Amtssparekassen Fyn A/S

Overview
Introduction of the case Discussion Discussion Discussion Discussion of of of of Question Question Question Question 1 2 3 4

Conclusion
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Introduction
19741976

Fusion of 12 saving banks on Funen Amtssparekassen Fyn A/S

Organization structure: - Merged saving banks acted as independently run businesses If you mind your own business, I will stick to mine. - Central office with little authority - No general strategy - Large degree of balkanization - Lack of central co-ordination - Lack of appropriate credit policies, clear lines of 1987- responsibility Severe financial losses, higher provisions and debts than 1988 industry average
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Introduction (cont`d)
Strategic shift

Top management team

Poul Balle Dr. Neils C. Knudsen

Advisory board
13 local managers

Impressive turnaround: new strategic direction & restoring profits

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 Political/ Legal:

Exercise 1: Do a PEST analysis at the start of the reign of Balle and Knudsen.

Deregulation of financial markets Opportunity Commercial Banks and Savings Banks Act Threat Lifting of Exchange controls for foreign banks Threat

Economical:
Expansion of retail branch networks & reduction of independent institutions (Mergers) Opportunity Economic development & inflation decreased dramatically Threat 5

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 Socio-cultural:

Exercise 1: Do a PEST analysis at the start of the reign of Balle and Knudsen.

1986: Rising unemployment Threat/Opportunity High level of education Opportunity Low power distance index by Hofstede Opportunity

Technological:
Speed of technology transfer: Increasing importance of electronic banking Threat/ Opportunity Joint computer centers 6 Opportunity

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Question 2: Is this an outside-in or inside-out case? Why?

Outside-in
Customer value as starting and end point Companys focus on creating and nurturing their customers Company put themselves in the position of their customers

Inside-out
Focus on the companys own capabilities and strengths Company takes account of its resources and aims at providing them more efficiently
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Question 3: Pick the two most critical success factors. Why did you pick them?
Management style
Openness and dialogue Involvement in decision making Flat organizational structure

Quality overrides quantity

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Regional player Number 2 bank Focus on core customer Rate of return on equity
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Question 4: What may negate Fionias strategy in the future?

Urbanization Failing of main mergers in the banking industry Financial crisis Top management dispute Shorter business cycles of technology E-banking replaces employees
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Conclusion
A good strategy for guaranteed long-term success depends on: Competitive advantage Strategic capabilities How leaders manage to develop these capabilities in the changing environment The timing to implement it Paradigm

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