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Customer value proposition, corporate transformation and growth in Caribbean financial firms

This study sought to establish what customer value propositions are influenced by corporate transformation and can simultaneously drive regional expansion and growth of Caribbean-based financial firms.  Its relevance derives from observing that financial firms in the Caribbean appear to need to develop a better understanding of the significance and role of their respective customer value proposition elements, in order to position themselves for regional growth.  And, there is a dearth of research to provide guidance to these firms.

The corporate transformation of financial firms for delivering customer value appears to be necessary when they seek to grow regionally or internationally.  A firm delivers value through its value proposition. This is a promise offered by the firm that value will be delivered to the customer and supported by the customer’s belief that this value will be received. In a competitive marketplace, the delivery of superior customer value is essential to the operation of financial firms.  To investigate whether the suggested link between transformation, value and growth is relevant to financial firms in the Caribbean, this study examined what elements of a financial firm’s customer value proposition are influenced by corporate transformation, and, can simultaneously drive regional expansion.  The framework used for this purpose was product life cycle (PLC) theory.  

Consistent with the implications of the PLC, this study found strong support for linking corporate transformation, value proposition attributes, and growth. The value dimensions confirmed by the data were customer orientation, consumer confidence, quality, flexibility, branding, firm capabilityand price.  The findings also showed that the corporate transformation of financial firms had a significant influence on customer orientation and confidence, as well as, brand perception and firm capability.  At the same time service prices (such as interest rates, fees and charges), consumer confidence and branding were identified as key drivers of regional expansion and growth.  These results are based on data collected from 243 customers covering 80 financial firms and 10 Caribbean countries.  

An implication of these findings is that the value dimensions validated by the data should be considered for inclusion in the business model of financial firms seeking to transform themselves to pursue regional expansion. They also suggest that business modelling of customer value propositions should take into consideration the various stages of the product (industry) life cycle.  This is because some elements of the customer value proposition may be more applicable at one stage of the life cycle than at others, and, consequently, appropriate discrimination by management is likely to be beneficial to firm performance.

 

For more information about this body of research, contact:

Dr. Trevor Smith, trevor.smith@uwimona.edu.jm

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