Designing a Model for Competitive Advantage in Electronic Banking Applying Grounded Theory

  During the last decade, electronic banking systems are steadily replacing classic banking systems which have led to a major shift in the nature of business within banking systems toward electronic banking. In this regard, banks try to promote the quality of their services based on electronic banking in order to improve their competitive power in banking market and maintain their competitiveness. Due to the competitive banking market in Iran, identifying banking competitive pattern in electronic banking can lead to an improved status in their services and exchange of values to their customers. Investigating competitive patterns of an organization, one can explain why firms are different, how they work, what their strategies are, and how they are managed. Therefore, in the present study, we aim to respond to the crucial questions of “what factors are influential in obtaining competitive advantage in electronic banking and which model is more efficient to reach such a competitive advantage”. The main purpose of this study is to identify electronic banking competitive model in order to determine how one can reach competitive advantage within banking industry in Iran, a model by which one can plan for allocation of efficient resources to help improve electronic banking in a way that competitive advantage occurs through improvement in organizational functioning.

The present qualitative study uses grounded theory modeling as a systematic approach to analyze complex and multi-dimensional issues. Expert managers in banking industry were considered as the research population. Theoretical sampling was used to select the sample size. Finally, 12 experts were involved in in-depth interviews. The data were then coded and classified and main concepts and issues were extracted. Then, the existing relationships were classified in the form of a researcher-made theoretical framework. Accordingly, data analysis was conducted using three coding approaches (open, axial and selective coding).

The present study investigated the development of payment and transaction instruments as a crucial requirement for the main purpose of the study. Data analysis highlighted development of such instruments in order to obtain competitive advantage in electronic banking as a channel to provide services to the customers. To do so, software infrastructure capable of providing fast and error-free services to the customers is of high importance which has been observed in the literature. On the other hand, some studied have investigated software infrastructure to create values for the customers which is included in the present study in a more comprehensive manner. The missing point in the previous studies was the idea of independent chain of value which is particularly effective in obtaining competitive advantage in Iran. Considering banks as a holding with some sub-categories of companies that is capable of creating a chain of values in the banks can make it hard for the opponents to compete. On the other hand, the value proposed by the bank value chain, including different business expertise, increases the costs of changing the organization for the customers. Within this chain of values, IT-based firms focusing on creating independent integrated banking system and providing updated software can act as an important force in gaining competitive advantage. This can add innovation and distinctiveness in the services provided by banks. According to the literature, innovation and creativity as competitive advantages are considered as crucial requirements to obtain competitive advantage, particularly in the area of electronic banking which can increase customer attraction and improve their enthusiasm to use bank’s services. Moreover, bank’s identity is considered as an effective factor in gaining competitive advantage which was previously observed in the literature as focusing on marketing advertisement. Beside marketing advertisement, brand’s visual identity (bank name and logo) is considered as a provocative factor in attracting customers to use the bank services.

Distinctiveness and market attraction are considered as the main strategies in order to create functional agility. Based on the service-based nature of banking industry, human capital knowledge plays an important role with this regard. The crucial point is the degree of organizational relationships between banks and service providers (such as municipality, tax affairs organization, oil companies, and etc.). This will help providing exclusive electronic services for banks which in turn result in improvement of electronic banking services (as a strategic advantage for an organization). Finally, banking business lines should also be taken into account as a supplementary factor. Improving electronic banking is not possible unless banks improve their micro banking services, private and institutional services. Improving electronic banking is tied to improvement of banking services at the same time. As a result of implementing these strategies, banks can provide customers with an electronic banking market increases the profitability of the bank services and decreases the costs for the customers. Providing services through electronic banking can help banking beneficiaries gain extra values