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In Taiwan, the environment of the banking industry has
dramatically changed lately as liberalization,
internationalization and information automation continue
reshaping the whole industry. Consequently many banks cannot
sustain their previous competitive advantages. Therefore it
becomes more and more important for individual banks to rethink
how to effectively lever their core competence to create their
unique competitive advantages.Our study has adopted a two-stage
design. In the first stage, we conduct the principal component
analysis to formulate an index that measures banks'' performances
aggregately. Then the 25 Taiwan domestic commercial banks are
compared with one another from 1992 to 1996 using the aggregate
index. The United World Chinese Commercial Bank has been
regarded as the most innovative and profitable domestic
commercial bank from reports both domestically and abroad. The
same ranking result is obtained in our study. In the second
stage, we further interview the top managers of the bank to
explore what and how they do to make them so outstanding.From
the in-depth interview and our empirical study, we can summarize
as follows:1. Taiwan''s domestic commercial banks compete against
one another no longer basing on their size, number of branch
office and history alone.2. A bank''s capabilities of
continuously innovating have determined whether it can sustain
its competitiveness over dynamic environmental changes. The
United World Chinese Commercial Bank has first adopted
innovative human resources management practices such as profit
sharing and job rotation which have highly motivated its
employees. Strategic and operational innovation have
successfully created effective entry barriers and enormous
profits via collaboration among different business.3. Dramatic
environmental changes caused by liberalization,
internationalization and information technology continue
reshaping many industries. The adaptation has driven Taiwan''s
domestic banks to reformulate their business strategies. The
similar adaptation process is occurring in many industries
globally such as the automobile industry, the telecommunication
industry, the information technology industry and so on. From
the findings obtained in our study we concluded a firm has to
continue creating values via innovating itself in order to
survive and prosper.
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