Death of ING Direct Almost Complete. Scotiabank and Capital One Implementing Takeover. It was a Good Idea While it Lasted.

The slow death of ING Direct in North America is almost complete. After Capital One's $9 Billion purchase of the American unit of ING, and ScotiaBanks's $3.1 Billion purchase of the Canadian unit, both banks have been shuttering a number of ING's once thriving business units.

In Canada, Scotia announced that they will be closing ING Direct's Mortgage Broker unit, which offered discount mortgage loans to Canadians via mortgage brokerage offices. Clearly, this is an attempt to consolidate and direct business to the traditional ScotiaBank unit, and hopefully raise costs and rates for Canadians through reduced competition. This is happening after ScotiaBank just recently promised everything would stay as-is at the ING unit, and that they would not attempt to reduce competition through their acquisition. Did Scotia lie?... I am sure everyone is very surprised : )

In the United States, Capital One is renaming ING Direct "Capital One 360," and eliminating the firm's iconic orange branding. The new colour for ING? Dark blue and maroon. Capital One, however, promises ING clients no change in services, which sounds familiar to what Scotia said in Canada. 

Undoubtedly, both Capital One and Scotiabank will start enacting "cost saving measures" to increase "efficiency" at their new banking units, and this will mean job losses for many of ING's North American employees. This will be good news for Scotiabank and Capital One shareholders, but undoubtedly bad news for those employees, their families, and probably ING Direct's North American customers as well.

Less competition is good for corporate profits, but bad for banking customers. Continued consolidation in the banking sector leads to reduced options and higher prices. This means higher interest rates on loans, lower interest rates on savings, and higher banking fees. For investors in Scotia and Capital One, it means higher profits.

Cheers, and Happy Investing! 

Canadian House Prices. Sales Down, but Prices Hold Firm. Toronto and Vancouver Real Estate Weigh Heavily.

The average resale housing price has risen to $352,800, up 1.6 percent over last December. That is the good news. Overall, sales of existing homes in Canada declined by 17 percent from the level last year.

In addition, the supply of new homes onto the market has been steadily declining for three months. This reduced level of supply has helped to ensure that prices have remained relatively steady, as has a reluctance from home-owners to accept prices lower than they have become accustomed to in hot markets.

According to the CREA's chief economist, Gregory Klump, sellers are simply taking their homes off the market and holding firm if the prices they desire are not materializing. This has made for a slower market, but at the same time, there is a strong semblance of stability. 

The national average is being particularly weighed down by Toronto and Vancouver, which if removed from the sales data, results in a 3.3 percent price increase. 

Bad news for home owners and real estate investors? Not necessarily. Stability and consolidation in the marketplace is a good thing. A long slow period of price consolidation can help to familiarize buyers and sellers with more realistic and current price levels, and help mitigate a price collapse in the future. Also, as indicated above, Toronto and Vancouver are seriously weighing down data, so for those buying in many smaller urban centres across the country, the current situation is actually better. 

Cheers, and Happy Investing. 

A Business Plan for Entrepreneurs, Investors, and Business Owners. Stay on Target.

A recently published CX Blog article highlighted some strategic questions that have to be asked when preparing your sales plan. Though written primarily for the eyes of entrepreneurs, the information and message is very useful for independent business owners and shareholders alike. 

If you had to reflect on the sales plan for any of your investments, do they make sense? Are they clear? Or are they convoluted and lacking focus and attention? 

Below I have highlighted 7 strategic business questions for you to consider as owners, entrepreneurs, and investors: 

1. Why should people want what you're selling?

What does the product or service help people do? What need does it satisfy? 

2. Who are you selling to?

Are there target markets for the product or service that you want to sell? Do they have specific demographic characteristics? Are you focusing on a specific region really well? Or are your efforts scatter-shot all across the map?

3. Who is your competition?

Who are the top competitors in this industry? How are you different? What do you do better? What can you learn from your competitors, and what are they not doing well? Is there a hole in the market that they are not satisfying?

4. What is your price point?

You need to consider what the current price range is for the product or service that is being offered? Where do you fit into the mix? Is there something you are offering, or that you can offer that can put you into a higher price point? Or do you want to be at the bottom? If you want to be at the bottom, make sure your costs are less than those of your competitor. 

5. How many customers do you need to reach your profit goals?

Or, how much volume do you need to do? Have you established your break-even point, above which you start to make a profit, and below which you are operating at a loss. Not knowing key information such as this leads to a lot of business failure early on. 

6. How will you reach your market?

How will you gain new customers? Will you utilize referrals, advertising, sales promotions, et cetera? Try to track what works and what does not. For instance, have you had any success with old media like newspaper ads, or do you need to shift your focus on-line? 

7. Is there a clear sales pitch?

Often referred to as the 30 second elevator speech, a business needs to have a directive clear and transparent enough to be explained in 30 seconds or less. You need to be able to state what need you are satisfying in the market, and either differentiate yourself from the crowd or place yourself in a target niche. Will anyone remember or be able to explain to someone else what exactly it is you or the business does?  

Try to read the above noted points a few times, and think about them in relation to your own business interests, or even perhaps your own personal brand. 

Cheers, and Happy Investing. 

Matthew.