Santander Acquires Abbey, Case Study Example

  1. Introduction

Santander has the core capabilities of maximizing retail banking through the use of a very efficient system of managing information. This bank is one of the most successful financial institutions worldwide and has been able to practice an aggressive expansion as well as an advanced competitive strategy gaining advantages. Competitive advantage is provided by the bank’s Partenon system as well as its efficient IT background.

  1.  Partenón Advantages

Partenon offers the ability for Santander to optimize banking operations through the use of IT as well as the ability to generate synergies (Busquets). This system allowed the bank to more efficiently make credit decision, optimize mortgage loans, as well as improve customer service strategies. Though the effective processing of back office management  and complementing the system with  Alhambra Partenon is now able to streamline both front and back office processes, reducing the resources needed for administration and increasing effectiveness.

Partenon is a system that was capable of streamlining business processes to maximize efficiency. This system allowed Santander to become more efficient, increase productivity, and also increase profits. This is much more difficult to accomplish when IT systems are not connected and it is difficult to record and retrieve information from other systems.As the system was implemented results were shown immediately. Santander was able to create total project synergies of 259 Million in 2002 (Busquets). Staff was halved within 3 years, cutting labor costs (Busquets). In 2004, the bank was able to reach an efficiency ratio of 47.44%, globally one of the best in banking (Busquets).

The overall value of Partenon to Santander was to make their technological processes more efficient than any other banking facility. This allowed Santander to gain a core competency that other facilities lacked, giving them the competitive advantage.  With their ever increasing profit margin and efficiency ratio, they were able to continuously improve the system.

  1. Santander Core Capabilities

Due to the core capabilities of IT management thanks to the Partenon system, Santander was able to take advantage of economies of scale with the global factories created by GS (Busquets). Because the company was so successful in this aspect, they were eventually able to acquire Abby National which was the second largest home lender in Britain (Busquets). They were an innovative company, but due to poor management, they were severely in debt. Santander’s intentions when acquiring Abby was to find its potential through leveraging their current technological strategies and resources (Busquets). As the Executive Vice President confirms: “At Santander, technology has always been considered a competitive weapon” (Charley, 2012) Creating two different platforms that flawlessly work together between front-end and back office application and provide solutions for the business and customers alike increased the company’s core competency and reduced the operating budget.

By acquiring and using this successful software in this very large banking facility, the company would be better able to enter this new market and use their competitive advantage to be successful in a new Europe. Increasing customer service quality resulted in gaining more business and personal banking clients worldwide, while increasing customer retention. This also reduced advertising costs.

  1. Capabilities to Efficiency Ratio Effects

By using this technology, the efficiency ratio was greatly increased for Santander. The efficiency ratio measures the unit of cost of income (Busquets). Though the bank was spending money to improve and acquire more assets, the profit margin was increasing at a greater rate improving the ratio. This profit margin would have not increased had the technology not improved business processes to a greater competitive advantage than other banking companies were capable of. Further, increasing capabilities also opened a gap between resources and capabilities, enabling expansion and moving towards the desired future market position.

Santander was a step ahead of most competitors when the Partenon System was implemented. This provided the firm with a better capabilities and efficiency ratio, opened up the way towards expansion, gaining more customers through acquisition or marketing. The system allowed the bank to optimize retail banking. Using their core capabilities within information management, Santander is able to further grow its market share.


Busquets, Javier. “Santandwe Acquires Abbey: The Jack Project.” Barcelona: JITTC, 2011.

Charley, J. (2012) “Do banks need to be IT experts?” It’s a financial world. Web.