An excellent example of the use of a competitive force strategy by XYZ Bank, well known for their innovative services, was their pioneering introduction of ATM cards. This innovative service granted them significant competitive advantage for years as this free and unique service helped retain and expand their customer-base. Eventually, this competitive advantage began declining as their competitors also launched ATM card services, and especially when XYZ Bank initiated a monthly fee for the use of ATM cards. Interestingly, many customers continue to bank with XYZ despite the additional charge. XYZ Bank continuously launches innovative services; however, competitors very quickly counteract with similar services limiting any potential competitive advantage.
Recently, XYZ Bank introduced yet another pioneering service; namely, Electronic- Banking (EB) which allows customers to perform many common transactions from the comfort of their home personal computer. The EB service requires the use of a modem,which is common in most home personal computers. XYZ Bank provides the required EB software free of charge and the number the modem calls is a toll-free (800) number. The software is easy to install and user friendly. The main effort on behalf of the user is the initial setting up of the different payee accounts; afterwards, handling transactions with EB is so trivial that customers may hardly visit the bank again.