A Study On The Relationship Between The Competitive Strategyand Business Efficiency Of Commercial Banks

The competitive strategy is an important part of corporate strategy,which is closelyrelated to the core value of enterprise and the long-term development of enterprise. Theclear and effective competitive strategy will help enterprises to make a detailed businessplan and implement correctly.For the banking industry,as core of the financial industry,competitive strategy could not only affect their own business, but also the entirefinancial industry,even the entire economic system.So studying the relationship betweenthe competitive strategy and performance could specify the direction for enterpriseoperation and promote the healthy development of the financial sector,which hasimportant practical significance to enterprises for their long-term based on the market.Based on the previous studies, this paper will further find the effect on businessefficiency of competitive strategy from the perspective of bank’s internal operations.Itwill be more accurate and targeted because it analyze the relationship from the businesslevel.This paper collected data from42commercial banks in China from2018-2012.A system of competitive strategy was built to calculate strategy score of thesebanks.Business operation was decomposed into two stages:deposit and loan,andefficiencies of these two-stage model was evaluated by associated network DEAmethod.Based on the previous work, this study tried to test the relationship betweencompetitive strategy and business efficiencies in the simultaneous equation model, andthere was a comparison of the relationship among state banks,stock-holding banks andcity banks.The result showed that bank business has been in a high centralization butlow differentiation status.Inefficiency was general for these commercial banks.It wasalso found that low cost strategy had a positive impact on the deposit efficiency,differentiation strategy had a positive impact on the loan efficiency,and focus strategyhad a positive impact on both deposit and loan efficiencies.While there was differenceof the relationship among the three kinds of banks.