The emergence of the Internet has created several innovations in the way business operates. The banking industry was one of the industries that exploited the benefits that the Internet brings. Traditional banking institutions saw the opportunities that the new channel brings.
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Bank One is one of the biggest traditional banks in the US. They launched WingspanBank.com on 1999 in order to cater to tech-savvy Internet customers, in the hope of expanding their market size and operation. Wingspan was aggressive in strategies in order to become a leader in the virtual banking.The company implemented and launched innovative strategies to gain competitive advantage. However, by 2000, the new company was in trouble of closing shop.This paper aims to identify the key issues and problems that caused the failure of WingspanBank.com amidst the successful launch in 1999. The paper also enumerates several corporate strategic solutions that addresses the issues and answers the problems identified. With emphasis on market expansion and business growth, the alternative solutions were evaluated and the best strategy was chosen as a recommended approach to beat the issues.WingspanBank.com is an internet-only banking institution. It is under the umbrella of the parent company, Bank One, particularly in its subsidiary First USA. It was launched on 1999 with good reviews. It has garnered several awards for its internet-only operations after its launching. However, the virtual bank was treading on troubled water by 2000. Several issues contributed to the downfall of the bank.First, the Bank's expected success was highly dependent on the financial cover of First USA. When First USA was troubled and was under scrutiny from its customers, the financial support was brought to a standstill. Without the money poured into the initial operations and its aggressive marketing strategies, WingspanBank.com was in danger of a collapse.
Second, the expectations of the mother company on the internet bank were high. Bank One anticipated high growth rate on Wingspan's customer base as more and more people were hooked on the Internet. They invested millions in aggressive marketing and advertising initiatives to capture the market. When the expected growth was not achieved, Bank One has become skeptic on the performance of the new company and has doubted its future as a potential contributor to the corporation.
Lastly, the internet-only banking industry has become unattractive to customers. People were complaining on its operations, security and customer service. Sites were difficult to use. Human interaction, which was essential in the traditional banking, was lacking if not missing. Marketwise, the growth of online banking customers was only 2%.
With all these issues facing WingspanBank.com, Bank One top executives were weighing the pros and cons of discontinuing the operations of the virtual bank, due to its poor performance and failure to achieve expected growth.
Alternative Strategic Approach
Bank One can opt to implement several corporate strategies to address the issues and problems facing Wingspan Bank.
First, they can decide to sell the internet-only bank as a whole or pieces of the organization. Selling the company is a good option if buyers are willing to acquire it. Unfortunately, the bank is not attractive for buyers because it has no desirable assets aside from its Internet technology and infrastructure. Because the bank is still in its initial stage of operation, its brand name is not so much attractive to buyers. The brand name is yet to be embraced by consumers and become a part of the industry vernacular.
Second, they can choose to merge it with Bank One's existing Internet bank brand. Merging WingspanBank.co
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“Wingspan Bank Essay Example | Topics and Well Written Essays - 1250 Words”, n.d. https://studentshare.org/e-commerce/1528216-wingspan-bank.
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