Assessment of Santander Consumer Finance’s approach to its international strategy

In this report I provide a critical assessment of Santander Consumer Finance’s (SCF) approach to its international strategy. In the first part, I analyse SCF’s external environment by highlighting its history and business model and also by applying Porter’s five forces model. I follow by analysing SCF’s internal environment focusing on its structure and applying the resource based view model. I finish with a critical assessment of SCF’s strategy. In the second part, I evaluate SCF’s managerial implications by highlighting its strengths, weaknesses and potential solutions. Finally, I present some recommendations for SCF’s future strategy.

I.
B. Internal analysis
In order to evaluate SCF’s internal strategy, let’s try first to understand SCF’s structure. Then, we will scan its internal environment by using the resource based view (RBV) (B835 – Unit 3).

a. SCF’s structure
This part of the analysis focuses on SCF’s internal structure following the information given by the case study.
SCF is a part of the Santander group. The company has strong financial backing and has emerged as one of the leading companies in consumer finance in the past few years. The structure of the company is a mixture of centralized and decentralized units. The company primarily has decentralization in its sales units while the decision making body is pretty much centralized.
Having a strong financial backing from the Santander group means that SCF’s potential for growth in this market is great, and the company has the resources, and the capability to do so. Also, the funding sources available and the ones currently being utilized (commercial paper, asset-backed securitization and customer deposits) have a low risk and high return potential.
Other models of sales depend upon the success in the auto finance unit, as well. SCF, in general, has done quite well in competing with these units and maintaining its market share. Apart from dealers and sales team relationship, the company structure and sources of funding also play a crucial role.