Paper info

CUSTOMER VALUE CREATION AND CORPORATE STRATEGY IN FINANCIAL SERVICES

Bernardo Bátiz-Lazo

The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.

Customer value creation is allegedly at the centre of relationships between servicerecipients and service providers (such as financial service organisations in general, andcommercial banks in particular). This research considers the role of customer valuecreation in the strategic response of banks to external changes in their growthopportunities. The analysis established that there had been changes in the framework inwhich banks' pursued synergy since 1980 (or 1990 in Mexican and 1992 in Estonianinterviews). As a response to external change banks have created new synergies in thepursuit of greater growth and interviewees expected that changes in synergy creationshould be reflected in banks' diversification and market positioning moves. Newsynergies required new capabilities and participants from all countries agreed that thecurrent wave of change in synergy creation had carried through greater emphasis oncustomer profitability. All countries recorded a shift from a supply-oriented strategicstance to the development of skills to retain customers and even becoming a one-stopfinancial service institution for their customers. However, greater emphasis on customerprofitability was seldom followed by recognition of the key capabilities required for highcustomer value creation. This as most interviewees failed to provide an articulatedaccount of how to achieve that profitability.