Reference no: EM132222359

Schoonover Bank and Trust, Inc., located in Cape Town, South Africa, has recently installed automated teller machines (ATMs) at several locations in its marketing area. Response to the machines has been weaker than anticipated. Schoonover had hoped to use the computerized tellers to take the pressure off many of their branch banks, which have been experiencing an overload at peak times. The lines of customers have exceeded the desired maximum on many occasions, and service times have been excessive. Bank management likes to see 10 or fewer customers waiting at a branch and prefers that service time, including the time in line, to be no more than 12 minutes for “most” customers. Bank management has defined “most” to mean that 95 percent of the customers will spend 12 minutes or less in line and being served. In addition to improved service and reduced investment. ATMs generally reduce the cost of processing transactions. ?Steve Hogan, the operations manager for Schoonover is struggling with the decision to retreat from the ATMs and concentrate efforts to expand branch bank capacity. He knows that expanding branch banking capacity is far more expensive than installing ATMs. He has asked your help in doing an analysis for this problem. Specifically, Steve wants to know the answers to the following questiions:

(a) What are the strategic and operational implications of retreating from ATMs? How will the competition view such a retreat?

(b) How will this decision impact Schoonover’s plans to automate other services and eventually to offer banking from home via personal computers?

(c) Assuming Schoonover decides to continue with ATMs, what should be done to increase customer use? Do not limit the discussion to operating issues.