San Jose Goodwill Bank has been experiencing signicant competition from nonbanking nan-cial service providers such as mutual
Question:
1. Broaden the markets to include investment and insurance products. The goal was to become a complete financial services provider to stop the loss of the higher-end customers. The broadening would also reduce the dependence of the bank on interest-based revenue. (Investment and insurance products produce fee-based revenues.)
2. Alter the customer mix by targeting only the upper three customer segments.
3. Set the bank apart from competitors by offering special, high-quality services to targeted customers:
a. The upper segment of customers will be classified as “Premier One” and will be issued a gold card. When presenting the card to a concierge at the door, the customer will be taken to a special teller window with no line, or to the desk of a specially trained bank officer.
b. For the highest-end customers, no-questions-asked refunds on fees that they think they shouldn’t pay (categories one and two). Middle-end customers can negotiate. Low-end customers must pay the fees (categories four and five).
c. Provide secret, toll-free “VIP” numbers to customers in the Premier One category. In this way, they will have immediate access to a bank official for any inquiry they may have.
d. Impose a $4 teller fee for lower-end customers (categories four and five).
4. Improve operating efficiency by increasing productivity and eliminating costs that produce no
Required:
1. Describe the strategic positioning of San Jose Goodwill Bank in terms of the three general strategies: cost leadership, differentiation, and focusing. Of the three, which one(s) are apparently receiving the most emphasis?
2. Describe the role of cost management in defining the strategic position of the bank. What role do you think cost management will play as the bank attempts to establish and enhance its strategic position?
Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
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Related Book For
Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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