Research On Strategic Selection Of Chinese Commercial Banks Under The Entry Of Foreign Banks

Chinese bank industry will totally open at the ending of the five years WTO transition period on December 11^th, 2006. The foreign banks will have the fully market access and the limitations on arena and customer will be totally eliminated. The foreign banks have intense competition on arena, customer, human resources and other fields with Chinese commercial banks. The four Chinese State-owned Commercial Banks except Agriculture Bank of China, Bank of China, Construction Bank of China, and Industrial and Commercial Bank of China have transformed from state-owned commercial banks into stock entities. They also cooperated with abroad investors as strategies alliance. Other Stock Commercial Banks and City Commercial Banks have also conducted business reengineering. The competitive position of China's bank industry has changed dramatically. Therefore, it is a principle question of how to select strategies.This thesis analyses the current development situation of foreign banks, the change of government supervision, strategy features, and strategy trends. We also research the impact of the entry foreign banks on Chinese Commercial Banks and the corresponding responses on strategies. After the comparison, this thesis finds the opportunities and challenges for Chinese Commercial Banks.According to the SWOT model, this thesis helps bank identifies the adaptabilities and differentiations of opportunities and threats from outside and disadvantages and advantages from inside, therefore, analyse and make decision for the current and future development statues to improve competitive capability. Further, the Michael Porter's five forces model is adopted. We conclude the strategies selections of Chinese Commercial Banks. At first, the CAP model is used to position arena, customer, and product. The principle of product and service competition is the image competition. Chinese Commercial Banks need to start from strategy, image management and service to formalize the company's culture and value. In customer relation management, they should segment customer according to customer's value and build customer database systematically. Human resource is the fortune for a company. The development and training of human resource depends on the scientific human resource development planning, systematic training and incentive mechanism. The last two strategies are finance innovation and international strategies. Bank should design new finance service products to satisfy segment customers and implement international strategies to meet the requirements of globalization.