Identification of Linkage Between Strategic Group and Performance of Indian Commercial Banks: A Combined Approach using DEA and Co-Plot
نویسنده
چکیده
This paper explores the linkage between strategic grouping and performance of the Indian banking sector. Strategic grouping and performance were identified using published financial information for all public sector banks. Grouping of Indian public sector banks following comparable financial strategy – with similar asset quality, operational efficiency and profitability – was operationalized using the graphical display method of Co-plot. From their position in the two dimensional conceptual map, banks with identical financial performance formed strategic groups with significant positive linkage between better groups and their superior financial performance, which showed their inherent homogeneity in business policy decisions. Relative performance of the banks in terms of their efficiency in converting the resources to financial outputs was obtained using data envelopment analysis technique. The measures for potential financial improvements were obtained from the output slacks calculated. Efficient banks were found to be more profitable and their grouping as observed in the efficiency-profitability matrix was found to be identical to the strategic groups obtained using financial ratios. This paper offers a framework to commercial banks to make informed policy decisions about their competitive positioning in the target market, develop long-term strategic focus and identify a benchmark for improving their performance.
منابع مشابه
Evaluation of Strategic Performance with Fuzzy Data Envelopment Analysis
This study intends to expand a set of proper performance evaluation indices which embraces strategies for sustaining top performance using SWOT analysis inside a balanced scorecard (BSC) outline for the large commercial bank branches in IRAN by operating a fuzzy Data Envelopment Analysis (FDEA). Through literature reviews and the banks’ experts and managers opinions and who have real practical ...
متن کاملA Co-Plot- based Efficiency Measurement to Commercial Banks
For the issue of the lack in plotting analysis method in the research of DEA, this paper introduces a new graphic method—Co-Plot. It can demonstrate DMUs and variables visually in two-dimensional space, and enable the analysis of them at the same time. By applying the ratio relationship among variables, Co-Plot can be combined with DEA in a way to display the results of DEA easily and intuitive...
متن کاملRanking of bank branches with undesirable and fuzzy data: A DEA-based approach
Banks are one of the most important financial sectors in order to the economic development of each country. Certainly, efficiency scores and ranks of banks are significant and effective aspects towards future planning. Sometimes the performance of banks must be measured in the presence of undesirable and vague factors. For these reasons in the current paper a procedure based on data envelopment...
متن کاملA DEA-TOPSIS APROACH TO ANALYZE THE FINANCIAL EFFICIENCY OF INDIAN PUBLIC SECTOR BANKS
In This paper a hybrid DEA method consisting of four phases for assigning the financial efficiency of commercial banks in India is used. This paper is based on panel data of banks for the period from 2011 to 2015. The DEA analysis based on hybrid method of DEA AND TOPSIS is used for ranking efficient Decision Making Units(DMUs) in Data Envelopment Analysis (DEA). However, since each of these me...
متن کامل