CASE STUDY ANALYSIS

BANK OF AMERICA

INTRODUCTION

• IInd Largest Bank – 4500 Branches – 21 States.

• Serves 20K households & 2M business.

• Majority of branches in high growth areas & moving from inorganic to organic growth.

• National operations – Decentralized (Gave more power to regional branches).

• I&D model – 20 Lab Bank Models.

• 200 Ideas generated in one year. 20 implemented.

• Result

– Higher Customer Satisfaction & decrease in employee turnover.

– Increase in Revenue.

CURRENT SCENARIO

• Proposal to add new branches which would increase the experiment capacity by 50%.

• Issues/Dilemma’s faced by Brady & Butler :

Stand-Alone Branches v/s Real-World Branches ??

Accept the new proposal or Reject it ??

BANK OF AMERICA’s NEW DEVELOPING SERVICE

• Development process is an experiment in itself.

• Refinements are made at every stage.

• Not every idea/process is successful. But by modifying the failed idea/process a new successful idea/process is created.

I&D’S PRODUCT & SERVICE INNOVATION PROCESS

MANAGEMENT, ORGANISATION & CULTURE

• No formal infrastructure for developing new ideas.

• Least priority was given to Innovation (Which changed to Highest Priority).

• Created a new unit – Innovation & Development (I&D) Team.

• Management is divided by customer, geography & product.

• Very much interested in Innovation – approved 50% increase in branches for I&D team.

• Employee has freedom and authority and responsibility towards clients & customers.

• Collective responsibility for customer experience.

• Culture is driven by cost reduction & consolidation.

RELATING NEW SERVICE DEVELOPMENT WITH NEW PRODUCT DEVELOPMENT• BoA looked for innovation in all areas rather than specific areas.

– For e.g. : WAMU innovated in services only. Fifth/Third Bank innovated on costs only.

• Huge difference between innovation in service & product industry.

• Service Industry innovation requires less capital investment in R&D and less investment in Patents.

• However contrary to this Product industry innovation requires huge capital investment in terms of R&D and Patents.

• It is difficult to duplicate a product because of patents & license.

• Equally difficult to duplicate service – Management, Organizational Structure, Culture etc.

ROLE OF EXPERIMENTATION & THE LEARNING

• Experimentation - Important for all companies.

• Helps in creation of knowledge and improvement of products.

• It also helps in knowing your customers better and hence satisfying the needs of the customer.

• Every experimentation has core processes like – idea generation, experiment design & plan, implementation & feedback for further improvement.

WAYs TO MAXIMIZE LEARNINGS

• They can test the viability of products and services before they launch it.

• By conducting suitable tests like test for fitness of selected concept in the market and also whether the idea is in line with the targets and objectives of the business.

• Undertake proper evaluation on the viability of the products by formally testing the ideas and concepts regarding those products.

• Within all I&D branches the customers were monitored closely to see their reactions to the innovations by a variety of means like surveys or statistics on such factors as revenue growth or number of services used by each customer.

• Shorter turnaround time for feedback would hold experimenters learn and prepare modified experiments more rapidly.

• Can generate more learning by failures. But too many failures will not be accepted.

DECESION POINT:

• YESSSS……!!!!

Butler & Brady should accept the proposal because:

– Allows faster evaluation of ideas through running of more tests and allows less feedback time.

– More refined products. Results in quicker and successful national rollout of products.

– Faster repayment of Debts (Capital used for I&D Team).

– Different Geographic locations and different customer needs according to this locations can be studied.

A GROUP – 6 PRESENTATION

CREDITSTHANK-YOU

DEEPAK RAJAKUMAR GAURAVBHARTI VERMAAMIT KANABARANIL BEHAL