Abstract
How a company should compete best is central to providing a roadmap for moving the company forward. Such a roadmap is, in essence, a competitive strategy. Traditional strategy development process applies tools and concepts like mission (defining the company’s purpose), vision (inspiring future results) and value statements to guide the company’s strategy development. However, due to changes and competition, a company cannot thrive by its internal guidance. Analytical tools, such as industry trends analysis, SWOT, competitive analysis, and internal capability assessment, are used to navigate the company through the dynamic business landscape to reach a new performance plateau. These analytical tools address different angles of strategy formulation. However, a logical linkage of analysis results that shows how a company has been competing has yet to be established. Many believe that such a linkage can never be made since strategy formulation is more art than science. Under the proposed customer-driven strategy formulation, clearly articulating a roadmap for moving the entire company into the future requires management to address the four strategic elements: who are the target customers, what is the company value proposition, how will profit be made, and what will be the proper scale and scope of business operations?
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Notes
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This measure expresses, in percentage terms, the difference between the bank’s interest income on loans and investments and the cost of funds deployed to make those loans and purchase the investment.
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This measure expresses the bank’s net income as a percentage of average assets.
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This ratio expresses the percentage of a bank’s asset base that is “troubled” and expected to be written off. Generally, non-performing assets are unrecoverable and produce no revenue for the bank.
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This ratio is an indication of bank’s capital strength.
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This ratio is the best overall measure of a bank’s cost structure which is equal to Non-Interest expenses/(Taxable-equivalent net interest income + non-interest income).
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A line of credit is a loan agreement whereby the bank makes funds available to the customer up to a maximum amount which customer can use at his or her discretion over an agreed period of time.
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A revolving loan is a line of credit that allows a customer to borrow from the bank up to an established limit with a revolving credit (revolver) with a fixed maturity of up to say 3 years.
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A term loan is for a specific amount of money and a specified length of time. When the amount is disbursed, the borrower has used all the funds available under the loan.
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Discrimination analysis is a statistical analysis performed to group together a group of customers with like variables or buying value.
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A remittance is a transfer of funds by a bank on behalf of its customers. The concept of remittance deals with the way banks transfer funds to the outside world.
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Lockbox services are products of cash-management services where a bank acts as a company’s agent to directly receive and collect its incoming payments.
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Parniangtong, S. (2017). Formulating Customer-Driven Strategy. In: Competitive Advantage of Customer Centricity. Management for Professionals. Springer, Singapore. https://doi.org/10.1007/978-981-10-4442-7_5
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