Competitive Effects Of It Innovation On Bank Strategy, 1985-1995
AbstractThrough case study research this paper illustrates opportunities presented by IT-based technological change in British retail bank markets (1985-1995). For the managers of the Royal Bank of Scotland IT appeared to lower entry barriers, exit barriers and deliver high sustainability of competitive advantage. The strategic intent behind diversification patterns of the Royal Bank of Scotland suggested competitive considerations were at a premium because unsolicited take-over bids in the early 1980s put pressure on managers to create growth opportunities. Direct Line Insurance was a subsidiary from the Royal Bank of Scotland. Direct Line was also the first retail finance institution to establish a clear competitive advantage based on information technology. The success of Direct Line enabled an increase in the market share of British retail financial services of The Royal Bank of Scotland. Direct Line is a case of planned success that questions the extent to which banks’ competencies must change to master alternative delivery channels. The success of Direct Line also suggested more effective execution than other activities explored by managers of the Royal Bank of Scotland.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 5046.
Date of creation: Sep 2007
Date of revision:
Financial institutions; technological change; corporate strategy;
Find related papers by JEL classification:
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-30 (All new papers)
- NEP-BAN-2007-09-30 (Banking)
- NEP-COM-2007-09-30 (Industrial Competition)
- NEP-CSE-2007-09-30 (Economics of Strategic Management)
- NEP-HIS-2007-09-30 (Business, Economic & Financial History)
- NEP-INO-2007-09-30 (Innovation)
- NEP-TID-2007-09-30 (Technology & Industrial Dynamics)
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