...Executive Summary Commerce Bank was founded in 1973 and it was conceived with a very unusual approach towards the standards in the banking industry at that time. The bank opted to focus on customer relationship, providing a “retailer like” experience which enabled them to grow substantially in the following years with outstanding results among all its competitors. The strategy of Commerce Bank was intended to attract customers interested in characteristics such as convenience and service rather than high rates. In their products, they offered deposit or checking accounts with very low or inexistent fees on transactions such as money withdrawal in foreign automatic tellers (ATM’s) or no card replacement charge. Additionally and differently from all its competitors, their value was based on core deposits not in loans. Commerce Bank using this approach, as a result, was able to differentiate from its competitors through high quality service, rewards, awards, hospitality all wrapped up in a unique pleasant experience for customers and employees. This approach was so successful that many competitors have adopted some of the basic services offered by Commerce Bank, bringing the question whether or not, Commerce Bank should continue to engage in this type of differentiation and service oriented operations to stay ahead and continue to grow. Company Overview Commerce Bank as we stated before, was founded in 1973 by Vernon Hill, a part-owner of 45 Burger Kings in...
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...Background of the Case Commerce Bank, one of the leading banks in America differentiated its self from the rest of the banks or competitors on a premise that the banking services could be improved by offering retail experience. The retail experience was named by the management at Commerce Bank as ‘Retailtainment’ with a believe that when customers could pay $6 for a cup of coffee at retail stores like Starbucks for a retail experience then they would for sure accept lower rates of interest on their deposits for a valued customer experience similar to that of the retail experience. Prior to the introduction of ‘Retailtainment’, Commerce bank offered different techniques and services to their customers to create a unique and high end brand reputation. The Dean of the bank, Deborah Jacovelli and Chairman and CEO Vernon W. Hill II implemented an internal system incentives and cultural training, including compensation, awards, intense training and education and commendations to ensure a deep commitment to ‘WOW!ing’ customers. Commerce referred its branches as “store” to offer best services just like retail stores. Commerce encouraged its customers to visit the bank any time and they would get a positive experience even in busy times and days. Just like other banks, Commerce bank also offered all the basic products to customers including deposit products, loans, services, ATM Networks, customer support, etc. Since its inception in 1973, Commerce bank tried to serve its customers...
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...Introduction The situation under investigation is Commerce Bank. Vernon W. Hill is the Founder and former CEO of Commerce Bank, which was founded in 1973 under the motto “The world,…did not need another “me-too” bank. The Bank started with no capital and no brand name, nonetheless Hill managed to differentiate himself from his competitors. Commerce Bank operates more comparable to retailers such as Starbucks and Home Depot rather than a typical bank. Many people choose said retailers over competitors due to buying into their brand. Commerce Bank has branded themselves as a bank that cares all about providing great service for their customers. One Strategy they have is encouraging customers to visits their branches by extended bank hours on the weekday and weekends. Due to this strategic approach in 2001 Commerce Bank experienced a growth of 40% deposit growth, whereas cumulative deposit growth in the United States was 5% in 2001. Commerce Bank method of attracted and retaining customers through outgoing friendly service was effective. Instead of remaining stagnant on customer service tactics, in 2002 Commerce Bank installed the “Retailtainment” program as a latest idea for WOW!ing customers. Competitors were beginning to adopt some of Commerce’s basic service offerings. Thus Commerce developed this program to continue to maintain their competitive advantage. The focus of this case analysis is to discuss how the company’s operation design supports Commerce’s competitive advantage...
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...The Chairman and CEO of Commerce Bank, Vernon Hill was very successful by using the nature of servicescape. Miles & Cannon 2012, stated that firm competitive strategy has an impact on the strength of the relationship between customer satisfaction and servicescape characteristics. Hill’s strategy was to go against industry trends, which were focused on making profits rather than providing a service to customers. Hill also reduced the listening gap. The listening gap is first gap in the Gap Model of Customer Services that illustrates the relationship between company’s perception of consumer expectations and customer’s expected service (Dehghann, Shahin, & Zenouzi, 2012). Hill decided to concentrate on the 62% of customers who chose the bank on convenience instead of the rest of the industry that was focusing on 3% clients, who chose the bank based on high interest rates. The services Commerce Bank offered were based on a personal contact. Their offices were run on “10-minute-rule”, which meant the branches were open 10-minutes before the opening time and closed 10-minutes after official closing time. Longer operating hours allowed more time for customer service. When it was raining, a customer was escorted out by an employee holding an umbrella. They also had phones by ATM machines, so that customers could call if they needed some assistance. Other ways to increase the customers experience were to offer a check view feature for online banking and introducing drive-through-window...
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...Bank Management 465/865 Fall 2014 Homework #1- Analysis of Financial Performance 1. First you will need to download the Asset and Liability reports and the Income and Expense reports for Nebraska Bank of Commerce (NBC) from the FDIC web page. a. Go to the FDIC website, go to Industry Analysis, Bank data and statistics, then use the Institutional directory and find banks. b. Once you find NBC, notice the ID report selection box on the web page. Use this drop down menu to generate Asset & Liability reports for 12/31/10, 12/31/11, 12/31/12 & 12/31/13 and the Income and Expense report for years 2010, 2011, 2012 and 2013 2. Use financial ratio analysis to compare and contrast each year to see what happened to the banks financial performance. Be sure to comment on both its historical and current financial condition. Also, what accounts for the improved profitability of the bank? 3. Identify the five key reasons why the bank turned around based on your analysis. For question 2 - consider calculating the following: Profitability measures such as ROE and ROA Burden/Total Assets NIM Net Credit Loss/Total Loans Non-performing Loans/Total Loans % Growth in Total Loans Consider other ratios you may feel are appropriate to adequately address the questions. Due November 19th at the beginning of class. 2) 2010 2009 Return on assets (ROA) -4.62% -2.68% Return on equity (ROE) -46...
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...study on International Finance Investment and Commerce Bank LTD Thesis for the partial fulfillment of BBA program of BBA (I) in Management Studies PROJECT PAPER ON Information Technology (IT) for improving Banking Activities:- A study on International Finance Investment and Commerce Bank LTD Under supervision ------------------------- Prof. Md. Mosharraf Hossain Ph.D. Professor Department of Management Studies Jagannath University Prepared by: Md. Momin Uddin BBA 8th semester Roll-06671546, sec-B Department of Management studies Jagannath University Letter of submission Date- August 10, 2012 Prof. Md. Mosharraf Hossain Ph.D. Professor Department of Management Studies Jagannath University Subject: Submission of the assignment paper titled “Information Technology (IT) for improving Banking Activities-A study on IFIC Bank ltd” Dear Sir, It’s my pleasure to submit you my project paper on “Information Technology for improving Banking Activities-A study on IFIC Bank ltd.” I have completed my project paper on IFIC Bank ltd as a part of my study. Here is my overview on ‘Information Technology for improving Banking Activities-A study on IFIC Bank ltd. I have tried to explain my learning and experience which gathered knowledge from my thesis program briefly in this report. I appreciate that this approach really contributes in giving my course learning a lasting shape in me. The entire report is based on my research and survey from bank. I have put my best effort to complete the...
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...details Customer receives e-mail with package details Customer needs assistance Customer needs assistance Customer wants to cancel Customer wants to cancel Supplier calls business relations advisor at ‘Out of the Bubble’ Supplier calls business relations advisor at ‘Out of the Bubble’ Supplier needs to cancel Supplier needs to cancel Supplier needs assistance Supplier needs assistance Supplier receives payment and e-mail notification of new purchase Supplier receives payment and e-mail notification of new purchase New customer New customer Customer places order via website Customer places order via website Supplier registers on ‘The Bubble Gateway’ with commerce details (bank account details, package capacity etc.) Supplier registers on ‘The Bubble Gateway’ with commerce details (bank account details, package capacity etc.) New package supplier New package supplier Order Processing Order processed on Out the Bubble system (via direct forms). Order processed on ‘The Bubble Gateway’ with suppliers. Order Processing Order...
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...Overivew of Alibaba’s Business Alibaba is the largest e-commerce (online and mobile) company in the world based on gross merchandise volume in 2014. It is also the biggest e-commerce company in China dominating more than 80% of the country’s e-commerce market share. Alibaba operates a similar business model to eBay by providing technology infrastructure and marketing reach in the form of online marketplaces for merchants to conduct online transactions with cosumers and businesses. Unlike Amazon, Alibaba does not hold or sell any merchandise. Instead, Alibaba plays the role of a middleman to connect buyers and sellers and facilitating the transactions between them (MarketWatch: Alibaba, 2015). Thus, purchase of the physical merchandise is made directly from the 3rd party businesses (eCommerceFuel: Alibaba vs Amazon, 2014). Supporting Alibaba’s business through maintaining buyer’s confidence is its secured online payment platform, Alipay that provides escrow services. Alipay manages the bulk of the transactions that take place on Alibaba’s China marketplaces. Alibaba operates both China and global marketplaces. Its China marketplaces include Taobao, Tmall and Juhuasuan whose presence continues to dominate China’s e-commerce marketshare. At the end of 2015, Gross Merchandise Volume (GMV) transacted on these retail marketplaces was RMB964 billion (US$149 billion), an increase of 23% over 2014. Alibaba’s global marketplaces include Tmall global –an extension of Tmall, Aliexpress...
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...method used in the international trade for the payments of the goods .This method of letter of credit considered to be a prime instrument for international commerce financing and its operation has been highly harmonized by the Uniform Customs and Practice for Documentary Credits (“UCP”). The letter of credit is considered to be the unique form of contract which gives rise to relationship between the various parties: the contract between buyer and banker, the contract between banker and seller and between issuing and correspondent banks. One of the main principle of letter of credit or documentary credit on which credit transaction is based is Doctrine of strict compliance which provides that in order to obtain the payment from the bank, the documents presented to the bank by the seller-beneficiary on their face strictly confirm with the terms of the credit. MEANING OF STRICT COMPLIANCE:- In general, Doctrine of Strict Compliance referred to as a legal principle which provides that the bank is entitled to reject documents which do not strictly conform to the terms of the credit. The doctrine provides that in order to receive the payment from the bank the seller/beneficiary is required to tender documents which are in conformity with the terms of the letter of credit. And under this principle of strict compliance the bank is at liberty to reject the documents which do not strictly complied with the terms of the credit. The principle of doctrine of strict compliance was first...
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...advising bank by acceptance of beneficiary’s draft at 90 days sight on the advising bank. (2) Drawer bank’s discount and/or interest charges and acceptance commission are for the account of applicant and therefore the beneficiary is to receive value for the term drafts as if drawn at sight. (3) We are authorized to pay claim in respect of your discount amount relating to this credit in excess of the credit amount. (4) Upon receipt of full set of documents in conformity with credit terms, we shall credit draft amount as indicated on BP Advice plus discount and other charges at maturity to the credit of your Beijing Office DEM account with us. |Name of Issuing Bank: |Irrevocable | |COMMERZE BANK AG. |Documentary Credit Number329485 | |Place and Date of Issue: |Expiry date and Place for Presentation of documents | |Hamburg, 2 March, 200X |Expiry Date: | | |Place for Presentation: | |Applicant: | | |Karl and Rosendner Co., Hamburg | | |Advising Bank: Reference...
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...Organisations Public, Private and Global Enterprises Business Services Emerging Modes of Business Social Responsibility of Business and Business Ethics } } } } } 22 26 22 22 12 16 120 20 18 12 50 Part B: Finance and Trade 7. 8. 9. 10. 11. Sources of Business Finance Small Business Internal Trade International Business Project Work 30 16 30 14 30 120 20 20 10 50 PART A: FOUNDATION OF BUSINESS Unit 1: Nature and Purpose of Business: • • • • • • • Concept and characteristics of business. Business, profession and employment -Meaning and their distinctive features. Objectives of business - Economic and social, role of profit in business Classification of business activities: Industry and Commerce. Industry - types: primary, secondary, tertiary - Meaning and sub types 120 Periods 22 Periods Commerce - trade: types (internal, external, wholesale and retail; and auxiliaries to trade: banking, insurance, transportation, warehousing, communication, and advertising. Business risks - Meaning, nature and causes. Meaning of business with special reference to economic and non-economic activities.Two or three definitions of business with one conclusive definition. Fundamental features of business which differentiate it with other activities of society. Meaning of profession and employment with one definition of each including all their features. Differentiating features of business, profession and employment. 236 Meaning and classification of objectives of business as : Economic Social...
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...be fully diligent?” First Midwestern was a well-known bank and has a good relationship with Wisconsin for several years. In my opinion the bank did not provide the correct advice to Wisconsin in structuring and financing the transaction. One of the main reason was, because Wisconsin did not advised their bank with all the details and negotiations happened between them and Vietnamese buyers. The management of Wisconsin had deal with Saigon jewels, (buyers) that they will buy back the finished polished stones and jewelry from Saigon over the period of three years at fixed price. Firstly, Midwestern did not do their due diligence on Wisconsin as well as on Saigon. They proposed certain recommendations to Wisconsin on how to structure the transaction. First they advised Wisconsin to get the irrevocable letter of credit from Saigon’s bank with the conformation add to it. And the total amount ($3 million) to be paid in three installments, first at the sight and remaining two in the term of 12 months. Secondly, they advise the letter of credit for three drafts to be drawn on the seller’s bank and to be accepted by issuing bank after shipments and presentation of all documents specified in LOC. And the first draft was to be payable three months after the shipment, second and third draft were to be due in twelve month terms. Lastly, they agree to confirm the documentary credit if requested by the buyers bank. Midwestern bank did not advise Wisconsin to get the EDC insurance to reduce/avoid...
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...a profit margin. In Islamic finance a sale of goods in which a bank purchases the goods on behalf of the buyer from the seller and sells them to the buyer at a profit, allowing the buyer to make installment payment. A sample calculation of a 20 years property financing is as follows: Assume that you take out a 20 years financing for a house terrace of RM250,000 at a profit rate of 5.88%. The monthly instalments and total repayment would be based on the following formula: (PMT) = [FA (1 + r)n r] / [1 + (1 + r)n – 1] Whereby: PMT is payment of monthly instalment FA is facility amount r is profit rate (per month) n is periodic payment (no of months) Monthly instalment= [RM225,000 (1 + 0.0049)240 x 0.0049] / [1 + (1 + 0.0049)240 – 1] = RM1,596.43 Whereas the Bank’s selling price is = RM1,596.43 x 240 months = RM383,143.20 • Bai Bithaman Ajil means sale of goods with deferred payment, • Bai(sale), Bithaman(price), Ajil(deferment). • BBA is sale with deferred payment and is not a spot sale. • BBA used for financing property, vehicle, as well as financing of other consumer goods. Type of product : - Land / property financing - Vehicle financing - Consumer financing - Assets financing 1) Customer identify a house to be purchased(sign S&P agreement) 2a)Bank purchase the house and pays the house developer 2b)Payment to housing...
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...The emergence of the internet in the mid-1990’s has had a revolutionary impact on commerce and culture. We have near universal access to instant communication. No single invention has had a greater impact on how a business interacts with its customers. The internet, along with mobile communications, quite literally shaped the business world into what it is in the present day. Sure, the tried and true ideals of fulfilling a customer’s wants, by providing exceptional service and creating an enjoyable experience are still very relevant. But how a business provides these services and experiences has radically changed over the last 20 years. A key to success for a small business has always been reaching out to, maintaining, and increasing the business’s customer base. A local business, prior to the internet, could advertise in the local paper, on a billboard, or maybe with a commercial on the local channel. These methods limited the effective reach of the advertisement, to the distribution area of the newspaper, the broadcast region of a radio or television station. Today, a small business can effectively reach anyone across the globe, so long as they have access to the internet. Commercials are no longer limited to airing on your local television station. Simply by uploading your TV spot on YouTube, creates instant access to the millions. Social media is a huge driver all commerce, not just small...
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...1. The underlying causes for the outbreak of the price war are the close proximity of two competitive businesses and the lack of pricing cooperation needed to benefit from such a situation. Having two competitive businesses in a “fish bowl” atmosphere like this requires both businesses to agree on a price and stick to it. They also need to find ways to differentiate themselves from one another. This could decrease the “head to head” atmosphere and help both businesses carve out their own niche. In a business that relies on sales to tourists, customer loyalty is not an issue. Therefore, a price war is not going to be productive for either business. Settle on a price and let each capitalize on there own segment of the market by differentiating from one another. The problem with a price war is that when one business lowers its price it won’t be long before the other business will do the same. It just goes back and forth until one or the other is out of business. The only one that wins is the customers taking advantage of the good deals. However, that advantage will be short lived once one of the businesses exits the market and the other can then charge what it wants. This is referred to as predatory pricing. According to Miller, Cross (2007) “predatory pricing is when one firm drives the other out of business by lowering its prices. Once control of the market is gained back, the firm will attempt to recapture its losses and go on to earn higher profits by driving...
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