Growth is a requirement for business. Growth is defined as an increase, expansion or development in a business’. It is a stage where the business reaches the point for expansion to generate more profit. Business growth also include expanding products and services and target markets. In the articles below, Discovery is growing their business by stepping into the banking space. This is important because they are creating new opportunities for their employees and they are exposing the business to a wider audience. Potential customers can dramatically improve Discovery’s sales, resulting in increased profitability.
The new Discovery bank will compete against successful banks such as Absa, FNB, Nedbank, Capitec, and Standard Bank. Discovery states that the data it is able to gather from medical insurance and investment techniques might be the secret source to increasing competition in the banking environment.
Discovery takes operating profits (for example: discovery invest and discovery insure) and they generate it back into the business which will help with the setup of the bank which has cost them millions to get their banking licence granted. However, it has been said that the bank will make a bigger contribution sooner than other operations that have been undeveloped. Vitality has a program that can spread further into the bank which will contribute to its growth.
They will continue to drive their strategy a healthier lifestyle where people will receive more discounts. Having a bank account with them will help you enjoy benefits in other places and by using this strategy, Discovery will to catch more people and increase more competition in the market.
Before discovery came into the market it was a competitive space. Although Discovery is well established, in order for them to stay successful they will have to keep expectations of their brand up to date. If their bank isn’t as good as their life insurance and vitality it will have a negative image on Discovery as a whole and people won’t want to be involved in the business. Discovery needs to know how to handle the banking sector and be on the same level as competing banks or else they will destroy their business image.
Discovery has already spent a lot of money getting to the point of their banking licence to be granted but it will cost more money to open new branches where people can go bank with discovery. By taking profits from discovery invest and discovery insurance, Discovery is shifting all the focus onto their bank and in a way neglecting these operations where the profit can be used to grow these operations instead.
Discovery needs to open branches all over the country so multiple people from different places can join the bank instead of having one main branch. For example-if a person who is banking in Johannesburg moves to Cape Town they might have an issue and they can’t solve it unless there is a Discovery Bank in their area.
Even well-known banks, such as Capitec, are also face challenges in the banking sector -as shown in the second article-although they have been in the market for long. This shows that discovery, who is taking a risk by joining this sector, will most likely struggle at first because they are new entrants. The challenges faced by well-known banks shows it is a difficult market to go into.
Text 2 states “Specifically, South Africa still faces weak economic growth, ongoing political noise (but with positive signs of change), and state-owned enterprises with significant liquidity and governance problems that continue to restrain business, investor, and retail confidence.”
As a result, discovery can lose millions and end up not making a profit because of South Africa’s fragile economy as well as fluxuating exchange rates (South Africa operates a flexible exchange rate system, which means the value of the rand is determined by the market forces of supply and demand. The demand for a currency relative to the supply will determine its value in relation to another currency). South Africa’s rand can drop any moment as we saw after the cabinet reshuffle where the rand lost more than 0.5% within minutes of President Jacob Zuma’s announcement.
My opinion is that Discovery is taking a step in the right direction in to take a risk to increase their business profit and growth.
Business ethics are moral principles that guide the way a business behaves. Business ethics are built upon attitude, value, behaviour, and normal customs and expectations. It is about being responsible in all business dealings and not only towards society. Acting in an ethical way involves distinguishing between what is right and wrong and then making the right choice in order to make sure employees at Discovery act in an ethical manner, management must make sure that the organizational culture underpins ethical behaviour and punishes unethical actions.
Discovery’s Code of Ethics reflects the central expectation that they operate with integrity in all of their business activities and it contains basic principles and practical guidance on topics that can have significant legal and ethical consequences if handled incorrectly. The Code applies to all Discovery employees, officers and directors. Discovery prefers to do business with people who share the same values and them.
Importance of Ethics:
• Attract customers to the firm’s products, which means boosting sales and profits
• Help the business stay within the boundaries of the law
• Ethical codes improve teamwork and productivity because all employees understand what is acceptable behaviour and what the consequences of unethical behaviour will be.
• It helps improve relationships within a business and with other stakeholders
Ethics can be defined as the moral principles that govern a person’s behaviour or the conducting of an activity. Ethics can be seen as a focal point in today’s society with the constant rising issues of corruption and fraud.
In text 3, Discovery claims that they feel that it is important to contribute towards a sustainable community that lives the values of honesty and integrity, as well as to create a community that lives these values involves being constantly alert and doing what is necessary to prevent bribery, corruption and fraud.
However, with the recent uncovering of over R500 Million lost by Discovery due to fraud there has been questions raised on the ethics of those Discovery members. Fraud can harm Discovery’s reputation, particularly when it involves their business partners.
Questions should also be asked of Discovery and how they did not detect these issues before the reported cost in Text 4 had amounted so high. Pressure should be put on Discovery to attempt to retain the money back as well as to prevent future occurrences like this from happening as well as to limit fraud affecting the business in the future. Ethical guidelines should be enforced by Discovery more strictly so that members who act against these are reported to the authorities for fraud and these members will have their memberships with Discovery terminated.
My opinion is that Discovery should make sure that they implement their inner code of ethics with other partnering pharmacies and doctors to ensure all partners are aware of the ethics they need to comply with when dealing with Discovery as well as members of Discovery. Regular constant checks should be carried out by Discovery to uncover any unethical practices which could be affecting them and their business image.
Customer service is ensuring a product or service satisfies the customer. Often, customer service takes place while performing a transaction for the customer. Customer service can take the form of an in-person interaction, a phone call or self-service systems.
In today’s highly competitive business environment where consumers are faced with many choices with who to do business with, it is important for Discovery to set themselves apart from the rest.
Customer service within Discovery is important because it builds trust, which means their customers will stay loyal to them. By providing good customer service people will start talking about Discovery which will also build brand awareness.
Good customer service says a lot about a company and what they value when they care deeply about their customers. It conveys a strong set of moral values and beliefs in the company’s mission. This can open the doors for new partnerships and opportunities for Discovery to expand their business, especially when other businesses see how well you take care of your existing customers
By treating their customers well, overall problems associated with the business, sales and the potential for any legal issues that might arise will reduce. If customers know that they can voice complaints and those issues will be handled properly, they will feel more comfortable doing business with Discovery.
With the introduction of Discovery Vitality as a new customer service for Discovery customers, members are encouraged to live a more fulfilling lifestyle. By using health apps or sport watches to track progress of goals. This gives members motivation to achieve certain gaols such as free coffee coupons, movie tickets or cash back on certain purchases or premiums depending on the amount of points that the member accumulated over a certain period through the health and fitness apps. These benefits are great however, some may seem almost unachievable due to unrealistic goals which Discovery may set.
The introduction of these Vitality points also attracts new customers who may not have had the same benefits or may have not gotten much from their previous life insurers or medical aid programmes. As members achieve goals and improve their lifestyles this too acts as an advantage to Discovery as healthy members are less likely to be sick ; require as much support from their medical aid(Discovery).
Although Discovery may lose money through the rewards that they provide members they in turn will not have to cover higher medical bills thanks to the healthy lifestyle of their members. This leads to long term profits for Discovery as members reaching health goals live longer healthier lives requiring less medical coverage but still paying the same amount for longer periods as they too live longer. The points brought up in Text 5 about obesity further prove that less healthy people or people with obesity have higher healthcare costs by almost R4400 per person clearly showing that it is in their best interests to keep members healthy through goals and possible benefits.
The increasing number of people with obesity can also be combated through Discoveries customer service. The costs of obesity on South Africa are around R700 Billion per annum including food and healthcare. Worldwide over 11 Million deaths are caused by obesity. These statistics, although they are negative for Discovery by helping their own business, they too encourage change in the society around them and in turn help people suffering of obesity as well as decreasing costs of obesity on countries around the world.
Text 7 states, “The problem with unverified physical activity is that it rewards incorrect behaviour and ultimately, people end up cheating themselves.” The reason to this can be because most points collected can be achieved by cheating or faking it. For example: people swipe their gym cards to record the gym visit to hold the discounted gym membership fee and earn 150 points per visit, and then they leave without working out. People also lie about sports events to claim points without actually having participated in the event. However, Discovery has made changes to vitality to control factors like these.
In my opinion, the Vitality Programme succeeds because it lowers the cost to the company, and it allows long-term profit growth. Vitality attracts new customers which has a positive effect on both the business- because it contributes to the company’s success and image- as well as the customers- because it improves their health.