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eBank Microworld
On this page:
General information
Key learning points
On Registered Teachers page:
Information on teaching materials and reading lists
Illustrative teaching schedules
Assessing student performance
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eBank Microworld - General information
This is a small simulation, supported by a short notes on a real case.
The case plays out key features similar to the start-up of a low-cost savings
bank, Egg PLC.
Contexts where similar specific structures arise: Close
analogies arise with any service-based business that is reliant on trained
staff, e.g. on-line insurance, roadside vehicle-repair, telephone number
enquiries. More distant analogies may be relevant where ‘service demand’ arises
indirectly from the sale of physical goods that require support, such as PCs
and complex consumer electronics. In business-to-business contexts, analogies
may occur where customers require service support for popular new technology,
such as elevators.
Level of complexity: moderate
eBank Microworld - key learning points:
Generic ...
Business performance over time (sales and earnings) depends on the resources we
have.
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Resources are won and lost over time (customers = sum of all customers ever
won, minus all ever lost).
Specific to this microworld …
Need for balance between growth of ‘demand-side’ resources (savers) and
‘supply-side’ resources (the service staff who provide the capacity to deal
with the workload from savers).
Lead-time required to bringing resources into balance (the hiring and training
time). Intangible resources (reputation) can severely constrain growth of
tangible resources (savers) – it responds quickly to poor service, and slowly
to improvements.
Service demand is driven by three distinct forces – the winning of new
customers (new savers have to be processed), the ongoing support for having the
customer-base resource (regular account statements and enquiries) and the
losing of customers (processing accounts for savers who leave).
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| Exclusions:
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This simple microworld does not include rivalry.
Any real bank of this type offers loans as well as savings products. For
simplicity, this additional business is not made explicit, but features as
other, undefined income.
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| Decision inputs:
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Interest rate offered on savings
Hiring of service staff, for handling phone calls, on-line enquiries and
documents.
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Performance outputs: |
Operating profit
Savers and revenue
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| Challenges offered: |
'Go for it' – very attractive
interest rates quickly capture many savers, but building staff is too slow,
damaging service quality and reputation … how quickly can you fix this problem,
and build profitability too?
'Reactive strategy' – after the 'go for it' start, management
reacts to staff shortages only when they hit service quality, and deal with
staff excesses too slowly … can you get back to a balanced business and build
sustainable growth and profits?
'Solid start' - Management initially matches competitor
interest rates to avoid overloading service staff, and hires plenty more to
build for the future … can you keep building solid, profitable business and
keep quality high?
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| Teaching uses: |
Strategy - basics of resource-based view (RBV): connection between
resources and performance.
Systems thinking - resource-building and feedback.
Service management – basics of matching service capacity with rapidly
varying workloads driven by customer acquisition and maintenance.
Strategy Dynamics course suggested use in class 2 of full-length course
of 10 - the business resource-system, managing balance between resources
(customers and service staff).
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Download a demo or a personal licence for the eBank Microworld
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