B392 TMA - KSA FALL 2023 QQQ - Word ahmed elseadawi AE X File Home Insert Draw Design Layout References Mailings Review View Help QuillBot Docusign Tell me what you want to do Share Find Times New Roman (Headings CS) - 12 - A A Aa P CcDdEe CcDde cDde DdEe CcDdEe Gac Replace Paste 1 Normal 1 No Spac... Heading 1 Heading 2 Heading 3 B abe A ~ A Select Clipboard Font Paragraph Styles Editing PART A (60 marks) DA plc (DA) is an information solutions company, listed on the London Stock Exchange. DA began trading in 1980, providing credit reference services for business customers. Although this remains its primary activity, it has grown organically and now provides financial and statistical information to a variety of UK businesses to help them manage the risk of commercial and financial decisions. The company is split into three divisions: Credit reference services provides factual information to clients, via credit searches of an individual's credit history, to assist them to lend profitably or offer trade credit. Decision software - assists clients in improving the consistency and quality of business decisions in areas such as credit risk, fraud prevention and customer account management Vehicle history - provides financial and statistical information to the automotive industry to help clients understand the risks associated with the purchase or sale of a particular second-hand vehicle A breakdown of key data by division for 2007 is as follows: Credit reference Decision Vehicle Tote services software history Sales (fm) 166 115 64 345 Operating profit (fm) 41 34 13 88 th in sales fr 3% 15% 6% Number of employees 686 490 300 1,476 |Page2 100% Page 2 of 7 1948 words English (United States) Accessibility: Investigate Q 910 W P 2:20 PM E 10/30/2022CS B392 TMA - KSA FALL 2023 QQQ - Word ahmed elseadawi AE X File Home Insert Draw Design Layout References Mailings Review View Help QuillBot Docusign Tell me what you want to do Share Find Times New Roman - 12 - A A Aa P CcDdEe CcDdEe cDdEe DdEe CcDdEe Gac Replace Paste 1 Normal 1 No Spac... Heading 1 Heading 2 Heading 3 B U abe A E Select Clipboard Font Paragraph Styles Editing B392 TMA, FALL 2022-2023 B392 TMA, FALL 2022-2023 Credit reference services The software takes data from DA's credit management database and other sources, such as the Clients for credit reference services can be split into two groups: client's own customer account information, and uses analytical tools and scoring systems to provide Banks, credit card companies and other financial services organisations decision support. Typical users of this product are banks, credit card companies, mortgage providers which need help assessing the risk associated with lending decisions. and other organisations that grant personal or trade credit. DA's software enables them to assess quickly Commercial companies seeking credit references before supplying and accurately whether to accept a new customer or to extend credit arrangements for existing goods on credit to other businesses and private customers. customers. It can also define the processes the businesses should adopt in managing an account that has fallen into arrears. When an individual or business makes an application for credit, the lender or supplier usually asks Vehicle history a credit reference agency (CRA) for a credit search to check the applicant's identity and Recognizing that it had a core skill in the management of large databases for the financial services creditworthiness. The database system operated by a CRA enables different lenders, such as banks, to industry, DA also decided to provide similar services to the automotive industry. It compiles and share information about their customers' credit accounts and repayment histories. Applicants have to manages data on the histories of 30 million vehicles and 25 million car insurance policies in the UK. give permission for their credit report information to be shared when they apply for credit. This data is used to provide vehicle history information to car dealers, finance providers and insurers. Although a number of companies are currently licensed CRAs in the UK, DA is the largest, Fraudulent representation of used vehicles is a significant risk to private consumers and a potential with a 58% market share. DA has built its market position by compiling and managing the most financial liability for the businesses involved in the sale or purchase. The vehicle history can assist in comprehensive credit database in the UK. Communication and information technology are a core establishing the market value of a vehicle; and whether a vehicle is registered as stolen or has part of DA's business. Online systems allow lenders to update data directly, resulting in more outstanding finance. accurate information and efficiency gains for DA. DA's main competitor CC Inc. (CC) is an American based business with an acknowledged Proposed diversification expertise in credit scoring (a statistical technique that combines several financial characteristics to Recently DA has decided to target a new market, the individual consumer market, with a new form a single score to represent a customer's creditworthiness). CC has recently announced that, as online service: Checksta. part of its global expansion strategy, it plans to increase its share of the UK credit market, which is Under current UK legislation, individuals have a legal right to see the information about them held currently 32%. CC intends to use low-cost web-based systems to deliver online consumer credit by a CRA. In return for a statutory fee of 2, the CRA is legally obliged to provide a written copy of scores directly to lenders and companies extending trade credit. In this way, it hopes to reduce the information held on the individual's credit report. Instead of making a written application for DA's market dominance in the UK. a statutory credit report, individual consumers will be able to pay to subscribe to Checksta. The Checksta service will allow individuals to check online that their credit report is accurate and DA's strategic development up-to-date, as many times as they want. Checksta will send a text or email alert every time there is a Decision software significant change to the information held on an individual's credit report. This alert service assists in Having created a reputation for holding the most comprehensive credit database in the UK, DA went identifying identity fraud (where someone applies for credit in another person's name). Individuals on to develop analytical software to enable clients to process credit applications and manage customer will also be able to order a credit score, based on their DA report, which will give them an idea of credit accounts more efficiently. how a lender would view the information, if they were to apply for credit. |Page3 |Page4 Page 3 of 7 1948 words English (United States) Accessibility: Investigate 87% Q 910 W P 2:21 PM E 10/30/2022CS B392 TMA - KSA FALL 2023 QQQ - Word ahmed elseadawi AE X File Home Insert Draw Design Layout References Mailings Review View Help QuillBot Docusign Tell me what you want to do Share Find Times New Roman - 12 - A A Aa P CcDdEe CcDdEe cDde DdEe CcDdEe Gac Replace Paste 1 Normal 1 No Spac... Heading 1 Heading 2 Heading 3 U abe x 2 A ~ Select Clipboard Font Paragraph Styles Editing The introduction of Checksta is partly in response to the aggressive marketing stance currently being adopted by CC and also as a reaction to the following changes in the external environment: Changing attitudes to money and credit. An increase in spending has le to an increase in demand for credit and it is very easy to apply now, bot by telephone and online. This means that individuals are more likely to shop around for credit and lenders have to carry out more checks. Changes in legislation. DA has to conform to the UK laws that govern the way it does business. Government concerns that debt levels are too high have caused a tightening of the legislation to give consumers bette access to information held on them, more rights regarding disputes with lenders and more protection from rogue lenders. As a result, CRAs hav had to implement a consumer education programme, working closely with consumer organisations to help consumers to understand how crec referencing works. The growth of e-commerce (products bought online). This has necessitated more frequent and rapid credit checks and a subsequent upgrading of DA's information technology systems. An increase in identity fraud. Identity criminals steal people's personal information and use these details to commit crimes, usually obtaining credit illegally. Marketing 0 To date, DA has mainly worked with business clients, attracting business customers through personal selling and retaining them by developing strong client relationships. The sales director is aware that to succeed in the consumer market, DA will need to use a different marketing strategy for Checksta. DA intends to use its knowledge of consumers who have applied for their statutory credit reports in the past, to build up a profile of consumers it wants to target with its online service. Preliminary market research suggests that those most likely are people who are internet users, credit users and those keen to manage their financial affairs effectively. Such people are likely to read the financial pages in newspapers or visit personal finance websites. Page 5 of 7 1948 words English (United States) Accessibility: Investigate 100% Q 930 w 2:21 PM 10/30/2022CS B392 TMA - KSA FALL 2023 QQQ - Word ahmed elseadawi AE X File Home Insert Draw Design Layout References Mailings Review View Help QuillBot Docusign Tell me what you want to do Share Find Times New Roman - 12 - A A Aa P CcDdEe CcDdEe cDdEe DdEe CcDdEe Gac Replace Paste 1 Normal 1 No Spac... Heading 1 Heading 2 Heading 3 U abe X , x 2 A E Select Clipboard Font Paragraph Styles Editing The growth of e-commerce (products bought online). This has necessitated more frequent and rapid credit checks and a subsequent upgrading of DA's information technology systems. An increase in identity fraud. Identity criminals steal people's personal information and use these details to commit crimes, usually obtaining credit illegally. Marketing To date, DA has mainly worked with business clients, attracting business customers through personal selling and retaining them by developing strong client relationships. The sales director is aware that to succeed in the consumer market, DA will need to use a different marketing strategy for Checksta DA intends to use its knowledge of consumers who have applied for their statutory credit reports in the past, to build up a profile of consumers it wants to target with its online service. Preliminary market research suggests that those most likely are people who are internet users, credit users and those keen to manage their financial affairs effectively. Such people are likely to read the financial pages in newspapers or visit personal finance websites. |Page 5 B392 TMA, FALL 2022-2023 Required (a) Explain the factors that may have contributed to DA's competitive advantage. (30 marks) (b) Prepare a PESTEL analysis on the credit reference industry, clearly explaining the implications for DA's plans to implement the Checksta product. (30 marks). Page 5 of 7 1948 words English (United States) Accessibility: Investigate 100% 930 W P 2:21 PM Q E 10/30/2022