Description
Case:Prime Bank of MassachusettsPrime Bank of Massachusetts was started in 1964 with James Rogers asCEO, who is now chairman of the board. Prime Bank had been growingsteadily since its beginning and has developed a loyal customerfollowing. Today there are 45 bank locations throughout Massachusetts,with corporate headquarters in Newbury, Massachusetts. The bank offers awide array of banking services to commercial and noncommercialcustomers.Prime Bank has considered itself to be a conservative, yet innovative,organization. Its locations are open MondayFriday 94 and Saturday912. Most of the facilities are located adjacent to well-establishedshopping centers, with multiple ATM machines and at least threedrive-through windows. However, Prime Banks growth has brought oncertain problems. Having the right amount of tellers available in thebank as well as in the drive-through window has been a challenge. Somecommercial customers had recently expressed frustration due to longwaiting time. Also, the parking lot has often become crowded during peakperiods.While Prime Bank was going through a growth period, the general bankingindustry had been experiencing tougher competition. Competitors wereincreasingly offering lower interest rates on loans and higher yields onsavings accounts and certificates of deposit. Also, Prime Bank wasexperiencing growing pains, and something needed to be done soon or itwould begin losing customers to competition.The board, headed by James Rogers, decided to develop a more aggressivestrategy for Prime Bank. While many of its competitors were competing oncost, the board decided that Prime Bank should focus on customerservice in order to differentiate itself from the competition. The bankhad already begun moving in that direction by offering a 24-hourcustomer service department to answer customers banking questions. Yetthere were difficulties with this effort, such as poor staffing and notenough telephone lines. James Rogers wanted Prime Bank to aggressivelysolve all customer service issues, such as staffing, layout, andfacilities. He also wanted greater creativity in adding improvements incustomer service, such as on-line banking, and special services forlarge customers. He believed that improving most aspects of the banksoperation would give Prime Bank a competitive advantage.The board presented their new strategy to Victoria Chen, vice presidentof operations. Victoria had recently been promoted to the V.P. level andunderstood the importance of operations management. She was asked toidentify all changes that should be made in the operation function thatwould support this new strategy and present them at the next boardmeeting. Victoria had been hoping for an opportunity to prove herselfsince she began with the bank. This was her chance.
Case Questions
Why is the operations function important in implementing thestrategy of an organization? Explain why the changes put in place byVictoria Chen and her team could either hurt or help the bank.
Develop a list of changes for the operations function that should beconsidered by the bank. Begin by identifying operations managementdecisions that would be involved in operating a bank, for example,layout of facility, staff, drive-through service.
Then identify waysthat they can be improved at Prime Bank in order to support the strategyfocused on customer service.Think of the improvements identified in answering question 2.
Howdifferent would these improvements be if the bank had a strategy ofcutting cost rather than supporting customer service?
