Discussion Case: Mountain Bank

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Business Strategy – Discussion Case: Mountain Bank
Strayer University
Strategic Human Resource Management – HRM 530
April 24, 2011
Grade Received: 220/240

Discuss the strategies that Mountain Bank should implement to achieve a competitive advantage in the marketplace.

At first glance, one would wonder why Mountain bank currently has fifty percent of Retail accounts within the market which are the less profitable accounts in the banking industry. Secondly one would also ask or wonder why Mountain Bank has less than 10 percent of the most profitable accounts in the market, corporate accounts. To achieve a competitive advantage Mountain Bank should implement the cost leadership strategy and the differentiation strategy. Currently Mountain Bank has a strong presence in the Retail Banking line which has proven to be the least profitable line in the industry. Their goal short term goal need to be to own a stronger presence within the more stable and profitable lines, Real Estate and Mortgage and Corporate banking. With the recent mergers and acquisitions, Mountain Bank may have the opportunity to expand and develop efficient methods that will enable them to sell its products and services at a lower price than its competitors. The decrease in the cost of its products and services will attract new customers and retain existing customers. By lowering the interest rates and cost of its products and services to a rate that smaller banks would not be able to compete with, Mountain Bank will gain the leadership of cost within the industry. The success of weeding out the competition will allow Mountain Bank to achieve its goal of obtaining a stronger presence of the most stable and profitable lines within the industry, Real Estate and Mortgage and Corporate accounts.

Currently Mountain Bank provides the same four lines of banking (retail, consumer lending, real estate and mortgage and corporate banking), products and services as other banks in the industry. Differentiating its brand would allow Mountain Bank to gain a competitive advantage above its competitors. Mountain Bank would need to offer to its customer’s different and unique products and services that are not offered by its competition. This plan should restrict competitors from entering their market, or make it difficult for them to compete with them head on. The differentiation strategy may include implementing mergers with some larger corporations to obtain exclusive contract to do business with that business. The contract could encompass corporate accounts where Mountain Bank would be the sole provider of the company’s accounts for some of their benefits packages.

Based on the universalistic approach and commitment strategy, what types of practices should a human resource professional recommend for Mountain Bank with respect to its tellers?
The tellers are the key to the success at Mountain Bank. It is important that Mountain Bank’s human resource team focus on empowering the workers and build a stronger sense of loyalty and commitment within the tellers. Because the tellers are expected to complete some of the task as customer service it is imperative that hr encompass extensive recruiting and training within their hiring process. The tellers should have more involvement with the communication with management. Tellers should be encouraged to make suggestions about their daily responsibilities, customer service, daily goals, quotas, sales projections etc. Training programs should readily be available for those who show that they are able to handle more responsibilities. Of course compensation and appraisal systems should be measured and rewarded to those who use the training effectively on the job. These practices would foster a strong sense of cooperation between management and the tellers.

Discuss the four human resource strategies (internal/cost, external cost, internal/differentiation and external/differentiation) that may be...
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