of Millennials consider themselves brand loyal.
Creating a new brand provides the opportunity to develop ESG products that are credible and that stand out
against competitor offerings and more likely to create a strong sense of brand loyalty.

Customer lifetime value analysis in Fig C. (See appendix) gives a predicted customer lifetime value of the
typical High net worth (HNW) Millennial over the next 5 years as being $39,600. The model suggests that
the figure would decrease, year on year however unlike most retail sectors this isn’t the case in finance. As
customers age, they typically become wealthier. The CLV in finance is typically high, the emphasis for
ABC should be to retain existing customers rather than trying to acquire new customers.

Current culture, capabilities and resources

ABC currently has a fully functioning asset management organisation. The structure is a hierarchal matrix
structure. Typical function including sales, marketing (front office), finance, accounting, human resources
(middle office) and IT, compliance (back office).

 The culture at ABC is a traditional asset management culture. The staff have long tenures, with 20-
30 yrs. not unheard of. This positively shows retention rates, however can be a hinderance to the
adaptability of the business to changing environments.
 As mentioned previously there is a strong bonus culture, which has at times incentivised teams,
contrary to the overall business objectives.
 ESG products have been launched in the past but the sales figures show that little effort has been
used in selling these products. In comparison to traditional cash cow’s funds that sell broad index
exposures such as the S&P 500, there is a reluctance from sales to promote ESG products given the
lack of financial incentive
 The mindset towards innovative growth higher levels can be limiting. Employee surveys show there
is scepticism on the future of the ESG market and reluctance to believe in the disruptive change a
shift in demographics will make to the business fundamentally.

For the reasons listed above it would be clearly beneficial for ABC to create a separate brand to experiment
with this new target demographic. The cultural shift needed to accommodate this strategy is too big to make
it feasible in the current structure. The internal stakeholders support required to make this venture successful
over the next few years isn’t available currently. ABC is currently competing well in the market place, as
the third largest provider of ETFs, there are no push factors that would make this attractive to middle
management, especially as ETFs are still in a growth market.

Building a separate brand allows the opportunity for the ABC to not only gain market share but potentially
disrupt the ESG sector with first mover advantage.

Future culture and agility

In creating a new brand ABC would be able create a new agile business structure. The benefits of creating
a separate entity are wide ranging.

For the business

 ABC can use this business to experiment with this new structure and target demographic using a
‘skunk works’ team to develop the brand and offering.
 If the experiment was successful this shift could be made to the parent business. Conversely if the
experiment wasn’t successful the damage to the parent brand would be minimal, the business could
be dissolved or sold.
 There would be less scrutiny from shareholders by creating a private company
For customers

 The new brand able to maintains presence as wholly ESG and sustainable company. the culture
will need to run through the whole organisation. This includes a minimalist office space, potentially
located in a more tech focused location such as the silicon roundabout.
 Millennials less likely to be distrustful of the brand as it is distanced from ABC

For employees

 The business gives an opportunity to work for a company that is essentially a start-up but with less
concern about lack of capitalisation the support from a larger institution
 The business will offer challenges and opportunities to work within a more diverse group, with
hiring to consciously apply a diversity and growth mindset t potential candidate.
 The structure will be flat, allowing younger team member the opportunity to have “a seat at the
table”
 New terminology used to democratise roles, abandonment of terms such as back office, which can
diminish the important roles being performed.
 Heavier focus on IT to create a digitalised seamless user experience, admin to run on new more
intuitive IT systems that have fewer legacy constraints.

Responsiveness

In creating a new ‘skunk works’ team the capabilities required to create the new brand are marketing,
product development, IT, finance and capital, and analysts. The team would be very light meaning that
roles potentially would need to merged, people in the team would need to be comfortable with taking on
dual roles. The skeleton structure would be advantageous in the company could remain nimble and agile
while also saving on costs.

Strategic Partnership
Table 3 Strategic importance of Influencers and platforms and decline of IFAs

The table shows that platforms are currently the most important strategic relationship ABC have They will
continue to be so if this strategic option is elected to be taken forward.

 Strategic relationships with IFAs will be eliminated. The research in Fig F of the appendix shows
that IFAs are the least sought-after advice givers for Millennials, who seek out advice from family,
friends and referrals.
 Ties with influencers, commentators and bloggers will need to be established as these are key areas
Millennials seek out advice. Having a younger work force that can relate and effectively
 communicate with such influencers is critical. Another advantage of having a sustainable brand is
that social media experts will look to work together.

Millennials prefer digital forms of communication over face to face, a survey by Accenture (Millennials
and money, 2019) asserts that 65% of Millennials would like to use gamification to learn more about funds
and investment strategies in addition would like a self-directed investment portal proving that IT investment
and closer links to platform strategic partnerships are likely to be lucrative.

Additional research would need to be carried out to determine if HNW Millennials differ in their
communication requirements. The more general research into Millennials suggest that digitalisation is key
to this strategy, technology such as apps and seamless access to platform are hugely important tools for
targeting HNW Millennial investors.

Task 3 – Moving forward to growth

Market entry strategy
The growth strategy of diversifying to cater to Millennial clients allows ABC to target new customers
within an existing market, namely HNW Millennials. In order to test if this new market will thrive as
anticipated with out risking harm to the current brand.

The brand needs to be distinct from ABC and imbue the following criteria:

 Education – Millennials as discussed previously are the least trusting generation. In order to teach
them about ETFs and explain the new brands unique selling points an educational campaign will
be required targeting the right customers.
 Digital capabilities – Millennials are described as digital natives, unlike previous generations, this
demographic is the most digital literate after Gen Zs. Broadridge, 2017 explain that Over the next
two years, more than half of Millennials expect to use digital technology for a wide range of
investment activities, including technology-enabled financial planning tools, Customized products
and investment services. As this generation gets older the figures are likely to increase, this shows
that improving digital capabilities today put the new brand in a very strong position in the future.
 Products tailored to audience – Millennials, more so than previous generations are socially
conscious and a prepared to pay extra to synergise their values and investments. To attract the HNW
Millennials proposed ABC needs to tailor funds that fully demonstrate the companies ESG
investing capabilities. The aim of the new brand is to offer a unique proposition in the market place.
This is because the Funds wouldn’t be Greenwashed, they would be created for purpose meaning
that every aspect would meet rigorous standards.
 First mover advantage gives ABC the opportunity to work with influencers and sustainable brands
such as Greenpeace in creating the standard for all ESG funds. Today there are many funds that
purport to be green and many terms describing ‘green’ ‘sustainable’ and ESG`. The lack of clarity
within the ETF industry makes it harder for consumers to make an informed choice.

Appraisal of organisational structure

The seismic shift this growth strategy looks to embrace is currently too much of a departure from ABCs
core competencies to make it a feasible structural change to the whole organisation.

There is intense discussion with in the firm both at c- suite level and middle management about the future
of the ETF Industry.

Currently the industry is still in growth, it is likely that if this proposal is accepted that mangers who feel
that there is still a lot more organic growth the business won’t understand or support the direction proposed.
The “skunk works” project will require heavy start up investment and will need to be communicated
internally strategically. Working with the communications team, a schedule of communication will need to
be created.

 Firstly, announcing the project

 Explanation of why ABC is seeking long term growth rather than growth through other
opportunities,
 Communication job opportunities (with the help of HR)
 Offering training for any interested employees
 Announcing progress quarterly
 Implementing slow incremental changes and improvements to ABC to cater to millennials if the
project is going well. Examples include updating the IT infrastructure and changing bonus targets.

Key metrics
Table 4 Balanced scorecard, recommended metric to measure the effectiveness of selected key stakeholder relationships
customers, partners, staff and shareholders are the most important stakeholders.

 Within this strategic proposal it has been made clear that HNW millennials are the new target
market that ABC will diversify to serve, it is therefore imperative that relationships with this group
are maintained.
 It is crucial that ABC carries out through research into identifying how these customers and
potential customer would like to interact with the company to continue a relationship.
  Shareholder will be very important throughout this strategic project, unhappy stakeholders,
especially those from large institutions with many voting rights can potentially pose a risk at this
stage.
 Partners hold key stakeholder status, in working with these influencers, commentators and bloggers
it’s important that the relationship is maintained. In keeping customers up to date and referring
them to platforms to make a purchase they provide a similar service to IFAs but through a medium
these consumers prefer.

In conclusion
This proposal outlines the best approach to ensuring business growth not only in the short term as many of
our current initiatives already achieve but also well into the future. Millennials are now the largest
demographic group in the UK and constitute 25% of the world population (Pew, 2018). As millennials age
they are becoming wealthier and making their mark through disruption of various industries while our
current target demographic is aging. ABC has an opportunity to continue to grow and maintain a dominance
in the ETF industry with this proposal.
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Appendices

Figure 10 Source: Nielsen global social responsibility survey, 2015

Table 5 Adapted porters 5 Forces Analysis

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Customer lifetime
value over 5yrs:
$39,600

Figure 11 Source Business School Publishing. Harvard Business Publishing is an affiliate of Harvard Business School.
Customer lifetime value tool: Harvard

Figure 12 Adapted VRIO model

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Figure 13 Source Edelman Trust barometer (UK), Showing percentage of trust in financial services, compared to other
sectors

Figure 14 UBS Market Watch, Millennial investors seek advice from friends and family in making investment decisions
avoiding IFAs
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References
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touch.pdf
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Sceptica Millennials about advisors.

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