Strategy

Universal Banks: The need for corporate renewal

Print Share
In the past 10 years, many universal banks ?i.e., large, diversified banking groups? have experienced a dramatic decline in economic performance in many industrial countries. Some authors attribute this fall to the lack of focus of universal banks and have proposed alternatives such as the concept of «core banking» or «the functional approach». In this paper we argue that these proposals are useful but incomplete: universal banks have to consider all the elements of corporate strategy, just like any other diversified company, including the positioning of each business unit in its market, the development of basic capabilities that will allow those units to differentiate themselves from competitors and sustain a competitive advantage, the relationship between each unit and the corporate center, and the organizational structure that will support the universal bank.
Bibliographic citation: Canals, Jordi, "Universal Banks: The need for corporate renewal", IESE, DI-321-E, 07/1996
Date: 07/1996
Author(s): Canals, Jordi
Document type: Working Paper
Sector: Commercial and saving banks
Languages: English
Company(ies): Crédit Lyonnais, Deutsche Bank, Dresdner Bank, Banesto, Natwest, ABN-Amro, Bank of Spain, Bank of America, Barclays, Citicorp, Kleinwort Benson