Activity 1

Group Members Present and Contributing: : Joseph Bagh, Harley Lavelle, Asin Islam,
Yuvneet Sandhu, David Sawyer, Amy Lee

Scope of Activity:
This activity focuses on applying the principles of micro- and macro-
environmental analysis to future decisions of the Royal Bank of Canada
(RBC). The activity also covers the fundamental principles of competitive
and industry analysis to the situation facing Samsung within the global
electronics manufacturing industry.

Guidelines and Expectations:

● Group members work collaboratively in class on all aspects of the

submission.
● The final submission is shared among all group members.
● The submission includes only the names of group members present
in class and contributing actively to the submission. The submission
excludes the names of group members either not present or not
contributing.
● Point form is allowed. Submissions that are tightly written and clear
are valued.
● All work for the calculations sections of the activity are included in the
submission.
● All components of the activity are included in the submission
(questions answered, sections completed, calculations done).
● Final submissions are made electronically before the end of the class.
● Only one member per group makes the electronic submission on
behalf of the group.
● The file format for the submission is as follows:
Act1xxxx(first initial and last name of submitter;(eg:
Act1MFoster)

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THE MARKER IS WELL AWARE OF THE TIME RESTRICTION
ON COMPLETION OF THIS ACTIVITY AND WILL ASSESS
ACCORDINGLY.

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ROADMAP FOR ACTIVITY COMPLETION
The following provides direction for how to complete your group
submission successfully. First, you need to identify the critical facts that are
necessary (declarative knowledge). Then you need to know the steps to
organize and apply the factual knowledge to answer the question posed
(procedural knowledge). Finally, (conditional knowledge), you need to be
able to identify and pull out the pertinent knowledge using the right
procedures and apply it to the situation.

Submission

Description versus Analysis

Listed below are a series of statements, which may be descriptive or
analytical. A descriptive statement provides information only and does not
explain why that information is important to know or what it means in a
broader context or how it can assist in a business decision. An analytical
statement provides information, but also answers the question “so what” or
“so why is this important”.

1. Identify which of the following statements is descriptive and which is

analytical, by checking the appropriate box.
2. For each of the statements you have identified as descriptive, change
the statement into an analytical statement, by additional, but
pertinent information.
Statement Descript Analyti Rewritten (if necessary)
ive cal
Canadians have not yet x Canadians have not yet
recovered from the recovered from the economic
economic downturn of downturn of 2008-9, and
2008-9, and continue to continue to carry high levels
carry high levels of debt. of debt. This is evidence that
Canadians are prone to
dissaving in times of
economic downturn.
Although more than 11 x Although more than 11
million Canadians have million Canadians have
TFSA accounts, less than TFSA accounts, less
half had a transaction last than half had a
year. transaction last year.
This leads financial

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In 2000, RBC had 1300
branches across Canada,
and in 2015 there were
1200.
Samsung’s Q2 earnings
report shows that the
company enjoyed its most
profitable quarter in two
years.
Sales and profits of
smartphones and tablets
weakened and growth was
stagnant over the previous
year.
Samsung's revenue grew
by 5% vs. the previous
year, indicating that the
launch of the S7 series cell
experts to believe that
a portion of Canadians
are not financially
astute when it comes to
various banking
options.
x In 2000, RBC had 1300
branches across
Canada, and in 2015
there were 1200. This
decrease in face -to-
face banking
demonstrates the
global transition to a
technologically
integrated world.
x Samsung’s Q2 earnings
report shows that the
company enjoyed its
most profitable quarter
in two years. The
steadfast success of
mobile devices and
Samsungs majority
market share are to
thank for the
profitability.
x Sales and profits of
smartphones and
tablets weakened and
growth was stagnant
over the previous year.
Many economists
believe this is due to
the widespread belief
that technology is
going to take reign
over society as we
know it.
x
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phone (which was the
main driver of this
growth) has been a success.

Collaborator Factors (RBC)

In the Column A, identify two factors in the category that are most relevant
for the company. For example, under the company category are included
factors such as, goals, image, experience and resources. Not all of these are
important or relevant for every company.

1. In the Column C, discuss how the factors that you identified in the
Column A will impact the current and future marketing strategy and
decision-making of the company. For example, if the company is
known as an innovator, there is pressure to bring out revolutionary
products rather than better versions of existing products in order to
keep up its image.

Column A Column C

Company Factors Impact

1. Purpose 1. RBC has various competitive,

2. Vision collaborative, and customer
oriented factors; however,
another important factor of
concern is their purpose, other
than achieving profit. RBC is an
institution that is determined to
help clients thrive, and
communities prosper. In order
to market themselves in such a
manner it is pertinent that they
give back to communities, and
foster greater corporate social
responsibility.
2. RBC has a vision to be the
world’s most trusted and
successful financial institutions.
In order to be perceived as a
trustworthy, and successful
institution; RBC must tread the

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 fine line between an incredibly
successful institution that
ammasses large amounts of
profit, and an institution that
exists to serve the people. In
order to achieve this reputation,
RBC must implement
straightforward marketing
material, while not being overtly
boastful of their returns.
Collaborator Factors Impact

1. Partnering with Govt 1.RBC is the largest Canadian bank,

or other and has a presence in more than 40
organizations to countries. With a 2017 profit of $11.5
subsidize education billion, RBC has a sizeable budget for
2. Partnering with the growth, and corporate social
govt to help responsibility. Education is always a
immigrants hot topic for any society, and with
record breaking amounts of student
debt, there is more attention than ever
on the issue of student debt. If RBC
was to implement small subsidies for
students on tuition payments, or
implement special account privileges
for students that surpass what banks
currently offer they would be able to
present themselves as a bank that both
gives back to society, and is invested in
the future of its country/citizens. RBC
could also offer students loans under
the same pretenses that OSAP offers
loans.
2.Globalization has led to a more
diverse population than ever before.
Canada is one of the most diverse
countries in the world, and in order
for RBC to successfully rally
intelligent people, and ideas; they
must demonstrate an unrivaled

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 acceptance, and encouragement of
diversity. If RBC can show an
unrivaled desire to assist immigrants,
and help them develop financial
strength and understanding in a new
country, it will demonstrate to existing
clients that RBC is committed to noble
pursuits, and will help bring in new
customers, as well as retain the current
ones as they feel proud for banking
with RBC.

Competitor Factors Impact

1. Competing with TD 1. In order to become the

1. Competing with undisputed Canadian leader,
credit unions RBC must market themselves as
the lone Canadian financial
institution that exists to serve
the people. TD is their largest
competitor and is quickly on the
rise. TD’s marketing campaigns
highlight TD’s comfort and
convenience. Therefore for RBC
to compete with TD at a higher
level they must pivot themselves
as the most convenient and
comfortable bank in Canada.
This marketing technique will
be very competitive, however it
will make RBC’s intentions to
become the undisputed leader
clear.
2. In order for RBC to work on
becoming a preferred financial
partner, they will first have to
master the Canadian market.
RBC can compete with credit
unions by offering those who
switch the same incentives credit
unions do: no fees, charitable

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Customer Factors
1. Distrust of banks
2. feelings of insignificance
to bank
donations, and global access.
This may prove difficult as
people who bank with credit
unions often have a distaste for
large banks, however with RBC’s
notoriety, and widespread
impact in the Canadian financial
market it would not be difficult
for them to create a credit union
subsidiary. This will ensure they
do not lost market share to
credit unions, and they can
provide the same product
people are leaving them to
obtain.
Impact
1.Following the 2008 financial crash,
there grew a large public distrust for
large financial institutions, and many
have had difficulty breaking that
stigma. In order to succeed today,
RBC must ensure that they operate
with complete integrity, and do not
prioritize profitability over people
that use their banking services. RBC
will need to market themselves as a
“customer first” bank.
2. Clients first is a factor that RBC is
heavily reliant on, as the institution is
interested in consistently earning the
right to serve customers, and serve
them in the best manner possible. In
the hopes of gaining recurring
customers. Large banks often make
customers feel as if they are
insignificant to the bank, however
implementation of the client first
strategy will result in customers
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Ansoff’s Matrix (Apple)
List at least one Apple product in each cell of the Ansoff's Matrix and using
the features of that cell, justify why you think this product fits that category
of innovation.
Market Penetration
Product: Iphone 8, iPhone
X, iPad Mini
Rationale: These products
already exist in their
current market. However,
by leveraging/upgrading
existing products, Apple
increases its current
market. In other words,
Apple already knows a
great deal of their market
share comes from selling
tablets and cellphones, so
selling more to their
existing market, grows
their share.
Market Development
Product: iPod
Rationale: With similar
features of the Iphone,
except that there is no
calling or texting, the Ipod
is introduced to new
international markets and
new demographics,
because of its FaceTime
and IMessage feature. For
example, in international
markets where they have
access to Internet
feeling almost as if they are doing a
favour to the bank, and not vice versa.
Resulting in recurrent uses with the
bank.
Product Development
Product: Apple TV, Apple
Watch, iPod shuffle, iPod nano
Rationale: Apple introduces
completely new products into
their usual cellphone market.
They are not necessarily adding
any additional demographics or
psychographics, but instead
capitalizing on their existing
brand equity and increasing
their market share.
Diversification
Product: Apple iTunes, Apple
Music, Apple Pay, iCloud
Rationale: These are completely
new products to new segments
of the market. Apple broadened
their reach with these unique
products as they branched out
from their popular cell phone
market, and streamlined into
the music and cloud service and
collaborated with financial
institutions/methods.
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connection but no phone
plan. In another instance,
for parents who may not
think their child is ready
for a cellphone, the Ipod is
a ‘step-below’, introducing
this product to a new
demography.

Macro-environmental Analysis (RBC)

These external factors are very important for marketing strategies and
business decisions of companies, because although companies have no
control over them, they do have to take them into consideration.

1. In the Column A, identify two factors in the category that are most
relevant for the company. For example, under the political-legal
category are included factors such as the impact of financial
regulations on banks.
2. In the Column C, discuss how the factors that you identified Column
A will impact the current and future marketing strategy and
decision-making of the company. For example, banking regulations
require a certain amount of liquidity (cash on hand).

Column A Column C
Political-legal Factors Impact
1. Brexit vote 1. Following the vote, the British pound
effected 70,000 fell to its lowest level in 3 decades. This
Canadians living made Canadians less likely to invest in
in the U.K RBC, or any other bank during the
2. The Brexit vote financial uncertainty. RBC should
means that the anticipate a lack of investments and be
interest rates in prepared for this setback.
the US won’t 2. As a cause of this, investors in the US
climb as will have an easier time investing with
previously RBC due to the more stable interest
expected. rates. Making it easier for RBC to
market investment opportunities.
Economic Factors Impact
1. Many households 1. A 2012 survey showed that many

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 do not have households did not have the financial
financial safety safety nets that would help them come
nets. back from a financial shock, however
2. Slow growth in the households with high income did.
private Using this knowledge it would be smart
investments for RBC to market towards the middle
and lower class households to provide
them with a safety net.
2. Canada experienced low growth in
private investment RBC would need to
focus on attracting customers that are
interested in investing in the future
because the U.S recovery should
increase the demand for exports from
Canada.
Socio-cultural Factors Impact
1. Online Banking 1. RBC should make their internet
2. More presence known so that customers can
Programmatic use them for their online banking and
internet transactions.
2. Programmatic advertising is now also
used for online services, thus creating a
broader base for advertising the
company’s message.
Technological Factors Impact
1. Increase in 1. with the increasing use of smartphones
smartphone use it is important for RBC to focus on
2. Marketing using ways to incorporate their services into
technology and cell phones. services like paying with
the internet. your phone, or depositing checks using
your smartphone camera. in the future
RBC should focus on finding new ways
to incorporate cell phone use into their
banking plan.
2. The internet has introduced new
marketing platforms for all businesses,
RBC should invest in hiring people
with technological backgrounds.

Metrics

2. Answer the following Metrics questions by:

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 a. finding the relevant data in the background material
b. showing all the relevant calculations to arrive at the answer
c. discussing the implication of the answer on one or more of the
micro-environmental factors.
Question 1
In 2005, RBC had 60,812 employees. By 2015, this had grown to
72,839.
A) What is the percent change to the nearest percent for this growth
between 2005 and 2015?
B) If the number of employees is expected to grow by a similar
percent over the next decade, to the nearest whole number, how
many employees will RBC have in 2025?

Calculations and Final Answer Factor Affected and Implication

There was a growth rate of

A) percent change= (new
amount-old amount) ÷old
amount x 100
percent change= (72839-
60182)÷ 60182 x 100=21.03%
21.03% 2005 to 2015. An increase
in employees. This means that
RBC was performing well in
terms of profit and revenue and
as a result, more employees
were recruited to keep up with
the demands. In addition, RBC
could have been looking to
outdo their competitors like the
other big banks and recruited
more employees to bring in
more skills, knowledge, and
ideas to their company.

`B) 2025-2015= 10 years By 2025, RBC will have

21.03 x 10= 210.3
72839+ (2.103)(72839)=226019.42
employees or 226019
approximately 226019
employees. As a result, RBC will
be able to expand their client
base as there will be more
employees to cater to their
needs. In addition, More clients
means greater revenue. Also
having more employees means
more human capital. This will
result in the development of

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 more strategies, ideas, etc

Question 2
In the background information provided are data on the big banks’
profits for Fiscal 2015 and Fiscal 2014. Describe the profit changes
using percent change (to the nearest percent) for each bank
individually and the sector as a whole.

Calculations and Final Answer Factor Affected and Implication

Profit change (Royal bank) = From 2014 to 2015, all banks

(10.03-9.00)/ 9.00 x 100= 11.44%
Profit change ( TD bank)= (8.02-
7.88)/7.88 x 100= 1.78%
Profit change (ScotiaBank)=
(7.21-7.30)/7.30 x 100= -1.23%
Profit change (BMO)= (4.41-
4.33)/4.33 x 100= 1.85%
Profit change (CIBC)= (3.59-
3.22)/3.22 x 100= 11.50%
experienced a growth in profit
except for Scotiabank, which
saw a decline in by 1.23%.
Overall, the whole sector saw a
increase in profit by 4.8 4%. This
means that the banks in the
sector could pay off their
liabilities, debts, pay dividends,
etc. In addition, the growth in
profit in the overall sector could
expand the banking sector.

Profit change (National Bank)=

(1.62-1.54)/1.54 x 100= 5.19 %

Profit change ( whole sector)=

(34.88-33.27)/33.27 x 100= 4.84%

Question 3
According to Statistics Canada, there were 25,922,300 Canadians who
filed tax returns in 2015. Of these 5,974,180 made an RRSP
contribution. This represented a 3% decrease from the number of
contributors in 2014. How many taxpayers made an RRSP
contribution in 2014 to the nearest whole number?

Calculations and Final Answer Factor Affected and Implication

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 This means that 184,768 fewer
0.97x=5,974,180 people made an RRSP account
in 2015. This shows that fewer
x=6,158,948
people are preparing themselves
for future retirement, and
possible financial emergencies.

Metrics Question 4
In the background information provided are data on the global
electronics industry’s 2015 revenues. Calculate the Herfindahl Index for
the global electronics manufacturing industry for year 2015 based on
the data provided.

Company Name 2015 2015 Market Herfindahl

Revenue Share Index for
($ Millions) each
company
Samsung $177,440 24.6% 0.06
Apple $101,598 14.1% 0.02
Siemens $87,660 12.2% 0.01
Hitachi $83,584 11.6% 0.01
Sony $67,519 9.4% 0.009
Panasonic $62,921 8.7% 0.0075
Toshiba $52,032 7.2% 0.005
LG Electronics $49,996 6.9% 0.005
Mitsubishi Electric $36,604 5.1% 0.003
Philips $28,689 3.99% 0.001
Herfindahl Index for 0.1305
Industry Competitive market

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