Mediolanum Bank: Strategy Execution and Growth Analysis

This case study examines the strategic evolution of Mediolanum Bank, founded by Mr. Ennio Doris, from a bank without physical branches to a leader in online financial services. Initially utilizing telephone and dedicated TV channels, the bank adapted to the internet, leveraging global financial consultants and ultimately transitioning to a 'family banker' model. The analysis highlights the bank's cost-cutting measures, competitive fees, and growth factors, including client acquisition through personal networks and advertising events. The 5D strategy (diversification by time horizon, across securities, geographies and industries, growth potential, and instrument classes) is also discussed. This approach enabled the bank to manage assets effectively. The study offers insights into Mediolanum Bank's entrepreneurial journey and strategic adaptations in the financial sector.

Mediolanum Bank Strategy
The founder of Mediolanum Bank Mr Ennio Doris came up with a strategy of a bank
without bank offices and queues. The Italian entrepreneur introduced this strategy long before
the arrival of the internet.
The strategy led to Mediolanum Bank client’s being served via the telephone, then
through bank dedicated TV channel. Later the Mediolanum Bank would move to the use of
internet and global financial consultants for more advanced operations. This strategy made sure
that every client was able to access financial services concerning their individual needs, place
and time of their choosing (Bank & Bank, 2014).
The strategy of no bank offices and no queues helped the bank to cut on its vital fixed
costs that were brought about by the traditional banking systems that the bank was initially using.
As a result, the Mediolanum Bank was now able to offer its clients financial services at very
competitive fees.
The coming of the internet and it's widespread came as a boost for Mediolanum Bank
Entrepreneurial strategy. The bank strengthened its strategy by offering services that required
human interaction for both global financial consultants and normal bank operations conducted
via the telephone (Chaston, 2016). Mediolanum Bank could now offer convenient online banking
services seamlessly and with speed.
Mediolanum Bank Entrepreneurial strategy led to the growth of the bank leading to an
increase in the total assets managed by the bank. This growth was attributed to three main
factors. That is the number of clients, the launch of a new product and the number of global
financial consultants.

In Mediolanum Bank Entrepreneurial strategy, new clients were primarily acquired
through personal networks especially those belonging to the global financial consultants. Also,
the existing customers would use word of mouth to acquire new clients for the bank (Saparito &
Colwell, 2010). In its strategy, Mediolanum Bank moved to traditional techniques of advertising.
From mid-2000 the bank would start advertising through events for both existing and prospect
clients. During an event like wine-tasting, the global financial consultants would get the chance
to introduce themselves to new potential clientele (Mosey & Kirkham, 2017).
Later in 2000, the bank would start exploring options of going global. They wanted to
acquire stakeholders in countries like Germany and Spain. In 2006, Mediolanum Bank launched
its concept of a family banker who would replace the global financial consultants. This would
mark the final transition in the bank’s strategy from a financial services company to a retail bank.
The assets would be managed by what is popularly known as the 5D strategy.
(i) Diversification by time horizon – here investments are done according to time and with
respect to individual goals
(ii) Diversification across securities – You lower the risk of a portfolio by introducing many
securities.
(iii) Diversification across geographies and industries – investing in different
geographical areas increase security.
(iv)4D - Diversification in terms of growth potential – a long term view of a portfolio should
include emerging markets.
(v) 5D - Diversification across instrument classes – You use various investment tools for
added stability and security like mutual funds, financial insurance among others.

References
Bank, W. B., & Bank, W. (2014). World Bank Group Support for Innovation and
Entrepreneurship: An Independent Evaluation. Washington, DC: World Bank
Publications.
Chaston, I. (2016). Entrepreneurial Marketing Strategy. Entrepreneurial Marketing, 70-90.
doi:10.1007/978-1-137-50092-2_4
Mosey, S., & Kirkham, P. (2017). Entrepreneurial strategy. Building an Entrepreneurial
Organisation, 21-35. doi:10.4324/9781315716084-2
Saparito, P., & Colwell, K. (2010). Firm size, bank relational strategy and credit: the mediating
role of bank knowledge in small firm access to debt finance. International Journal of
Entrepreneurial Venturing, 2(1), 40. doi:10.1504/ijev.2010.033916