The strategic service vision entails four pillars, which consist of target market segment, service concept, operating strategy, and service delivery system. In essence, the pillars are utilized to improve or modify current services. The first pillar, target market segment is essentially the discovery stage. The point of this stage is to determine whom the company is serving and to whose needs their product needs to be tailored.
Some contributing factors in determining the target include demographics, psychographics, and other important characteristics. In the case of United Commercial Bank, their main target market is clear, the Chinese American community, which is focused on financial stability and soundness. The bank’s mission statement even attempts to attract customers by stating that the company’s ultimate goal is to aid families and businesses in achieving their American Dream. On the other hand, El Banco de Nuestra Communidad focuses on luring in Hispanic clients.
As stated by the company CEO, Drew Edwards, everything in the bank is designed to attract Hispanic people, from the bright colors, to the Spanish music, and comfortable ambiance. The second pillar of the service vision is the service concept, which mainly focuses on the reasons why customers would choose one product over their competition. Some competitors that UCB faces in the Asian community are East West Bancorp. Nara Bancorp, Cathay General Bancorp, and Wilshire Bancorp.
As previously mentioned, the Chinese American community is very focused on financial stability. In order to defeat their competition, the UCB attempts to meet their standards by offering savings accounts and CDs with high rates, attractive business loans for real estate transactions, and features to facilitate import and export businesses, which are common among Asian Americans, and low and sometimes refundable bank fee that keep the customers coming back. On the contrary, El Banco relies on bank transaction fees as a source of revenue.
By comparing themselves to Western Union, El Banco attracts customers to come to their bank and cash checks in their establishment even if they do not have an account with them. By charging people with a 1. 5% cashing fee, El Banco makes a third of their revenue. In addition, once they have the customer, they are able to offer more features such as a mortgage for undocumented workers, based on their taxpayer identification, credit cards, financing, and savings accounts. The third pillar is the operating strategy. This factor focuses on the structure and order of the company.
The United Commercial Bank is strategically located in predominantly Chinese American neighborhoods, as well as Hong Kong, Taiwan, and China. By employing Chinese speaking employees, UCB is able to maintain a strong flow of business and communication with their customers. In addition, whenever a client opens either a checking or savings account, they are rewarded with a tea caddy or gift tea sets to further accentuate the culture. On the other hand, although El Banco is located only in Georgia, they do employ a similar strategy in terms of structure.
They too are culturally homogenous, by focusing on their Hispanic constituents and employing Spanish speaking workers. Two vast differences in their structure is that El Banco is informal in their overall appearance and their business structure is a franchise company. Lastly, the fourth pillar is service delivery system. This pillar oversees that the operating strategy is in fact being fulfilled. The way the United Commercial Bank goes about delivering their service is, once again by employing Chinese speaking employees and emphasizing the Chinese culture and beliefs.
By providing the clients with safe but valuable assets, UCB is able to match up to their competitors and fulfill their business model. El Banco also utilizes culture to achieve their business goals. By decorating their establishment with bright colors, Spanish music, comfortable seating, a play for children, snacks, Spanish-language newspapers, phones, and e-mail stations, the banking is showing how dedicated they are to their constituents and is effectively giving them what they desire.
Question 2: Identify the service winners, qualifiers and service losers for United Commercial Bank and El Banco. In order for a bank to be successful they have to follow a certain criteria in order to be able to draw in customers. These criteria are known as service qualifiers and there are found in both examples. Some of the service qualifiers for United Commercial bank are, its high asset amount, and safety. United Commercial bank has an asset account of 6. 2 billion dollars, this is a necessity that this bank has succeeded on because, it gives the bank a foundation to make more transactions, and the ability to back up current customers, and pave the way for new ones. Another service qualifier that United Commercial Bank has is its safety of its savings and CD accounts. By issuing high interest rates it makes the accounts more secure, and a more secure bank is a more respectable and a higher used business. El Blanco also has a few unique service qualifiers that also put them in the bank market.
One of them is that they are very informational and are always available to answer customers’ questions about the bank, which is good for when their policies need to be explained. Another service quality that they have is the ability to transfer money to another country. Based on their location, and the habits of the people in it, transferring money is the best way for them to make a profit. Service winner and loser qualities are what give the business the advantage, or disadvantage, over the others to stay strong in the market.
One trait that both United Commercial and El Banco both have is that they have personalized their bank to the community around them. United Commercial Bank leans more toward the Asian community, and El Blanco toward the Hispanic community. This can be looked at both as a service winner, and loser since it keeps and attracts customers from that culture but at the same time can block customers from other cultures from entering. Especially El Blanco, since in the passage it states “the atmosphere is set for Hispanics with Latino music and pictures”.
It transformed the way their business works too. Since the Asian community is larger, United Commercial focuses more on advancing and giving loans to business, while El Banco, since the Hispanic community is less wealthy, focuses on day to day transactions, like charging check cashing fees and wiring money to other places. United Commercial’s unique service winners are that there are many locations, making it easier for a new customer to find one of their banks, and offer many different types of services, like savings checking, CD’s.
This high variety will always look attractive to possible employees. Their Service losers are that the interest rates are very high, making the bank more secure, some customers might not have the capital to join these types of accounts. El Banco’s unique service winners are that its bank is friendlier to those customers with a low income. However their lack of locations, and amount of services offered to customers may harm them when trying to gain new ones. At the end of the text it says they are competing to try to add these services to their list.
Question 3: What are the differentiating features of banks that target ethnic communities? Differentiation entails serving a broad market, but having key factor in your company, which make it seem unique. The differentiating features of banks that target their ethnic communities include customizing the standard product, controlling the quality, and making the intangible tangible. Customizing the standard product requires the bank to tailor their service closely to the needs of the customers. United Commercial Bank does this by charging lower account fees than other banks.
It collects fee income equal to . 32% of assets, down from the average 1. 7% of typical banks. El Banco offers some mortgage financing to illegal aliens. They also offer international fund transfers (like Western Union). El Banco also based their mortgage applications on the Individual Taxpayer’s Identification Numbers, resulting in a higher mortgage rate (8. 0% – 9. 5%) up from 4. 86% in Georgia , according to Bankrate. com. Controlling the quality of a product or service is done by influencing the customers’ expectations and experiences.
United Commercial Bank is known for employing numerous Chinese speaking tellers. Many clients that use UCB speak only Chinese. El Banco also established an environment to make Hispanics feel at home. They have Spanish newspapers, Latin music playing, and most of all Spanish speaking employees. Lastly, making the intangible tangible is done by allowing the client to take a piece of their banking experience home with them. In South Asia, United Commercial bank gives their clients either a tea caddy or a gift tea set for opening up a new savings or checking account