Summary
- ING recent decision on "back to basics" will have positive impact on its business prospects; - Close of ING Retail Banking operations is a wise step, because entering Ukrainian retail market so late (June 2008) with limited scope of products and unrealistic plans (without thinking about storm on global capital markets) was a very big mistake
Analysis
ING started its retail banking operations in Ukraine in June 2008 using its model of franchising which showed efficiency in other CEE markets.
Products offered were not innovative and far beyond market and customers demand. It were card accounts, overdraft lines and internet banking (later).
Plans initially were unrealistic: to gain 5% market share with 50 branches in country while 2 market leaders had 1000+ branches each.
Even during perfect storm of autumn 2008 they continued hiring people not making any changed to the strategy - it is completely unwise step.
Now: no good products, no big branch network and a lot of employees in Ukraine ING stops its business. Best example of bad managerial decisions for MBA students.
