Bank generic strategies: does Porter's theory apply in an international banking center

Ricky Yee-kwong Chan and Y. H. Wong

International Business Review, 1999, vol. 8, issue 5-6, 561-590

Abstract: This study examines banks' competitive strategies and their relationship with performance in a highly internationalized banking center, Hong Kong. The factor analysis results have, by and large, provided support to Porter's three strategy typology. Nevertheless, the empirical findings from the cluster analysis and the subsequent inter-group comparison of performances have cast doubt on Porter's stuck-in-the-middle proposition by demonstrating that banks adopting a multi-strategic approach did outperform other strategically monotonous rivals. While the stuck-in-the-middle proposition is grounded in the premise of inherent inconsistencies for pursuing more than one generic strategy simultaneously, the resource-based view and the present empirical findings hint at the feasibility for well-resourced banks to combine apparently incompatible value creating activities in a synergistic way to achieve integrated flexibility and consequently, a sustainable multi-strategic position. It is suggested that this feasibility very much depends on a bank's organizing and coordinating capabilities that are developed and refined through managerial commitment, learning and experience, as well as a careful assessment of various organizational activities and its inter-relationships within the entire business system.

Keywords: Generic; strategy; The; resource-based; view; Performance; Hong; Kong; banking; industry; Stuck-in-the-middle; Integrated; flexibility (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (2)

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