Competitive Advantages in Banking Sector of Mauritius

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Table of Contents

Introduction……………………………………………………………………………………………………………………………………………2 Main objectives of study………………………………………………………………………………………………………………………………………..2 Overview of the Banking Sector3
Competitive Advantage………………………………………………………………………………………………………………………….. 4 Michael Porter: Guru of Competitive Advantage…………………………………………………………………..……............................... 4 How do banks benefit from competitive advantage………………………………………………………………………………..8 Company Profile – Mauritius Commercial Bank…………………………………………………………………………………....10 Competitive Advantages of MCB………………………………………………………………………………………………………..................10 Continuous investment and innovation to secure sustainable competitive advantage………………………………………….11 Company profile – State Bank of Mauritius……………………………………………………………………………………......... 13 Competitive Advantages of SBM……………………………………………………………………………………….,…………………………..15 Continuous investment and innovation to secure sustainable competitive advantage………….……………………………...17 Company profile – Barclays Bank of Mauritius……………………………………………………………………………………...19 Competitive Advantages of BBM…………………………………………………………………………………….……………………………..19 Continuous investment and innovation to secure sustainable competitive advantage………………………………………….20 Company Profile – Hongkong and Shanghai Banking Corporation………………………………………………………..21 Competitive Advantages of HSBC…………………………………………………………………………………………….…………………….21 Continuous investment and innovation to secure sustainable competitive advantage………………………………………….23 Other Competitors……………………………………………………………………………………………………………………………. ….24 Conclusion……………………………………………………………………………………………………………………………………………. 25 Overview of Part II…………………………………………………………………………………………………………………………………27 Recommendations…………………………………………………………………………………………………………………………………28 Conclusion……………………………………………………………………………………………………………………………………………..31 References……………………………………………………………………………………………………………………………………………..32

Abstract

With the increasing competition in a dynamic environment, competitive advantage can be very important to achieve better performance and better results eventually. The traditional four dimensions of competitive advantage are: Cost, Time, Quality, and Flexibility. In modern time, competitive advantage takes the form of Intellectual Property, Know How, Location, Innovation, Brand Popularity, Strategic assets, Barriers to Entry and so on. The main objective of this study is to evaluate the impact of innovation on realizing the competitive advantage in the banking sector in Mauritius. Banks should support innovation in all aspects of business and operations. In our study, we have considered four major banks that dominate the Mauritian banking sector and evaluated the competitive advantages of each one. We have further chosen one of the players and proposed on the most appropriate competitive advantage that would ensure future growth and development.

1. Introduction

The recent years have seen a new wave in the economy of Mauritius with the rapid growth of the financial services sector. Mauritius has a long tradition of commercial banking dating back to 1812 and has historically adopted a cautious attitude to banking development. The banking sector is the backbone of the financial sector, with 20 banks licensed to conduct banking business. Of these, 8 are local banks, 7 are foreign owned subsidiaries and 5 are branches of international banks. The strength of the banking sector is mainly the brand equity that Mauritius Commercial Bank (MCB), State Bank of Mauritius (SBM), Hong Kong and Shanghai Corporation (HSBC) and Barclays Bank PLC Mauritius (BBM) has created in the market and together hold about 85% of the market shares. This sector also offers scope for new markets such as Islamic banking. All these factors are rendering this sector more dynamic. Increased competition in the retail banking sector has intensified the use of Customer Relationship Management as a means of securing competitive advantage. The...
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