Commerce Bank Case Analysis

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Table of contents Executive Summary ………………………………………………………….. 3 Background ………………………………………………………………….... 3 Problem Statement ……………………………………………..…………….. 5 Analysis ……………………………………………………………………….. 5 Conclusions and Recommendations ………………………………………… 7 References …………………………………………………………………….. 8 Executive Summary In this paper I study Commerce Bank, founded in New Jersey in 1973 with a revolutionary concept for the banking industry. Commerce brought the retail experience to banking, competed on service rather rate and deposit rather than loan as main product. When Commerce felt threatened by competition catching up on offering similar or same services, they decided to implement decentralized retailtainment as their main strategy. Managers of branches were encouraged to propose ideas to entertain customers while they waited in line. In analyzing Commerce’s situation I came to the conclusion that the best option for Commerce Bank was to stop the retailtainment and invest effort and budget in improving their previous system of customer service, which had positioned them in the top of the country for many years. Background Commerce Bank was different from other banks in the industry since it was founded by Vernon Hill in 1973. The first Commerce Bank started with $1.5 million in New Jersey as a community bank. Since then it has expanded to different states including Delaware, Pennsylvania and New York. Commerce Bank do provide financial products such as loans and deposits. However, they deliver the service in a very different way than other banks. Commerce Bank’s service system was focused on customer-centric programs that were based on personal contact, longer opening times and “outgoing friendly service”(Frei, 2006 p4). The Commerce Bank branches opened from 7:30AM-8:00PM during week days and modified hours for Saturday and Sunday.

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