An Analysis And Assessment Of Core Competence For Our Country's Nationwide Small And Medium-sized Joint-venture Commercial Banks

As the reformation of the state-owned commercial banks and the entry of foreign banks, the nationwide small and medium-sized joint-venture commercial banks (hereinafter called joint-venture commercial banks) in our country have been challenged greatly. And it is inevitable for them to cultivate and promote their core competence at the time. However, though both theoretical and applied researches on core competence are mature, it is recent that the project was put into effect in banking industry. More and more domestic researches have turned to core competence in recent years, but most of them have focused on the state-owned commercial banks and few on the joint-venture commercial banks. In this way, the research on the topic should be extended and deepened. Then, the thesis is undertaken to analyze and assess the core competence of the joint-venture commercial banks in our country.Core competence is the continuous accumulation of an effective portfolio of knowledge and capabilities and can be regarded as a type of dynamic capability. No company can survive without its own competitive advantages in the long-term. As far as the scope of business is concerned, the joint-venture commercial banks are the same to the state-owned commercial banks, to a great extent. However, the joint-venture commercial banks are much smaller than the state-owned commercial banks. Besides, there are few differences between the two types of banks. Then, at the beginning, the thesis delivers a review of researches on core competence, including the comparison between core competence and other notions. At the same time, the thesis points out that core competence theory are of great significance in modern corporation management. Second, the thesis puts forward prior researches on how to analyze and assess commercial banks'core competence. It suggests commercial banks'core competence refer to technology and innovation, human resource, business process, organizational structure, system, strategy position, corporate culture and risk management. It also points out that the main ways to analyze and assess commercial banks'core competence, including Do Pont Analysis, Trend Analysis, Market Value Analysis, Standard & Poor's, Moody's Rating Methodology, Camels Rating System and so on. Comparing to other methods, the rating system put forward by China Merchants Bank in 2003 is appropriate for this thesis. In other words, the thesis delivers an empirical analysis of joint-venture commercial banks'core competence, on the basis of China Merchants Bank's rating system. In more detail, the rating system covers nine areas, including profit ability, asset quality, corporate governance, management quality, brands, technology and innovation, capital adequacy, business structure and liquidity. Generally, a bank with competitive advantages often behaves well in these areas. However, after the detailed analysis, it is easy to know that almost all joint-venture commercial banks do not have their own core competence. In this way, it is necessary for joint-venture commercial banks to establish their own core competence. Finally, the thesis puts forward some feasible advices on how to cultivate and improve their core competence. In a word, the thesis provides a framework of the current situation of core competence for joint-venture commercial banks.