A Study On Corporate Competitive Advantage Based On Customer Equity

Businesses increasingly identify the key role of customers in their networks of the value chains. Under super competition environment, in order to enhance its competitive advantages, the business emphasizes the recognition of the high value customer and increasing customer lifetime value. Starting from the concept of customer equity, this dissertation theoretically analyses the interaction between customer equity and competitive advantages of enterprises. The dissertation argues different paths of customer equity to influence competitive advantage based on the“Dual Driving Force Fitness Path”model. It also states the impacts of various qualities of customer equity to competitive advantages based on the "Three Dimensions Customer Assets Quality Matrix". Based on above theoretical analysis, the dissertation empirically studies customer equity that affects Chinese brokerage firms. At last, this dissertation tries to put forward a strategic design of strengthening competitive advantage based on the customer equity. This dissertation is divided into seven chapters.Chapter 1 is the briefing of the background, significance, main content, framework, novelty views and research methods of the dissertation.In Chapter 2 relevant literature is reviewed. The classical competitive advantage theory and customer asset theory are summarized. The traditional theories of competitive advantage are categorized as exogenous and endogenous ones. Relevant theories based on the assumption of noclassical economics, competition strategy theory, resource based theory, core competence and knowledge based theory are commented. Chapter 2 reviews the customer asset theory from its background, evolution to its present focus. The Definition, connotation, driving factors, measurement, customer lifetime value, interaction with competitive advantage, enterprise strategy implementation model with customer assest as the core are summarized. Related researches of the topic are evaluated.Chapter 3 is a relevancy analysis of customer asset and enterprise competitive advantage. Firstly, it states customer asset in the view of strategic assets, and sums up the characteristics of customer asset as a kind of strategic resource. Secondly, this chapter verifies the argument that customer asset is the external resource for enterprise competitive advantage, while customer asset management ability is one of the core competence of enterprise. It points out that the customer assets view is a derivative of classical competitive advantage theory. Finally, it summarizes the importance of integrating customer asset into the process of building competitive advantage since the customer asset is the key to construct core competence and the effective criteria to forecast the future development trend of the enterprise.Chapter 4 analyzes the path and the impact of customer asset on enterprise competitive advantages. In this chapter,“Dual Driving Force Fitness Path”is constructed as a novelty. It explains the ways of customer asset influencing competitive advantage of enterprises through the fitness of "Driving Factors Path" and "Service Profit Chain Path". It also analyzes the impacts of path "potential breakpoint" and "fit" as well as the customer’s acceptable "tolerate interval" to customer asset accumulation and competitive advantages of enterprises. This chapter also proposes a "Three Dimensions Customer Assets Quality Matrix" from the angles of customer asset composition, customer profitability and customer loyalty. It also studies the impacts of varied customer asset quality to the breadth, depth and sustainability of enterprise competitive advantage. The limitation of the matrix application is also examined.Chapter 5 is the empirical study of impacts of customer asset to enterprise competitive advantage. This chapter constructs a conceptual model of the relation between customer asset and its driving factors and competitive advantage. Based on this model, this chapter empirically studies two brokerage firms. The finding verifies the customer asset and its driving factors and the competitive advantages are positively correlated. Data shows that different factor has differenct degree of impact to competitive advantage of two firms. The Strength and weakness of firms are also defined.Chapter 6 proposes enterprise competitive advantage improvement strategy, including customer assets maximization strategy and customer asset management optimization strategy. Customer assets maximization strategy is divided into customer segmentation obtaining strategy, value asset enhancement strategy, brand asset promotion strategy, retention asset improvement strategy, customer asset quality optimization strategy and enterprise cooperation strategy based on customer assets. Customer asset management optimization strategy requires enterprise constructs a customer asset management ability system including value creation ability, customer relationship management ability, customer knowledge management ability, customer information integration ability and customer asset centered enterprise organization structure, and customer assets oriented culture.Chapter 7 is the conclusion and limitation analysis. Customer asset is the key resource of enterprise competitive advantage. It is also a reflection of enterprise core competence. The bigger the customer asset, the higher of its quality, the stronger is the enterprise competitive advantage. Enterprise should formulate its business strategy based on the maximization of customer asset to improve its competitive advantage.