Soharab Sabuj People, Service & Profit At JYSKE Bank : A Case Study on JYSKE Bank ~ Assignments On Business Issues

Friday, March 7, 2014

People, Service & Profit At JYSKE Bank : A Case Study on JYSKE Bank

This case is of the JYSKE BANK. It was established in 1967 with the merger of 4 Danish banks. It is the third largest bank in Denmark. In this case it is focused that JYSKE BANK has a strong ground in the banking market of Denmark and they are the market leader of customer satisfaction by utilizing their model called JYSKE FORSKELLE. JYSKE BANK practices this model to satisfy their valuable customers.
The model’s name JYSKE FORSKELLE has the meaning of JYSKE differences. That means, although initially the bank followed the traditional banking approach then it felt to bring some differences from its core values in customer services comparing to its competitors. The main goal of this difference was changing product oriented JYSKE BANK to customer oriented bank.

JYSKE bank is introducing the 5 dimensions of service quality in its core values of operations. This relationship between core values and 5 basic service quality dimensions are – 

Core Value
Service Quality Dimension
Effective and sustainable
Reliability
Open and honest
Assurance
Commonsense
Responsiveness
Genuine interest and Equal respect
Empathy
Physical innovations in service
Tangible


Question 1
As of the mid – 1990s, what was JYSKE Bank’s competitive positioning, that is, what did it do for customers relative to its competitors?

The JYSKE BANK places great emphasis on its three groups of stakeholders, shareholders, to treat clients and employees, with the same respect. If the balance in favor of one or two groups shifts, is the long-term expense of all groups.
In mid 1990s JYSKE was dealing a group of customers with one employee. For that reason possibility of serving each customer simultaneously was pretty difficult which was making fellow customers very annoying and disappointed. In that case customers’ incompatible needs were negatively affecting each other.

Employees were provided ID cards with dull images that were not indicating friendliness in providing services. Moreover loan processing criteria was pretty critical both for employees and customers. These were hampering service popularity and long term satisfaction among customers. Beside that employees were no feeling themselves empowered enough to be one of the important stakeholders of the organization.

The core values of the Bank are its fundamental basis. In relation to customers and staff, have the following characteristics which JYSKE Bank makes it unique:

Common sense
Open and honest
Different and unpretentious
Genuine interest and same attention
Effective and sustainable

Academy of management led these same values to reevaluate how the Bank has with their customers. The manager knew that if these values, they change their conservative attitude of the past and a service, which should be distributed and innovative Bank wished to remain faithful to the customers within a competitive banking sector.


Question 2
As of 2003, what was JYSKE Bank’s competitive positioning?

Originally JYSKE Bank was following an old-fashioned banking system. Its competitive differentiation strategy was originated from its core values and differences. Those are consisting equality, transparency, honesty, respect and efficiency.
The goal was to embed firm’s values in each of the external customer of its business and operations and stand out from the competition. In the mid-1990s, JYSKE bank transformed and positioned itself as a very customer-focused bank. Then they began to promote relationships with customers to understand their needs and solutions in accordance with their strategy. Its only target was less risk bearing customers those are ready to afford a premium price and were comfortable with the banks candid personality and portrayed image.

This strategy went beyond the traditional product-centric approach, as most of the banks have taken it over. JYSKE Bank differentiates itself on the aspect of service provision and it invested in tools, employee capability, solutions and increase spending time with their customers.

JYSKE introduced a new competitive positioning in its branches and all sorts of operations. New positioning is shown below -     

       

Out of Box Services -
·         Developing a niche marketing and targeting the right set of customers.
·         A single customer is assigned to a small group of employees in each of the branches of JYSKE bank to ensure better and quick service with compiled effort.
·         JYSKE bank is keeping friendly picture employees on the ID card.

Value addition -
·         To be nice to every customer to ensure satisfaction.
·         Making available time for customers.
·         Caring customers as much as possible
·         Focusing on niche marketing for extremely valuable customers.
·         Training for building team and provide adequate services.
·         Empowering employees with training and allotting enough power to make instant decision at least at the branch level.
·         JYSKE bank is offering attractive incentives to their employees to increase satisfaction and commitment to the organization.


Cutting Edge -
Here tools developed means – Customers’ needs are identified. And the combine effort of these tools and employees are cutting edges.
·         JYSKE bank developed IT tools to help customers in identifying customers’ problems and providing proper solutions.
·         Both employees and the tools are providing appropriate solutions to customers.


Service & culture that differentiates–
·         More employee centric approach to maintain customer satisfaction.
·         Empowering employees for decision making.
·         Employee training for fro better service orientation availability for customers.
·         Changing the style of delivering financial services to customers.

Question 3
What did JYSKE Bank change to enable it to deliver its new competitive positioning?

Any product based or service organization can bring some differences in their corporation. JYSKE bank is a service organization that is required to do some competitive positioning. It introduced some tangible and intangible differences in its organization to do so. To maintain the satisfaction among existing customers and gaining new customers Jyse brought these tangible and intangible changes into its service system.

Some Tangible changes those were brought in JYSKE Bank’s operation:
Account Team:
This was started when each employee of the branch to serve as primary point of contact. There were many problems. Gradually JYSKE bank identified that many valued customers are coming to the bank simultaneously.  Employees are busy with customers who were arrived first. But JYSKE bank were committed to provide individualized service to each customer. This situation was hampering their commitment. Then the accounting tem of that bank introduced the team based performance criteria. That means  each of the customer of JYSKE bank were assigned to a particular tem. The team members were looking that problem by working together. The facility from that tem based performance was that providing each customer with great ease, providing individualized service to each customer and maintaining customer satisfaction in highest level by keeping close physical proximity with each customer.          

Branch Design:
JYSKE bank spent huge amount of money to redesign their bank branches. The purpose was not only to decorate it to look attractive. There were some other reasons to make their branches customer friendly. So that customers can take their services with a great ease and comfort. Some of the beneficial effects of the redesigning branches are -   
                                    Interactional attractiveness - JYSKE bank were creating interactional attractiveness among valuable customers through architectural and design changes. They are delighting their waiting customers with coffee, fresh juice and with a play center for children.
                                    Signifying Quality - Employees layouts in the branches signifies quality of the service. Because, 3 or 4 employees were sitting at a single large round table to provide quick services to customers.
                                    Reinforcing Openness – IT system of all branches were designed to structure interaction between team members and customers. Because employees computer screen were placed like that customers can see them and ensured openness to customers.        
If conversation goes long there were meeting rooms those were ready to give services with feeling of home.

Details:
JYSKE bank tried to show that their employees are working with genuine interest to serve customers properly. For that they hired professional photographer who worked with employees and captured the genuine interest in employees’ eyes.
That means JYSKE BANK ensures the physical facilities for customers. These physical conditions ensured the proper tangible differences in branches of JYSKE BANK.

Some Intangible changes those were brought in JYSKE Bank’s operation:   
To enable the competitive positioning JYSKE Bank also did some intangible changes in its operations.

Training:
JYSKE Bank provided adequate training to their employees. It helped the team based service strategy of JYSKE Bank to provide service in the way out of traditional retail business.
Branches’ Empowerment: the decentralization of loan process
As employees are trained properly they are also given some additional power to provide the service with a great ease.

Generally in traditional banking services when customers are arriving for the sake of arranging loan there are some provisions of allowing getting loan. If a customer was to apply for a loan the entire procedure used to take a long time as the branch manager used to write a formal application and forward the application to the regional level for approval. This is a lengthy and time consuming process.

To get rid of this hassle JYSKE BANK empower their employees with proper training to approve the loan as soon as possible. JYSKE make the particular employee the owner of the loan. This system was implemented to affect the service internally and positively. Managers became enabled to contact to customers and collect information properly. And quality of data collected is increasing. For that reason manages are approving small loans almost instantly. All the employees were told – “When in doubt, ask. However, if there is no doubt, go ahead”. From this we can get ideas about the benefit of empowering employees and improving efficiency of the service. 

Question 4 
How did JYSKE Bank implement those changes?

JYSKE bank brought some changes in its management style. JYSKE used many tools, trainings and JYSKE values to link them together through the share of values of their employees. JYSKE bank implemented these in changing especially, their human resources.
The Bank reached its new customer-oriented competitive method. It is known as STP and goes through the positioning in 3 stages - segmentation, targeting and finally positioning. JYSKE bank implemented it in following ways -

1)      Segmentation is done by following ways –
Private Banking
Corporate Banking
Consumer Banking
2)      Targeting is done by following ways –
Danish families
Small to Medium Danish companies
3)      JYSKE bank finally positioned their bank as – A bank which makes a difference for the customer.

           ## JYSKE Bank was selecting their employees not only depending on their banking skills; they are also evaluating the social abilities of each and every employee which will go along with service mindedness and some JYSKE values such as: openness to customers and genuine interest in other people. JYSKE bank hires employees only if employees are consistent to JYSKE values to ensure satisfaction of customers.

           ## JYSKE Bank made employees’ development as every employee’s responsibility. JYSKE helped in development of employees by investing more on it. But they kept the development of every employee within the JYSKE values.

           ## JYSKE bank offers a few monetary incentives to its valuable employees to keep them motivated and perform better. IT is the part of reward facilities based on performances. JYSKE provides three types of incentives - stock, one-time payments and annual raises. The portion of incentives depends on the overall performance of the bank. If JYSKE bank’s performances are growing, then the portion of incentives are increasing. Thus employees are getting more motivation to perform with customer satisfaction.

           ## JYSKE bank is committed to both customers and their valuable employees. The promises those they are making are being fulfilled for sure. Also JYSKE bank is investing more in employees, system and infrastructure to be the top one in Scandinavian banking market.

Conclusion

At last after studying the case and I can say that, JYSKE bank’s present competitive market positioning is pretty right and it is going well. But beside that it must handle daily customer encounters properly and if any failure occurred then JYSKE must fulfill service recovery expectations of each customer by following service recovery strategies properly.

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