Product details

Japan Net Bank (JNB), Japan''s first Internet bank without physical branches, began operation in October 2000. It attracted mainly young customers looking for convenient, round-the-clock bank services with much more competitive interest rates and transaction charges than traditional Japanese banks. Its access channels included the mobile Internet service i-mode and fixed-line Internet. JNB relied on flexible, open computer systems and a small, young workforce to minimise operation cost. Its shareholders, including parent company Sumitomo Mitsui Banking Corporation (SMBC) as well as NTT DoCoMo (provider of i-mode), were all big companies from different industry sectors. By April 2001 JNB had 130, 000 customers. But it needed to resolve a number of issues before being able to achieve long-term success in the face of strong competition from bricks-and-mortar banks and new Internet-only banks. One of those issues was about how to meet with wide fluctuations in usage without over- investing; the other was alliance management, ie, how to co-operate with alliance partners to achieve competitive advantage. This case is designed to help students assess the competitiveness of an Internet-only model of retail banking in Japan, study the business potential of alliances, and develop strategies for efficient co-operation. It could also help students understand that e-commerce ventures are particularly prone to bursts in demand, and therefore need to develop solutions that could balance investment on IT and the scalability of IT systems. The case was used in the 2002 Concordia MBA Case Competition.