Bank of America- Case Study

1167 words 5 pages
Case Study Brief


The Bank of America was formed in 1998 after the merger of California based Bank of America and the Nations Bank of North Carolina. At the end of the 20th century the bank stood as the second largest bank in the American market with close to 4500 branches operating in 21 states. Most of these branches were located in high growth markets of the south and west coast. Globally, it employed 1, 40,000 employees across 190 nations, over $8 billon in revenues, $360 billion in deposits and some $600 billon in assets.

However the markets had been consolidating for sometime with the total number of banks in America having reduced to 7000 from an figure of 14000 first recorded in 1985. Intense competition
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The tellers and associates initially spent 30%-50% (later 25%) of their time training themselves for the experiments.


Overall deposit growth in the first year of operations, 2002, was 0.5% compared to 3.7 % growth in other Atlanta branches. In revenue terms the I&D branches did 10% better than traditional branches. There was a large spike in customer satisfaction and annual teller turnover fell from 50% over the past three years to 28%. The team received an additional 5 branches to manage taking the total number of branches under it to 25.

Issues/Problems faced

- Should the group function as a stand alone R&D center?
- Should the group be provided with a special budget or should its funding be linked with its performance?
- How does the prioritization of ideas to be implemented take place?
- How to make the experiments mirror real situations so that application to other branches is easy?
- How to minimize error? Repetition of Trials and Experimental controls had been used for this.
- Cycle time for experiments was right now at 90 days. Could this be reduced?
- Having only 20 branches meant tasking a single branch with multiple experiments and this meant facing difficulty in evaluating individual effects. A need to expand experimentation capacity.
- Assessing Innovation. Does one judge for innovations sake or should financial forecasts expected 2 years from launch be taken into account?


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