Running head: NAVY FEDERAL ENVIRONMEMTAL SCAN
Navy Federal Environmental Scan
MGT 498
January 10, 2018
1
NAVY FEDERAL ENVIRONMENTAL SCAN
2
Navy Federal Environmental Scan
International Strategy is the plan that Navy Federal Credit Union utilizes in order to
provide its services to the outside market other than the domestic market. This is because new
opportunities are discovered by the company from providing the credit services to the outside
market to. With this kind of strategy in hand for the company, it is able to create more awareness
to the outside market thus creating a large geographical area of customers from different places.
This will actually increase the profits for Navy Federal Credit Union thus creating more income
for the company.
With this Navy Federal Credit Union will be able to enjoy more opportunities as they will
be in a position to come up with new methods of giving out credit to their customers and thus
coming up with new methods of investments (Covington, 2017).This actually creates a
competitive advantage over the other credit companies that only focus on the domestic market
because it means that the company will be situated in different regions in a way that it will
increase the customer accessibility.
Strategic Implementation
In the implementation of the Navy Federal Credit Union strategy, the firm has to through
several processes in which the plans are put into action in order to achieve the objectives of the
company. For the strategy to be implemented successfully the company has to allocate the
required resources and capital to their budget. A leader is elected who helps in the allocation of
NAVY FEDERAL ENVIRONMENTAL SCAN
3
duties and also communication of the necessary information during the formation and
implementation of the strategy. The leader also formulates the vision in which the team members
have to follow and also provides the necessary tools for measuring the performance of the
employees.
Time structure is also initiated in order to prioritize the processes and determining the
expected duration of the overall project. For the implementation of such a strategy, only qualified
personnel are involved because of the necessary unique skills that are required (Covington,
2017). Also, in the implementation of such a strategy, all the members of the Navy Federal
Credit Union are involved in the overall plan in order to create employee involvement and also
create a pool of man-power and team-work.
The Influence of Governance & Ethics
Navy Federal Credit Union has a high and good reputation in terms of governance which
ensure that the wealth of the various shareholders involved in maximized to the fullest and also
their welfare in prioritizing together with the welfare of the society. This is achieved through the
utilization of a control mechanism that is tight in order to ensure that rules and regulations are
clearly followed.
Governance plays a very important role because it helps Navy Federal Credit Union to
acquire more profits. The interest of the customers and that of the organization is aligned with
the governance team decisions and also the leaders of the governance team have to ensure that all
of the ethical responsibility is completely followed so that the plan can be accomplished
successfully.
NAVY FEDERAL ENVIRONMENTAL SCAN
4
Ethics is usually the moral discipline that a person has to follow in order to conduct
himself in the right manner by following a professional kind of behavior. Navy Federal Credit
Union has the responsibility of ensuring that all of their employees follow the ethical rules and
have good behavior at the workplace in order to make it easy for the goals to be achieved and
also the different kinds of strategies to be implemented successfully. Navy Federal Credit Union
has employed qualified personnel who serve customers appropriately and also they ensure that
the customers’ needs are satisfied completely. The company is mostly dedicated to providing
standard services to their customers and their ethics is that they provide employment which has
enabled their workers to earn a living for themselves.
The Firms’ Social Value
Social value is the change in the values in relation to the experiences of the people. At the
Navy Federal Credit Union, their social values consist of creating a better working environment
for their employees. The first priority of this company is to provide a friendly working
environment for their employees, training the employees, providing medical care for the
employees and finally providing remunerations that are favorable to the employees. It is the duty
of the firm to ensure that its surrounding environment is protected and this is achieved through
the adhering of a better environmental working condition by not polluting the environment in
any way. Other than providing credit services to their customers this company has also ensured
that it has protected its environment by placing different waste recycling methods at the
workplace in order to avoid any form of waste being disposed to the environment.
NAVY FEDERAL ENVIRONMENTAL SCAN
5
Navy Federal Credit Union is also highly involved in humanitarian campaigns in which it
helps the less fortunate people by providing different kinds of donation to helps these people
earn a living.
Diversification & Innovation
Innovation at Navy Federal Credit Union includes the company being able to come up
with many new different methods of providing services to its customers in order to increase the
company’s profits and also attain a competitive advantage over the other credit companies at the
market. This has been a strategy that has actually helped this company to gain more and more
customers because of being more innovative than the others (Peterson, 2017). Diversification in
the sense that Navy Federal Credit Union has been able to provide services to the outside market
other than the domestic market has really enabled this company to be diverse in regards to
providing services and meeting the needs of different clients from different geographical regions.
Diversification is a strategy that has enabled the company to reduce their overall risks and also
maximize their profits.
Legal Limitations
For any of the strategies to be implemented successfully usually, there are legal laws and
regulations that should be followed. These kinds of laws are usually set by the U.S government
and it depends on the industry in which a company is operating. Some of the laws may end up
limiting the operations of the company such as the limits in which the company has to give
credit. The rules usually limit the amount of credit that the company can offer to a client. In order
for this company to operate without any form of limitation, it has to license itself by the
NAVY FEDERAL ENVIRONMENTAL SCAN
6
government and a certain fee that is put in place by the U.S government. Another important
aspect is the paying of taxes which is mandatory for any company whether private or public and
for this reason, taxation is one of the factors that is reducing the level of profits of Navy Federal
Credit Union because without any form of deductions the company makes a lot of money in
return.
The Strategic Metrics
The strategy is usually a set of actions that enables a person or a company to achieve
certain goals. Also, a company should follow a certain procedure in order to achieve its goals.
Statistical analysis of metrics is important for the formulation of a reliable plan which can lead to
the attainment of the company’s objectives.
The important metrics include differentiation and cost. Differentiation is important
because it helps Navy Federal Credit Union to be able to establish a trade-mark for themselves
which its customers can easily familiarize themselves with because of the services that are
provided by the company.
Vertical Integration is an important aspect of Navy Federal Credit Union because it
enables the company to have easy governance in terms of the resources being supplied in their
different institutions. This is a great way for the reduction of the cost that comes with such a
process and also helps in customer satisfaction.
Strategic alliance with the stakeholders involved is an important aspect to Navy Federal
Credit Union because it helps to build a strong relationship with their various stakeholders in
NAVY FEDERAL ENVIRONMENTAL SCAN
7
order for the company to always remain relevant in the future. Being innovative and also giving
the first priority in terms of the company’s reputation is very important for the day to day
continuation of a company. Also, in terms of competition, it is important that a company should
be able to keep an eye on their competitors in order to remain relevant (Peterson, 2017).
The competitive advantage of Navy Federal Credit Union is very important because in
relation to the above metrics NFCU will be able to build a brand that the customers can easily
relate to and this is a great sign to show that a company is profitable and relevant.
The Financial Ratios
The financial ratio is the key indicator of the stability and performance of a company.
Profitability ratio is the most frequent type of ratio in use by many companies. Profitability ratio
offer provides various types of measures in terms of a company’s success in profit formulation.
The main focus of profitability ratio is the return on assets, return on equity and the gross profit
margin (Yard, 2018). In relation to this profitability ratio usually focuses on the measurement of
the gross profit that is earned from the sales or the services being provided, also it focuses on the
effectiveness of the assets being used for the generation of the profits and also the measurement
of the amount profits attained from the various investments.
Another important ratio is the liquidity ratio which is an important ratio to enable Navy
Federal Credit Union to be able to check on its capability to attain its short-term goals. The
dividend policy ratio enables the company to check on the potential to grow in the future. Asset
turnover ratio helps the company to effectively use its assets in terms of profits generation and
NAVY FEDERAL ENVIRONMENTAL SCAN
8
finally, the financial leverage ratio enables the company to achieve a long-term financial
capability.
References
Covington Jr, H. E. (2017). Lending Power: How Self-Help Credit Union Turned Small-Time
Loans into Big-Time Change. Duke University Press.
Peterson, C. (2017). Choosing Corporations Over Consumers: The Financial Choice Act of 2017
and the CFPB.
Yard, F. (2018). For Lease. POPULATION, 6(92,888), 295-692.
Running head: STRATEGY FORMULATION
1
Strategy Formulation
Wayne Felder
MGT 498
January 17, 2018
Craig Southern
STRATEGY FORMULATION
2
Strategy Formulation
Every business lies in the desire to make profits. However, not all enterprises achieve this
willingness during their operation. Some fail in the initial establishment phases. Some also fail
because of poor management as well as strategy formulation and implementation. If a business is
going to success, it must ensure that it has the most desired strategies outlined before beginning
its respective operations. The first steps in starting a business are identifying the relevant goals
and objectives. The manner in which the goals and objectives relate to the strategies used.
Strategy formulation
Considering the Navy Federal Credit Union, it currently serves a large number of
members from diverse backgrounds as far as the forces are concerned. However, to reach to
more customers across the US and the other countries, the union needs to formulate a growth
strategy. The first plan for the union is to device a marketing and public sensitization
mechanism. Sensitizing the public or the desired group of target members would play a huge role
in attracting them into joining the union. Consequently, an excellent public image backed up by a
robust marketing strategy would ensure that the union attracts potential customers.
What is the best market for the company? Well, currently, the union serves in the US.
The company decided to venture into the other geographical locations such as in Europe, and
Asia would present not just an opportunity to grow but also a chance to achieve the desired
returns regarding the annual income. The European market is one of the most wanted business
environments by many companies due to its large and ready potential population. In the new
markets, the company would offer a more flexible way of saving and better loan application
STRATEGY FORMULATION
3
terms as compared to the existing similar local businesses. Going for better loan terms and
conditions is a good step in luring more people into the company as members. The more the
members the company has, the better the annual returns it gets.
Each investment lies in its workforce as well as the other resources allocated for the
various tasks. As such, it then follows that the company requires enough capital as well as other
resources to establish a firm foundation in the new markets fully. The most crucial funds for the
company are the infrastructure. The company needs to purchase and install the necessary
equipment to expand its territories in the mentioned markets. Such pieces of equipment include
the technological support systems for enhancing and improving their overall activities such as
computers and servers. In addition to the technical support components, the company may
employ new members to act as support staff to aid in the various activities. After harmonizing
the newly hired personnel and the implemented systems, the company then can start its
operations in the targeted countries and markets. As a means of guaranteeing the credibility as
well as the availability of the services in the new markets, the company may opt to implement
new back up services.
Sustaining competitive advantage is a difficult task for many companies. Because a credit
company deals with issuing loans, mortgages, as well as savings services, differentiating the
activities undertaken, would ensure to achieve and maintain the competitive advantage. As such,
the terms of loans, interest rates on repayment, the interest earned on savings and also offering
promotional services to members for attaining a given level regarding the total withdrawal or
debit transactions would help in differentiating the company`s services from those of the rivals.
STRATEGY FORMULATION
4
Business management strategy
The company may opt to provide its services at a lower price to compete with the rivals.
Ensuring that its products differentiate from those of the competitors in the market would
provide an excellent opportunity for the overall growth and success in the market. Today,
businesses strive to attain competitive advantage through product or service differentiation. The
primary position of product differentiation is that it helps to set a company a pace ahead of the
competitors. Every customer, therefore, gets the desire to get associated with the leading group.
In case of the company in context, differentiating its services would help to attract more potential
customers in the new markets. To enter and the new market successfully the company may
require a strategic alliance with an already established business within the targeted area. The
strategic partnership is a powerful tool that brings together two different entities to provide the
desired services while keeping the independence of each establishment.
In vertical integration, the company has the opportunity to control all the available
resources allocated to the different areas and channels (Joskow, 2012). As such, the primary
advantage of vertical integration is that it enables a business to reduce the overall costs that
otherwise third parties assigned the respective tasks can use. The Navy Federal Credit Union
may benefit regarding lowering the total amount of finances associated with employing third
party personnel to manage the other activities that it may undertake. The corporate strategy
involves targeting a smaller or a narrow group of customers. The tight association of the targeted
STRATEGY FORMULATION
5
customers receives the most desired and custom-made products that are inclined to meet their
specific needs (Grinblatt & Titman, 2016). In this case, the Navy Federal Credit Union has
already selected a target group, which includes the members of the different forces. Providing the
desired services to the members is a huge contributing factor that would attract more members of
the same group to join the company. Combining the corporate strategy with the best marketing
mechanisms would not only render the union as the best company to the target group but also as
a reliable financial institution. See figure A, below for NFCU Organizational Chart
Organizational chart
Organizational chart for Navy Federal Credit Union
Members (Customers)
Board of Directors
Audit teams
Management
Supervisory team
STRATEGY FORMULATION
6
In conclusion the Navy Federal Credit Union currently offers its services to the members
located within the United States. In the country, although there are numerous similar companies,
the Navy Federal Credit Union has always maintained its top position where it has earned the
trust of the members through its robust competitive advantage aspect. Navy Federal Credit Union
is definitely for longevity.
STRATEGY FORMULATION
7
References
Grinblatt, M., & Titman, S. (2016). Financial markets & corporate strategy.
Joskow, P. L. (2012). Vertical integration. The Antitrust Bulletin, 57(3), 545-586.
Purchase answer to see full
attachment