Contents:

1. Introduction
2. Current Situation
3. Problem
4. Alternatives
5. Evaluation of alternatives and recommendations
Introduction:
The journey of Sapphire reserve card in today’s world
■ The chase sapphire range of credit cards were launched in 2009.
■ By 2011, there was enough customer involvement and the company was performing well, however, the
Sapphire team was interested to make stronger inroads into the AFF/HNW segment, hence they launched
the Chase Sapphire sub-brand: Chase Sapphire Preferred Card.
■ It was soon realised that more than half of sapphire total sales and accounts was due to Sapphire
Preferred card.
■ With the realisation that the Sapphire preferred card consumers were more affluent than rest of the
Sapphire card line, company wanted to create an extended line of product focusing on the ultra-premium
high-fee segment. They also realised that the target audience was authentic travelers and savvy about
rewards, and they liked to make the most of every trip, whether it was around the corner or across the
globe.
■ The new Chase Sapphire Reserve card was launched in August 2016 and carried a $450 annual fee.
Cardholders earned 3 points per dollar spent on travel and dining, a 1.5% points-to-dollar conversion rate
toward travel on Ultimate Rewards redemptions, a $300 annual travel credit, and access to the Chase
Experiences platform. At launch, Chase Sapphire Reserve offered a market-leading 100,000-point sign-on
bonus, which was earned after a customer spent $4,000 within their first three months. The bonus offer
alone was worth $1,500 in travel redemption credits on the rewards site.
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Current Situation:
What is the recent change in the market?

■ The Launch offer of 100,000 points sign on bonus was a huge hit for
the brand which spiked the number of customers with the brand.
■ The launch offer of 100,000 points on sign on is reduced to 50,000
points in January and the annual fee of $450 for the existing card
holders to renew the card is due in august.
■ On the other side, Our competitor Citi bank has announced 75,000
points after a customer spent of $7,500 in the first three months

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Problem:
With the one year of launch offers and minimal gains, the question is
now how to make the sapphire reserve launch Profitable?

As the company completed the one year of the Sapphire Reserve Launch,
it was time to see the actual number on how many of their consumers
would stay with the brand, renew their cards for another year, and pay the
$450 annual fee now that the promotional offer was removed. The team
was also interested in assess how the drop to 50,000 bonus points
would impact the rate of new customer acquisition.

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Alternatives:
Below are few alternatives which can guarantee the return of investment in
the market.

1. Growing in The boom of digitalization has made digital media at lower risk
international of market entry and market the product to international, with
markets the advantage of this, company can expand in the markets
outside US.

2. Increasing It means to limit the efforts of teams and the finances to the
Standardization most successful products in the business

3. Growing the It means that building on company’s established assets. It can

product in adjacent be done in different ways like: Existed brand being marketed
markets and sold to new target audience.

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Evaluation and Recommendation:
To make the Business profitable, we recommend to grow the product in
adjacent markets
Does it solve the is it risky? Will there be internal Can we execute it?
problem? resistance?

1. Growing in Yes, expanding in the Yes, because the same No, the company wants to Yes, we can execute this
international markets international markets product can not be sold grow, hence growing in with significant changes
means more business. to all the international the internationally market in the business model
✅ markets. will ultimately. suiting the international
❌ ✅ market.
✅
2. Increasing Yes, If the team pays Yes, it is risky because Yes, there will be internal Yes, we can execute it by
Standardization more attention to the there are customers resistance because this is limiting the spending on
more productive model, attached to other a risky method and not certain products and
the business will grow in product, taking the every senior manager will making the teams focus
the same attention from them and be in favor of the change. on higher profit
✅ risk in loosing the ❌ generating products.
customer. ✅
❌
3. Growing the product in Yes, expansion is No, it is not risky because No, as it is not risky and Yes, we can execute this
adjacent markets required for any business the product is already the business requires by making slight changes
to grow profitable very well established expansion, it will not get to the business model.
✅ ✅ any resistance from the ✅
senior managers
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