EGG PLC

SWOT Analysis for Egg Plc

SWOT Analysis for Egg Plc

Introduction

Egg specializes in providing Internet based financial services. In 2001, the company recorded revenues of $947.0 million (http://www.egg.com). By 2002, Egg had established itself as one of the UK's leading eCommerce financial services companies, having amassed nearly two million customers. Egg's products include savings accounts, investment and insurance. Egg is headquartered in London, England. Business Description Egg's objective is to be the customer's preferred provider of online banking services and also to intermediate financial and non-financial services online (such as shopping, mutual funds, general insurance and others), beginning in the UK and ultimately expanding into international markets. Currently, the company is organized along three business lines; a retail banking business; an intermediation business focusing on financial products and services; and a transaction portal to intermediate non-financial products and services. It seeks to attract Internet-enabled customers primarily into its core banking proposition (Kotler, Armstrong, Saunders and Wong 2004, 62-85). It then encourages them to make regular visits to its website and provides them with easy access to a range of financial and non-financial goods and services. It also aims to maintain and increase its customer base by continuously enhancing its customer offering through a combination of new products and intermediation services. To date, Egg's core banking products have proven to be attractive to customers in the UK. The company's goal at launch of the Egg brand in October 1998 was to attract £5 billion of deposits within five years (http://www.egg.com). It achieved that goal in the first seven months of operation, principally through the opening of accounts over the telephone and later through the Internet. At present, the Egg Card, a Visa credit card that customers apply for exclusively online and service primarily online, is the company's primary customer acquisition product. Another initiative was the introduction in September 1999 of Egg Shop, an online shopping portal. Currently, customers have access to over 4.5 million products from over 225 retailers who have arrangements with Egg. In addition, Egg Shop customers are able to use search functionality to compare products according to selected criteria, including price.

In addition in March 2000 the company launched Egg Invest, an independent, execution-only intermediary that allows customers to purchase and sell mutual funds through an online execution fund 'supermarket' in the UK. The company expects that Egg Invest will generate an 'annuity-like' revenue stream based on a management charge linked to funds under management purchased through the supermarket. Egg has also begun to expand its business into Europe through the acquisition of Zebank, one of France's leading online banks, in mid-2002. Now called Egg France, it aims to have acquired 1 million customers after three years. Egg has also reached a credit card distribution agreement with Groupe Arnault, the French retailer.

Products & Services Analysis

Egg achieved significant growth in 2001. The company acquired 600,000 net new customers during the year, leading to a year-end total of 1.95 million (http://www.egg.com). The new customers were principally obtained through credit card business, which ...