Ally Bank: General Environment, Industry Analysis, SWOT, Competitor Analysis And Strategic Action Plan

General Environment

Ally bank is one of the largest banks in terms of providing finance for automotive financing products in United States. It was a part of General Motors until 2009 and is located in Michigan, United States. It provides services like auto financing, insurance, corporate finance and online banking.  In banking they are exceeding $75 in customer deposits, investment numbers are 250,000 customer accounts which make a total of $4.7 billion in assets, and in auto finance they are serving 18,000 dealers and their transaction ranges from $15 million to $250 million in corporate finance. In this report, general environment, its industry analysis, internal analysis, SWOT, competitor analysis and strategic action plan is discussed (Ally, 2018).  

The general environmental are:

1. Technological Trends: Technology keeps on changing rapidly there days. If there is new product launched 6 months before, there will again be a new technology after 6 months or so to replace the previous one. Hence, organizations should have a keen eye on new technology.
2. Demographic Trends: Demography is a study of human population. It includes age, size, statistics, gender and occupation. In business, the most important thing is the humans. A company works because of the work done by humans. The large the demography is, the difficult it is for the business to excel but also there are more opportunities too on the positive side.

1. Economic Trends:  A company should never export its products to such a country where there would not be much people spending on their product. VAT, GDP, Inflation, import duty rate should be concerned before doing this.  

1. Political Trends: Political trends limit the business. The government laws, pressure groups and agencies are such kind of political trends which limits it. Marketing decisions are influenced by these factors a lot.

1. Socio-cultural Trends: Society means people of different cultures. They affect the business when the culture is not understood by the company.
2. Physical Trends: Natural forces are also important for the marketers to imbibe as they too affect the marketing activities. Environmental sustainability is also to be considered by the company as it is changing rapidly these days(Marketing – Insider, 2017).
3. Global Trends: It is basically the competition between two or more businesses. How is the competitor company doing, is also to b e considered while growing self business.   

Porter’s five forces model should be considered by any company which is looking for growth or for sustainability in the market. A non impressive company would be the one whose profit is affected by these factors. Porter’s five forces are:

1. Buyer Power: It is actually the bargaining power of the customers. A buyer has a strong impact on the firm if the buyer has many options in the market.
2. Supplier Power: Same as the customers, if there are less substitutes, suppliers of raw material can raise their bars of prices for the firm.
3. Rivalry: It is important to keep all the information about the rival company or companies as they can prove to be a threat.
4. New Entry: The Company which is at the profitable side will definitely attract the new comers.
5. Substitution: There are a lot of substitute products in the market with fewer prices. Hence, the customers are likely to move towards them. This can be a threat to the company(Usman Ali Khan, 2015).

Competitor analysis can be done by knowing the threats and opportunities. After 2009, Ally Bank has reached on another growth level. It has grown to a very extent by making its mark in the industry. The company has given good performance in auto lending and direct online banking. Though the competition is tough, Ally bank is standing firm in the industry by providing good services on low rates. It is one of the largest auto financing company today. It competes with all the leading companies like JP Morgan Chase, Santandar Consumer. But the most important of all, its major competitor is one of its former joint companies which is General Motors. Other banks like Nationwide Bank, Capital One Financial Corporation are also threat to Ally bank as each one of them has different strengths. For example: National wide provides mind blowing deals on the loans to their customers whereas Capital one provides best certificate of deposits rates. After all this, Ally is still considered as one of the top banks (Beard, 2013). 

The internal Analysis of the company can be easily done by SWOT analysis. SWOT analysis focuses on the Strengths, weaknesses of the company as well as on the opportunities and threats.

Strengths

• It is a domestic market
• High profit and revenue generation
• Labor cost reduced
• Market size is 30% approximately.

Weaknesses

• High investments up to 15%.
• Bank is still facing the barriers.
• Lack of strategic relations.

Opportunities

• Income level always increasing
• New market
• New acquisitions.
• Venture Capitals.
• Market size can increase in future.
• Possibility of new products.

Threats

• Bargaining power of suppliers is high.
• Cost of the raw materials is rising day by day.(Swotanalysis24, 2017). 

SWOT stands for Strengths, Weakness, opportunity and Threat.

A brief explanation of the four points:

• Strength is the quality that makes a company achieves its success. Strengths can be anything which makes a company different from others. The management should be well experienced to fulfill the company with such strengths.
• Weakness is in the internal factors of the company. The issues due to which the company is unable to achieve its goals or growth. Due to these weaknesses, the competitor companies can be benefitted by making them the strengths for them.
• Opportunities are the factors that are external to the company but helps achieving the growth to the company. These factors help the organization to make new strategies to achieve its goal and make profit.
• Threats are the factors which deteriorates the company’s profit. They cannot be controlled. The survival of the company could be on stake as they arise(researchgate, 2018).

Strategy Formulation is the process where the organization makes the strategies for marketing and meeting their goals. There are 6 steps for strategy formulation.

1. Define Organization: The first step is to know amount the company customers. Without the customers, a company is nothing. Determining about the customer’s needs is important.
2. Define Mission: Defining mission means a company’s long term goal as to what they are going to do to make it to their goals.
3. Define Objective: Defining objectives includes production of goods, desired share market, best customer services, advance technology and increase in sales.
4. Define Strategy: Developing the strategy to stay in market and fight with the competitors is what is known as defining strategy.
5. Implementation of Strategies: The strategies which were developed should also be put into one place so that they become effective.
6. Evaluation Process: After the implementation of the strategies, a company should keep a check on the results on the market. If any changes are required, they can do it if they proactive(saylor, 2013). 

A strategy Action Plan is a kind of document which helps the company to achieve all the goals.  In 2012, Ally Bank rolled out the article mentioning about their strategic actions to strengthen their company in terms of the financial profile and accelerating repayment of the U.S. Treasury’s Investment (Ally, 2018). These action plans will help bank to grow and to further invest. Few steps to develop a strategic action plan are:

1. Vision: A vision statement will be helpful in giving the reader the picture of the hopes of becoming a successful organization.
2. Mission Statement: Mission statement shows what a company is all about and what it desires to become.
3. Perform Gap Analysis: Gap analysis will create a difference in what the company is right now and what is the vision. It will find out the gaps.
4. Smart Goals: The smart goals are those which can be achieved in a shorter span of time working smartly.
5. Progress monitoring: Goals should be monitored constantly. They should be measured on the basis of the time taken and percentage achieved(Jive, 2018).

Conclusion

Ally Bank has naked its mark in the market after getting up from the downfall they saw while getting separated from GM. In this report, an introduction to Ally Bank is discussed. The factors as to how it became one of the leading banks even after getting separated from General Motors since 2009. Its strength and weaknesses are discussed. The opportunities that are there for Ally Bank in the future as well as the threats from which it can be saved by performing SWOT analysis. From doing industry analysis to internal and external analysis for Ally bank to developing a strategy action plan, everything is discussed. 

Reference 

Ally. (2018). Retrieved from Ally.com: https://www.ally.com/files/pdf/ally_CompanyOverview.pdf

Beard, R. (2013, May 3). clientheartbeat. Retrieved January 23, 2018, from clientheartbeat.com: https://blog.clientheartbeat.com/competitor-analysis-template/

Jive. (2018). Retrieved january 23, 2018, from jive.com: https://jive.com/resources/blog/5-step-strategic-plan/

Marketing – Insider. (2017). Retrieved from marketing-insider.eu: https://marketing-insider.eu/macro-environment/

researchgate. (2018). Retrieved 2018, from researchgate.net: https://www.researchgate.net/publication/315054133_Strengths_Weaknesses_Opportunities_and_Threats_SWOT_Analysis_and_Strategic_Planning_for_Iranian_Language_Institutions_Development

saylor. (2013, September). Retrieved January 23, 2018, from saylor.org: https://www.saylor.org/site/wp-content/uploads/2013/09/Saylor.orgs-Strategy-Formulation.pdf

Swotanalysis24. (2017). Retrieved from Swotanalysis24.com: https://www.swotanalysis24.com/swot-a/4962-swot-analysis-ally-financial-inc.html

Usman Ali Khan, M. N. (2015). A CRITICAL ANALYSIS OF INTERNAL AND EXTERNAL. International Journal of Economics, Commerce and Management , 3 (6)