Strategy war games: how business can outperform the competition

2018 ◽  
Vol 39 (6) ◽  
pp. 3-12 ◽  
Author(s):  
Jason West ◽  
Maiko Chu ◽  
Lincoln Crooks ◽  
Matthew Bradley-Ho
Keyword(s):  
Financial Services ◽  
Business Strategy ◽  
Joint Venture ◽  
Corporate Strategy ◽  
Insurance Company ◽  
Content Type ◽  
External Threats ◽  
Internal Capabilities ◽  
Banking Institution ◽  
The Impact

PurposeBusiness wargames represent an alternative approach to challenge organisations to uncover internal capabilities through competitive actions designed to counteract external threats and address strategic mismatches. Internal capabilities uncovered as a result of actions taken during a competitive wargame aims to replicate market conditions found in competitive industries. These outcomes are difficult to achieve using many popular strategy design methods. The purpose of this study is to examine the use of war game-style activities in formulating corporate strategy that incorporate the natural behaviors of the leadership team in creating strategic plans.Design/methodology/approachUsing a case study from the banc assurance industry, the authors review a wargame process composed of two competing teams; the banc assurance organisation and an unincorporated joint venture between a banking institution and an insurance company. The goal of each entity was to develop strategy to improve both customer satisfaction and market share at the expense of each other given a finite set of resources. Success was judged using a simple set of metrics defined by both a consumer team and an independent umpire.FindingsConsumers of financial services are price sensitive and highly brand loyal. Unwillingness to switch brands to a prevailing competitor or other emerging (Fintech) institution persists to a threshold of a price and/or value differential of 15 to 20 per cent. The results highlight potential deficiencies in the proposed banc assurance strategy through the observation of customer behaviours and inefficient resource use.Originality/valueThe wargame approach conducted in a realistic landscape revealed internal capabilities not otherwise evident. The impact of authentic human behaviours in setting business strategy was captured which is very difficult to replicate using more formal scenario analysis and planning.

The impact of business strategy on corporate cash policy

2020 ◽  
Vol 21 (4) ◽  
pp. 677-699
Author(s):  
Efstathios Magerakis ◽  
Dimitris Tzelepis
Keyword(s):  
Business Strategy ◽  
Firm Value ◽  
Corporate Strategy ◽  
Cash Holdings ◽  
Market Value ◽  
Theoretical Background ◽  
Empirical Literature ◽  
Content Type ◽  
The Impact ◽  
The Relationship

PurposeThe purpose of this study is to explore the association between cash holdings and business strategy for nonfinancial and nonutility US firms over the period from 1970 to 2016.Design/methodology/approachThe authors have used Miles and Snow's (1978, 2003) theoretical background and followed Bentley et al. (2013) to construct a strategy index. Thus, the authors have distinguished two extreme corporate strategies, prospectors and defenders, based on a firm's resource allocation and investment behavior patterns. Following the methodology of Bates et al. (2009), the authors have used the multiple regression analysis to explore the relationship between business strategy and corporate cash holdings.FindingsThe empirical results show that business strategy is positively related to cash holdings. Prospectors are more likely to hold higher cash levels than defenders. Furthermore, the authors have found that cash holding's speed of adjustment (SOA) is slower for prospectors than for defenders, suggesting that business strategy influences cash holding's trend. Interestingly, the results show that the market value of cash increases significantly only for the firms that pursue a defender strategy.Research limitations/implicationsThe results of this work have valuable implications for researchers, by unveiling the relationship between corporate strategy and firm's cash holdings. This study, however, is limited to a sample of US firms; empirical evidence based on international samples of firms would add value to the current literature.Practical implicationsThe findings could be useful to financial managers and investment strategists, who seek to maximize firm value through the adoption of an effective liquidity policy. What is more, this study provides support for the view that strategic choice and optimal cash management are of great importance for firms' market value.Originality/valueThis study enriches the knowledge of business strategy's impact on financing policy of firms and contributes to the empirical literature of cash holdings' determinants. In addition, it complements previous studies on US firms by documenting the effect of business strategy on the SOA in cash holdings and firm value.

The impact of strategic consistency on market share and ROA

2014 ◽  
Vol 32 (3) ◽  
pp. 176-193 ◽  
Author(s):  
Larry P. Pleshko ◽  
Richard A. Heiens ◽  
Plamen Peev
Keyword(s):  
Marketing Strategy ◽  
Market Share ◽  
Financial Services ◽  
Corporate Strategy ◽  
Credit Unions ◽  
Credit Union ◽  
Theory Approach ◽  
Aggressive Approach ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to take a contingency theory approach to examine how performance is affected by the relationships between the Miles & Snow strategic groupings and a variety of marketing strategy concepts, including a firm's service focus, service growth, market coverage, marketing initiative, market growth, Porter strategy, and market orientation. Design/methodology/approach – Data for the study were gathered from a statewide survey among 125 chief executives of credit unions belonging to the Florida Credit Union League (FCUL). ROA figures were derived from government-mandated accounting reports in the state of Florida. ANOVA and correlation analysis were employed to analyze data. Findings – This study shows that firms that match an aggressive Miles and Snow profile with a more aggressive approach to seven other strategy dimensions often enjoy higher market share relative to credit unions characterized by a different alignment of the various aspects of marketing strategy. The results also suggest that achieving such a fit is not relevant to maximizing a firm's ROA. Research limitations/implications – The research sample was biased toward medium to larger firms that may possess strategic resources superior to those of the smaller firms in the industry. Also, credit unions may tend to have somewhat less aggressive profit objectives compared to other institutions in the banking industry. Practical implications – The findings outline to financial services executives the benefits of considering all dimensions of corporate strategy simultaneously, rather than one at a time. Originality/value – The paper illustrates how aligning certain aspects of marketing strategy can boost particular performance indicators and provides insight as to what the most appropriate alignments are depending on the circumstances.

Intertwining CSR with strategy – the way ahead

2014 ◽  
Vol 14 (2) ◽  
pp. 211-219 ◽  
Author(s):  
Shital Jhunjhunwala
Keyword(s):  
Business Strategy ◽  
Design Methodology ◽  
Business Models ◽  
Corporate Strategy ◽  
Sustainable Business ◽  
Socially Responsible ◽  
Content Type ◽  
Sustainable Business Models ◽  
Corporate Social

Purpose – The purpose of this paper is to emphasize the importance and means of making corporate social responsibility (CSR) an integral part of corporate strategy with the help of case studies. Design/methodology/approach – The article explores the transformation of business from being egocentric to socially responsible. With the use of examples it demonstrates how integrating CSR into strategy can create sustainable business models. Findings – Firms need to develop a framework for integrating CSR into their business strategy for long term successful survival. Social implications – Corporates and society are intertwined and mutually dependent. Business cannot survive without society's acquiescence nor succeed without its active support. Originality/value – The article explains the benefits of CSR and how to make it an integral part of business strategy to gain a competitive advantage.

scholarly journals How customers’ offline experience affects the adoption of online banking

2016 ◽  
Vol 26 (5) ◽  
pp. 1072-1092 ◽  
Author(s):  
Antonia Estrella-Ramon ◽  
Manuel Sánchez-Pérez ◽  
Gilbert Swinnen
Keyword(s):  
Technology Acceptance ◽  
Diffusion Of Innovation ◽  
Financial Services ◽  
New Technologies ◽  
Online Banking ◽  
Adoption Process ◽  
Content Type ◽  
Parametric Survival Model ◽  
Self Service Technology ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of customers’ offline transaction behaviour in the form of loyalty and cross-buying on the adoption of self-service technology innovations by non-business customers in the context of online banking. Design/methodology/approach This study extends the Diffusion of Innovation Theory, as well as the Technology Acceptance Model adapted to describe and model individual customer observed behaviours in the pre-adoption stage of the adoption process. The Log-logistic parametric survival model is applied using panel data for 1,357 randomly selected new customers from a bank. Findings Significant differences arise among customers’ behaviours related to periodicity of interactions with the bank and quantity of products involved in the interactions, as well as convenience and risk of the interactions. The results corroborate that those customers who are more likely to adopt the online banking faster show an offline behavioural pattern more related to higher periodicity of interactions and convenience, rather than a high number of products involved in their interactions, the use of high-risk products or the maintenance of a higher average monthly liabilities. Originality/value While previous research explaining the process of adoption of the online channel has mainly focused on the analysis of customers’ attitudes (i.e. customers’ perceptions) and demographics, in this research an additional explanation is proposed using customers’ offline transaction behaviours. In addition, there is a considerable amount of research about the adoption of new technologies, but there is a scarcity of studies looking specifically at the financial services and banking industry.

FIFA – highlighting the links between global banking and international money laundering

2018 ◽  
Vol 21 (4) ◽  
pp. 498-512 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Banking Sector ◽  
Due Diligence ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Global Banking ◽  
Beneficial Ownership ◽  
The Impact

PurposeThis paper uses the recent (August 2015) FIFA arrests to provide an example of how illicit financial flows are occurring through the formal banking and financial services sector. The purpose of this paper is to explore which elements of anti-money laundering (AML) compliance need to be addressed to strengthen the banking response and reduce the impact of IFFs within the banking sector.Design/methodology/approachThe paper is based on the indictment document currently prepared for the FIFA arrests and the District Court case of Chuck Blazer the FIFA Whistleblower. It uses the banking examples identified in the indictment as typologies of money laundering and wire fraud. Corresponding industry reports on AML compliance are included to determine where the major weaknesses and gaps are across the financial service.FindingsThe main findings from the analysis are that banks still have weak areas within AML compliance. Even recognised red flag areas such as off shore havens, large wire transfers and front companies are still being used. The largest gaps still appear to be due diligence and beneficial ownership information.Research limitations/implicationsThe research topic is very new and emerging topic; therefore, analysis papers and other academic writing on this topic are limited.Practical implicationsThe research paper has identified a number of implications for the banking sector, addressing AML deficiencies, especially the need to consider the source of funds and the need for further enhanced due diligence systems for politically exposed and influential people and the importance of beneficial ownership information.Social implicationsThis paper has implications for the international development and the global banking sector. It will also influence approaches to AML regulation, risk assessment and audit within the broader financial services sector.Originality/valueThe originality of this paper is the link between the emerging issues associated with allegations of bribery and corruption within FIFA and the illicit financial flow implications across the banking sector.

Lord John Browne: beyond CSR – why business needs to engage more radically with society

2016 ◽  
Vol 44 (4) ◽  
pp. 32-40
Author(s):  
Brian Leavy
Keyword(s):  
Social Responsibility ◽  
Business Strategy ◽  
Corporate Strategy ◽  
Chief Executive ◽  
Business Leaders ◽  
Lead Author ◽  
British Petroleum ◽  
Content Type ◽  
Core Business ◽  
Corporate Social

Purpose This interview with petroleum executive John Browne, lead author of Connect: How Companies Succeed by Engaging Radically with Society, discusses sustainability practices that could be more successful than those of the Corporate Social Responsibility (CSR) movement. Design/methodology/approach Lord Browne, a British peer, was CEO of BP (British Petroleum) from 1995 to 2007 and is currently executive chairman of L1 Energy, He was interviewed by Prof. Brian Leavy, an S&L contributing editor Findings Connected leadership means integrating societal and environmental considerations into core business strategy at every level of the company. Practical implications The key lesson for business leaders in the wake of …accidents and scandals is that reputation is an outcome of your core business activity, not something constructed alongside it. Social implications Shareholder value, as a theory, presents a false tension between serving stakeholders and shareholders. Originality/value Browne was the first Big Oil chief executive to acknowledge the link between man-made carbon emissions and global warming. His insights into integrating social responsibility and corporate strategy are cutting edge.

scholarly journals The impact of strategic transformation on employee productivity

2018 ◽  
Vol 17 (1) ◽  
pp. 55-57 ◽  
Author(s):  
John J. Oliver
Keyword(s):  
Longitudinal Analysis ◽  
Corporate Strategy ◽  
Employee Performance ◽  
Performance Outcomes ◽  
Employee Productivity ◽  
Operating Environment ◽  
Content Type ◽  
Operating Income ◽  
The Impact ◽  
Strategic Transformation

Purpose The purpose of this paper is to provide a strategic commentary on the interconnected areas of corporate strategy and employee performance by illustrating how two organizations adapted and transformed their businesses to the demands of digitalization and new media. Design/methodology/approach A longitudinal analysis (1995-2015) of employee productivity was calculated as operating income per employee for each firm and benchmarked against industry data. Findings Both firm’s corporate objectives and strategies were focused on ambitious levels of growth and the opportunities provided by an increasingly digital environment. However, the firms had transformed their businesses in different ways with distinct employee productivity performance outcomes. Practical implications This paper provides case studies of strategic transformation and argues that HR management strategies and practices need to be continually evaluated to assess their employee productivity in an uncertain digital operating environment. Originality/value This paper provides a longitudinal analysis of how media firms, Sky Plc and Pearson Plc, adapted, reconfigured and transformed their businesses to meet the demands of an operating environment characterized by inexorable changes in digital technologies. It presents data and conclusions on how the management of “human resources” had delivered different employee productivity outcomes over the long term.

US SEC approves sweeping amendments to rules governing money market funds

2015 ◽  
Vol 16 (1) ◽  
pp. 25-39
Author(s):  
Jack Murphy ◽  
Stephen Cohen ◽  
Brenden Carroll ◽  
Aline A. Smith ◽  
Matthew Virag ◽  
...  
Keyword(s):  
Financial Services ◽  
Boards Of Directors ◽  
Financial Stability ◽  
Money Market ◽  
Content Type ◽  
Fund Managers ◽  
Money Market Funds ◽  
The Usa ◽  
To Come ◽  
The Impact

Purpose – To explain the background and details and to discuss the implications of the USA Securities and Exchange Commission’s (SEC’s) July 23, 2014 amendments to Rule 2a-7 and other rules that govern money market funds under the Investment Company Act of 1940. Design/methodology/approach – Explains the background, including problems during the financial crisis, the USA Treasury’s temporary guarantee program in 2008, earlier SEC proposals, and the USA Financial Stability Oversight Council’s recommendations. Details the amendments to Rule 2a-7, including the authorization to impose liquidity fees and redemption gates, the floating net asset value (NAV) requirement, the impact of the amendments on unregistered money funds operating under Rule 12d1-1, guidance on fund valuation methods, disclosure requirements, requirements for money fund portfolios to be diversified as to issuers of securities and guarantors, stress testing requirements, and compliance dates. Findings – The Amendments set forth sweeping changes to money fund regulation and will have a profound effect on the money fund industry. Although the most significant provisions of the Amendments – the floating NAV requirement and the imposition of liquidity fees and redemption gates – will not go into effect for two years, the changes to the industry will be apparent almost immediately. Practical implications – Money fund managers and boards of directors should begin assessing the potential impact of the Amendments and develop a schedule to come into compliance. Originality/value – Practical guidance from experienced financial services lawyers.

Online Community Value Co-creation

2020 ◽  
Vol 44 (3) ◽  
pp. 645-669
Author(s):  
Haili Pan
Keyword(s):  
Value Creation ◽  
Online Communities ◽  
Online Community ◽  
Corporate Strategy ◽  
Social Strategies ◽  
Electronic Communications ◽  
Content Type ◽  
Economic Strategies ◽  
Interaction Strategy ◽  
The Impact

PurposeMany companies strengthen their interaction with consumers by establishing online communities and bring convenience to value co-creation with consumers. Some companies use economic and social strategies to stimulate consumer value creation. However, the way to increase the effectiveness of such corporate strategies remains unclear. To address this challenge, this study investigates the impact patterns of economic and social strategies that influence consumers' value co-creation behaviour in firm-hosted online communities (FOCs). Moreover, the effective conditions for the value co-creation of the two strategies are explored.Design/methodology/approachData from an FOC were collected for electronic communications products. A total of 1,305 second-hand data records on value co-creation activities were obtained. Then, an econometric model was built and Stata14.0 software was used for data analysis.FindingsThe effect of economic interaction strategy on the value co-creation in online communities is an inverted U-shaped model, and that of social interaction strategy is relatively stable and is not an inverted U-shaped model. Value creation initiatives introduced by enterprise personnel adopt economic strategies to improve effectiveness. On the contrary, value co-creation activities initiated by consumers use social strategies for the same purpose. Economic strategies are effective for large teams, whereas social strategies may lead to a “free rider” mentality.Research limitations/implicationsThis study finds two important factors affecting the value co-creation in FOCs and their effective boundaries. However, other factors may also affect the online community value co-creation. Future research can further explore the intrinsic mechanisms of these strategies for value co-creation.Practical implicationsThis article mainly discusses the influence of stimulation strategies on the value co-creation in an actual company community and exhibits good practical significance for the value co-creation activity and management in online communities. Firstly, corporate strategy is effective in communities, but this strategy requires proper control. Secondly, the company strategy must consider appropriate application conditions.Originality/valueThis study deepens the understanding of the impact of economic and social strategies on the value co-creation in FOCs and the effective boundaries of these impact patterns.

The impact of affective orientation on bank preference as moderated by cognitive load and brand story style

2019 ◽  
Vol 37 (5) ◽  
pp. 1334-1349
Author(s):  
Danny Tengti Kao ◽  
Pei-Hsun Wu
Keyword(s):  
Cognitive Load ◽  
Financial Services ◽  
Brand Preference ◽  
Content Type ◽  
Segmentation Strategy ◽  
Orientation Scale ◽  
Bank Marketing ◽  
The Impact ◽  
Affective Orientation ◽  
Brand Preferences

Purpose The competition among banks in Taiwan is fierce. The financial services offered by banks are highly similar and banks attempt to devise a variety of marketing campaigns to gain brand preferences of bank clients. However, little research regarding bank marketing has applied the segmentation strategy to precisely target bank clients. The purpose of this paper is to explore the moderating roles of cognitive load and brand story style in the impact of bank clients’ affective orientation on brand preference of bank clients. Design/methodology/approach A total of 216 participants who have bank accounts in Taiwan were randomly assigned to a 2 (brand story style: underdog vs top dog) × 2 (cognitive load: low vs high) factorial design. An ANOVA was conducted to examine the interaction effects of affective orientation, cognitive load and brand story style on the brand preference of bank clients. Affective orientation of participants was measured by Affective Orientation Scale. Findings Results demonstrate that for bank clients with low and high affective orientation, advertisements characterized by cognitive load (low vs high) and brand story style (underdog vs top dog) will elicit differential brand preferences of bank clients. Originality/value This is the first research to examine the moderating effects of bank clients’ affective orientation, cognitive load and brand story style on brand preferences of bank clients. Specifically, this research takes up the call to apply bank clients’ personality traits to examine the impact of bank marketing on brand preferences of banks.

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