Paper Summary:

The purpose of this writing is to critically analyze the Community Bank Model in terms of the service product, markets, service quality and provider capabilities, in order to complete a situation analysis. The paper analyzes the community bank in Bendigo and shows how while other banks were closing local branches and abandoning communities, Bendigo Bank identified an opportunity from this broader re-structural trend and devised the Community Bank Model. The paper provides a brief background on the banking industry in Australia and then looks at how the Bendigo bank structured and strategised to succeed for its customer base.

From the Paper:

"As part of the deregulation of the banking industry that took place during the 1980's, building societies came under greater competitive pressure and many, including then Bendigo Building Society, became a bank (Viney, p100, 2000). In 1998, Bendigo Bank introduced their Community Bank model, which could be said to reflect their previous "friendly" building society image. The Community Bank model was mainly a response to the closing of 2030 bank branches across Australia (Wilmot, 2002). The model is based on a franchise-type arrangement. The arrangement is that Bendigo Bank provides capital, technology, training, and continuing support (Borham, 2000). The local community, consisting of individuals and small business operators, is required to contribute equity capital of about $350,000 to establish the community branch."

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