Case Action Plan

Students Name Students Number 25th May 2012 Riverside credit union must maintain its members in the face of stiff competition in the market. They are the source of all their revenue and, loosing any means loss in business and, profitability. The strategy they adopt for the protection of their market share will count a great deal. The management of the credit union should concentrate on the membership segment that brings them most revenue. The main source of revenue is definitely the products the union has in the market. The members with an average of two products form this segment. They should resolve to do this because under exhibit 2, segments 6 and, 7 have 30, 0000 members whose accounts have low transactions and, others are totally inactive. These inactive members make the union incur heavy maintenance costs on their accounts. They should be encouraged to take more products and, those found to be unresponsive have their accounts closed. After the management does this, they should increase the number of products available to the remaining members. This will maximize returns from the active segments of the membership. They can aim at pushing the average product per member from two to three. This can be possible since most of the remaining customers are already used to taking these products. Furthermore, the union will have more capital to carry out these programs. This capital will come from the savings made on the closure of low activity accounts. The union will be able to come up with custom made products for their remaining members. This will increase the profitability of the union since the profits earned from each member will increase and, the costs of maintaining their accounts will be low. This action would be better than retaining all these member segments. This is because major contributors to the profitability of the union are those with more than two products. This is where the union has competitive advantage. Majority in these segments are the employed and, business people. For the union to retain these customers, it must invest a lot of capital in order to offer more customer friendly products. This capital can be generated within from the closure of the inactive and, low balance accounts. After this, the union should introduce a policy on the average number of products and, minimum balance new members should have. This will ensure generation of more revenue and, increase in profits per member to the union. The union will be able to aggressiv...