1. Co-operative bank is our first experience with an ABC project applied to a service organization.What new issues arise when applying ABC analysis to a service buisness?

We have already applied ABC analysis to Dakota Products which was a player in logistics and home delivery that could be clustered under the service industry head.Co-operative bank is our second experience with the ABC in services The major issues that were apparent in this case that are new are as follows:

1.1. Effects of diversifying the product portfolio:Troubles mounted as the bank could not create the capital supply due to increased capex requirements to support these diversification.Moreover at a later stage under the Project Sabre Terry indicates that the product portfolio was extensively diversified which resulted in lack of focus amongst different product and market niches.
1.2. Effects of legislation-For instance Governement legislation to deregulate the financial sector.Changing competition scenario in UK's financial services market leveraging co-perative service to transform into banks and diversify their product potfolio.
1.3. Customer Expectations:Changing customer expectations and lower switching costs can decrease the existing customer base.Thus the cost structure of the bank has to be leveraged for higher profits at the market costs.This is a perfect competetion case where the markets determine the costs(i.e. price for services) which has to be charged by the banks to sustain.
1.4. Macro-economic factors:High levels of unemployement i.e. recession had pressurised the customer base to remain dormant and thus impacted the banking institutions.
1.5. Functional restructuring:For instance the Personal Customer Service Center was formed.Thus forcing cost restructing in terms layoffs.
1.6. Cost centers:This is the first we are dealing with geographical and departmental