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Clarifying Your Business Model and Market Differentiation Strategy

Clarifying Your Business Model and Market Differentiation Strategy. By Tim Harrington, CPA T.E.A.M. Resources 7049 East Tanque Verde Road, PMB 136 Tucson, Arizona 85715 (800) 788-9542 Email: tharrington@forTeamResources.com. What is a Business Model?.

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Clarifying Your Business Model and Market Differentiation Strategy

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  1. Clarifying Your Business Model and Market Differentiation Strategy By Tim Harrington, CPA T.E.A.M. Resources 7049 East Tanque Verde Road, PMB 136 Tucson, Arizona 85715 (800) 788-9542 Email: tharrington@forTeamResources.com

  2. What is a Business Model? A business model is a unique strategy that produces revenue from specific sources and incurs expenses in specific ways. The revenue and cost structures will be different for each business model. Some business models are built to produce profits, some are not. Which is yours?

  3. Market Advantage Find 2 to 3 things at which you can be an expert If you are exceptionally good at 2 – 3 things: • Members will seek you out for those things • Members will forgive you for all those things you are not so good at

  4. WalMart Low cost Wide selection Few employees Home Depot Low cost Wide selection Few employees Mass market Cookie cutter service Broad distribution Nordstroms Higher prices Fine quality Customer is always right Ace Hardware Higher prices Smaller selection, but good quality Helpful, individual service Community Banks Personal service Part of community Positioning

  5. Where can we develop a Market Advantage? To be ‘Best in Class’ at something, You must be “Worst in Class’ at something else and have the stomach to do that

  6. Where can we develop a Market Advantage? • Convenient Physical Location Advantage: • The McDonalds/Commerce Bank Model • Best Price Leader: • Wal-Mart Model/ ING • Quality of Service Advantage: • Ritz-Carlton Model/USAA • Innovative Product Advantage: • Apple model • Branding/Marketing/Promotion Advantage: • Coca Cola Model/Regions Bank?

  7. Where can we develop a Market Advantage? 6? Totally Remote Model?

  8. Spread Analysis Different Business Models Avg CU MOMMs CU Low Op CU Yield 4.05 8.37 3.72 Cost of funds (0.93) (0.39) (0.97) NIM 3.12 7.98 2.75 Operating exp (3.06) (7.67) (1.48) PLL (0.49) (2.57) (0.11) Net before NII (0.43) (2.26) 1.16 Non-Interest Income 1.30 3.73 0.50 Corporate Stabilization (0.20) (0.21) (0.18) ROA 0.67 1.26 1.48 8

  9. Superior Service Examples Nordstroms Department Stores • Service to customer above all else • Hard work and individual productivity • Never being satisfied • Excellence in reputation, being part of something special

  10. Ritz-Carlton Gold Standards I build strong relationships and create Ritz-Carlton guests for life. I am always responsive to the expressed and unexpressed wishes and needs of our guests. I am empowered to create unique, memorable and personal experiences for our guests. I understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience. I own and immediately resolve guest problems. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met. I have the opportunity to continuously learn and grow. I am involved in the planning of the work that affects me. I am proud of my professional appearance, language and behavior. I protect the privacy and security of our guests, my fellow employees and the company's confidential information and assets. I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

  11. Branches Ideas of All Types

  12. “Apart from a shift completely away from high-counter transaction processing, branches must become either intimate customer engagement havens, or locations of opportunity where the branch can maximize point-of-impact.”Brett King, Author of Branch Today, Gone Tomorrow

  13. Micro Branches? Australia

  14. First Atlantic FCU 15

  15. 16

  16. 19

  17. A Gen Y branch Gen Y Account Includes special savings account that puts - some for spending - some for savings The member decides! 20

  18. 21

  19. Sales Branches? Australia

  20. New Branches? 10/21/2011 What an amazing resource for our community.I have been able to attend many events in their rooms available.The staff is always friendly and helpful, great coffee and pastries and atmosphere. I am planning on looking into the banking options for my business in the future. All banks should look at you as a new model of a way of doing business! Found on Yelp!.com 23

  21. ING Toronto

  22. New Branches? Think creatively and use disruptive innovation 25

  23. 26 dotFNB South Africa

  24. New Branches? First time home buyers class…in the lobby 27

  25. New Branches? First time home buyers class…in the lobby 28

  26. 29

  27. 30 Alta Vista Credit Union

  28. 31 dotFNB South Africa

  29. 32 dotFNB South Africa

  30. 33

  31. True on-line branch 34

  32. Tim Harrington Tim Harrington, CPA T.E.A.M. Resources 7049 E. Tanque Verde Rd. PMB 136 Tucson, Arizona 85715 (800) 788-9542 tharrington@forTeamResources.com

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