Back in the 1980s, banking in the United Kingdom was dominated by four conservative and traditional big banks. Getting a loan or mortgage or discussing an overdraft meant a visit to your local branch and an interview with a manager, who was often seen as a rather intimidating authority figure by many customers. Noticing that some customers rarely or never visited their branch, which removed the opportunity for upselling and cross-selling, the UK-based Midland Bank assembled a team to find out why. They discovered that many people simply didn’t like queuing for service or arranging meetings with unfriendly managers. Inspired by the telephone banking services that were emerging in the United States, they created First Direct, a new telephone-only bank.........

1. Recently, First Direct has moved away from using service quality as their main differentiator, choosing instead to emphasize their high-quality, innovative digital offerings. Create a positioning grid for First Direct and any other UK bank, and explain your choice of vertical and horizontal parameters.

2. Why was it necessary for First Direct to move away from using service as its main positioning factor? Comment on its switch to the positioning of a modern digital bank.