Professor of Enterprise and Director of the
Leeds Enterprise Centre
at the University of Leeds.
What would it take to make Santander a serious contender in the small business banking sector?
Until their acquisition of Abbey National in 2004 Santander was practically unheard of on the British high street. This has all changed. Not least because of their purchase and rebranding of the Alliance & Leicester and Bradford & Bingley branches but perhaps mostly because of their Formula 1 sponsorship deal with Lewis Hamilton! We may not own a single major car manufacturer but that doesn’t seem to diminish our ‘Top Gear’ obsession with fast cars and winning at sport.
In the UK, Santander is 2nd in terms of mortgages, 3rd in terms of deposits and 5th in terms of branches operated. It has over 25 million customers.
But how can Santander turn this impressive performance on the racetrack and high street into a winning formula for small business banking? The competition is tough. There are already many strong incumbents such as Barclays. But would a Spanish bank have a better chance than anyone else?
There are a few of factors that might influence the outcome.
- The relationship between Spanish and British people is largely positive. Our last serious direct conflict was centuries ago and we have an interest in each other’s cultures and climates! Of course, there are issues around Gibraltar and the number of British citizens residing in Andalucía. Did you know that in 2008, 590,000 people left the UK and 430,000 arrived? And, after Australia, where did the British citizens leaving go? Yet, the Spanish remain largely positive about the British.
- UK banks and bankers have a somewhat tarnished public image, which extends into the business sector. This might just be a ‘window of opportunity’ for a new non-UK contender to enter the market. Of course, small businesses might be slow to move their banking. However, over 1 million of them don’t seem to be too happy (http://bit.ly/abAgQh).
- The most taught foreign language in Spanish secondary schools is English. In the UK all secondary schools offer French and 76% offer Spanish, more than German. French is declining at GCSE level yet Spanish is increasingly popular.
I’m writing this blog mid-way through teaching (fortunately for me in English!) entrepreneurship to a group of MBA students at the University of Salamanca. I’m also receiving Spanish tuition at one of the many language colleges in this beautiful city. Interestingly, Santander recently sponsored a major programme of Spanish business school professorships and an entrepreneurship programme for researchers and faculty with Babson College – a recognised global leader in this field.
Oh, by the way Santander has just made a significant move. They are the only bidder for the RBS branches, which serve some 2 million small businesses in the UK (http://bit.ly/b79YJV). It looks like they have just shifted into second gear!
I wonder if one of their next steps will be to get involved in university based enterprise programmes in order to influence the graduate entrepreneurs of the future.
Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com
Keep taking the tablets – after decade a market begins to emerge
The idea of a Tablet PC emerged in 2001 when Microsoft used the term to describe a flat mobile computer, which the user interacted with through a touchscreen or stylus. Microsoft’s Window XP operating system was offered in a Tablet PC edition to support manufacturers in providing these new devices. They had the advantage of mobility and simplicity of interface. Bill Gates is reported to have said, in 2003, that “If you go out five years from now, and look at portable computers, virtually all of those will have this tablet capability.” By this stage, Microsoft had reportedly spent $400 million to build a tablet PC for Windows XP.
However, in spite of key manufacturer support, they were slow to take off – particularly in consumer markets. Hewlett-Packard developed a number of devices over an extended period. Including, the HP TouchSmart series of tablet PCs and the HP Slate. Clearly, both Microsoft and HP had confidence in a market emerging for these Tablet PC devices. However, they proved relatively expensive to produce and perhaps understandably sold to specialist customers, such as in logistics and medical environments. By the end of 2009, competition centred on just one operating system, Windows 7 and a few manufacturers (including Fujitsu, Hewlett-Packard, Panasonic and Toshiba). Customers tended to be in specialised areas and limited in number.
Perhaps not a particularly attractive market for new entrants?
In April 2010, Apple computers launched their iPad starting from $499. Described as, “A large, high-resolution LED-backlit IPS display … An incredibly responsive Multi-Touch screen … Scroll through a page just by flicking your finger up or down on the screen … pinch to zoom in or out on a photo.” (www.apple.com/ipad).
The Apple iPad was supplied with a number of popular applications, including: web browser (Safari), mail, photos, music (iPod and iTunes), videos (YouTube), books (iBooks) and the App Store. Like many computer devices, the iPad is both a product and a service. This light and thin product capabilities centred on the large multi-touch screen, long battery life, powerful processor and wireless and 3G technologies for connectivity.
A winning formula? The service element of the offering draws on two unique features which competitors found difficult to replicate: firstly, iTunes the proprietary music and video platform operated by Apple, the service that originated with the iPod range and was extended to include the iPhone and iPad devices, subsequently dominating the online music sales. By March 2010, Apple had sold 10 billion iTunes. Ensuring the iPad had access to iTunes provided instant content.
Secondly, the App Store provided access to over 150,000 applications written by a rapidly growing independent community of programmers and service providers. These applications were originally designed for the iPhone. However, even before the launch of the iPad in March 2010 Apple were providing support to these developers with SDK 3.2 beta, iPad simulator and developer community programme.
It might be interesting to reflect on the portable music market dominated by the Sony Walkman before the launch of the Apple iPod and the mobile smartphone market dominated by Nokia before the launch of the Apple iPhone. Clearly, Microsoft and the large laptop manufacturers dominated the mobile computing market at the beginning of 2010. But then … enter the iPad.
I think Apple might just be onto something.
Dr Nigel Lockett
Director of Centre for Entrepreneurship and Innovation Management (CEIM)
www.bradford.ac.uk/ceim
www.nigellockett.com
