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Home / Questions / 9-711-015 REV: DECEMBER 13, 2010 GUNNAR TRUMBULL ELENA CORSI ANDREW BARRON Santander Consu


1) should santander operate in new markets such as brazil, india, and china?
2) what functions should be centralized in order to gain efficiencies and which should be decentralized?
3) What is a good product mix for santander for the next 10 years?

ANDREW BARRON Santander Consumer Finance
Centralization only makes sense if the final result is better than the simple sum of the parts.
— Magda Salarich, CEO, Santander Consumer Finance Introduction
On March 25, 2008, Magda Salarich Fernández de Valderrama, the Chief Executive Officer (CEO)
of Santander Consumer Finance (SCF), a division of Grupo Santander, looked out across the bank’s
shining new campus, the Ciudad Financiera, just south of Madrid. Salarich had been appointed CEO
in January 2008 after working for 28 years for the French car producer Citroën, where she had risen
through the ranks to the position of international marketing and sales manager for Europe and CEO
for Spain. SCF had grown rapidly in the past five years under its former CEO, Juan Rodríguez
Inciarte. Salarich’s job would be to chart the way forward for the next ten years.
While the United States remained the largest market in the world for consumer finance, the sector
had also been growing in the last 20 years within Europe. Inciarte had captured this trend. Under his
helm (2002-2008) SCF had grown from a small group of units operating in Spain, Germany and Italy,
into one of the largest consumer finance companies. Also, since 2006, Inciarte had invested outside
the EU: in the United States, Latin America and Eastern Europe.
In four months, Salarich would have to present a new strategy and direction for SCF to
Santander’s Chairman and Executive Director, Emilio Botín-Sanz de Sautuola y García de los Ríos, as
well as to the other members of the group’s Executive Committee, including Inciarte himself.
Important decisions had to be made. Could the high profitability of the consumer lending activities
be sustained? Was it time to focus more attention on consolidation, or should she further invest in
new markets and products? There were also important questions of organizational strategy to
address. Which functions should be led to national affiliates to decide, and which should be
centralized at headquarters? What processes should be standardized, and which left to local
initiatives? And all of these decisions would be set against a background of growing concern about
the sustainability of household debt levels in Europe and the United States. ________________________________________________________________________________________________________________
Professor Gunnar Trumbull and from HBS Europe Research Center, Research Associate Elena Corsi and Research Assistant Andrew Barron
prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of
primary data, or illustrations of effective or ineffective management.
Copyright © 2010 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business School Publishing, Boston, MA 02163, or go to This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. 711-015 Santander Consumer Finance History of the Santander Group
The Santander Group was founded in 1857, when the Queen of Spain authorized through Royal
decree the creation of a bank in the city of Santander, in Cantabria, northern Spain. Seventy-two local
businessmen subscribed to the bank’s capital. Through the years the bank increased its business in
Spain and in the 1950’s it opened offices in a few Latin America countries and in London. Under the
leadership of Emilio Botín, who succeeded his father as Chairman and CEO of the group in 1986, the
bank reinforced its position in Spain launching products such as Supercuenta that doubled the bank’s
market share on deposits and with the 1994 acquisition of Banco Español de Crédito (Banesto) and
the 1999 merger with Banco Central Hispano (BCH). Botín also expanded to foreign markets,
acquiring banks and opening new offices in Latin America, Europe and the United States.
To keep pace with its rapid growth, in 2004 the Group re-located operations from downtown
Madrid to the Ciudad Financiera Santander, a 160-hectare financial campus in the suburbs, with also
education and training facilities, sports facilities including an 18-hole golf course, on-site childcare

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