CCMA Case

1he Cooperat|ve 8ank

Group No S
AdlLl arekh 2011003
uerrlck Menezes 2011013
Parshada 8orkar 2011023
neera[ kumar Slngh 2011033
raLeek !aln 2011043
Su[eeL !og 2011033








Comment on the process used to deve|op cost and prof|tab|||ty |nformat|on on ersona|
serv|ce roducts Shou|d Coop 8ank phase out the unprof|tab|e Independent I|nanc|a|
Adv|ce]Insurance and path f|nder products?

@he CooperaLlve 8ank has used AcLlvlLy 8ased cosLlng ln Lhe followlng manner
l A crossfuncLlonal Leam across all Lhe producLs and servlces offered was formed Lo
(a) 8esource CosL ools
(b) ueflne acLlvlLy of Lhe same
(c) MaLch resource cosL Lo acLlvlLles
(d) @race sLaff cosL
(e) @lme spenL Lracked

ll
(a) ueflne cosL drlven for each producL
(b) unlL cosL of producL deLermlned
(CuanLlLy of each acLlvlLy cosL drlver of each producL) x (8aLe of each cosL drlver)
(c) Asslgnlng operaLlng cosL Lo acLlvlLles
(d) roflLablllLy CalculaLed

lll

CurrenL AccounL Lxpenses


rocesslng @ransacLlons MalnLalnlng @ransacLlons
33 43
8ase no of cusLomers 8ase no of accounLs

Low Medlum Plgh

lv
13 SusLalnlng expenses are noL allocaLed over oLher expense producLs

now shou|d the bank dea| w|th the |arge number of unprof|tab|e customers? When shou|d
unprof|tab|e customers be reta|ned and when shou|d they be "demarketed"? now shou|d
Dav|d Ia|we|| dec|de how to d|rect h|s ||m|ted market|ng resources?
@he number of LransacLlons per monLh per cusLomer ln Lhe savlngs accounL for savlngs
accounL was fewer Lhan 2 LransacLlons per quarLer Pence Lhe recovery for malnLalnlng Lhe
accounL could noL be made from LransacLlon fees Pence Lhere are 2 opLlons LlLher Lhe
bank should lncrease Lhe fees per LransacLlon or lncrease no Lhe obllgaLory mlnlmum
LransacLlons Also lf Lhere ls no LransacLlon wlLhln a cerLaln Llme perlod pre speclfled charge
should be levled on Lhe accounL holder @hls way Lhe unlnLeresLed cusLomers would
auLomaLlcally move ouL of Lhe sysLem by preferrlng noL Lo pay Lhe addlLlonal charges for Lhe
unuLlllzed servlces

3 Is the customer prof|tab|||ty and subsequent act|ons to concentrate on deve|op|ng
prof|tab|e customer re|at|onsh|ps compat|b|e or |ncons|stent w|th the bank's M|ss|on
statement (Lxh|b|t % and Statement of Lth|ca| po||cy (Lxh|b|t 3 %?

@he company Lakes lnLo accounL Lhe cusLomer feedback whlle changlng Lhe sysLem from
funcLlonallLy sysLem Lo process based sysLem Powever conLlnual feedback and revlew
sysLem ls noL esLabllshed @he employees ln lnvesLmenL and lnsurance secLlon should have
been provlded adequaLe Lralnlng @he bank's pollcy sLaLes LhaL lL ensures Lhe uLlllzaLlon of
funds ln legal acLlvlLles Powever no lnsLance/ proof whaLsoever of Lhe same ls presenLed ln
Lhe case @he bank's acLlvlLles dlsplay close cooperaLlon and afflnlLy as well as fellowshlp
beLween workers cusLomers employees and members