Adding Customer Value to Your Financial Prganisation for Competitive Essay

Adding Customer Value to Your Financial Prganisation for Competitive Advantage - Essay Example Background Financial institutions are increasingly facing a complex environment which directly relates with the competitive environment in the industry. The current financial crisis has relatively shaken the confidence of many in the viability of financial institutions and as such doing business in such an environment is really a challenge task. One of the most important ways through which any institution including financial institutions can compete and withstand the difficult economic situations is to develop its core competencies and create competitive advantage. One of the most important ways through which it can be achieved is the delivery of customer value to the customers of our organization. This could be helpful in order to allow the bank to actually lock in the existing base of customers while at the same time ensuring that new customers are also attracted.( Bill, 2003) To create a value for the customers, an organization however, have to incur the costs in order to ensure t hat the value delivered to the customers outpaces the cost incurred on generating such value. Resultantly an organization also develops its competitive advantage in order to become relatively stronger as compared to the competition. It is critical therefore that the customer value is generated to achieve the competitive advantage. ... In order to achieve this, there are real chances that the overall customer value may decline as the increasing cost pressures as well as liquidity crunch may force many banks and financial institutions to generate new avenues to achieve profitability. For any firm, its current base of customers is considered as one of the most valuable assets to care of and as such it is critical to understand that delivering value to the customers can be one of the key drivers of growth in an economy which is on decline. It is important therefore that strategic direction must be set to ensure that the delivering value to the customers is integrated with the generation of competitive advantage for the firm.( Shirley, 2000) Financial organizations are also relatively more regulated as compared to other industries therefore working in an environment which is heavily regulated requires innovativeness and creativity to develop and market products and services which can cater to the different needs of the customers while at the same time generating the relative value for the firm also. It is therefore critical that when an organization delivers customer value, the same must also result into the increase for the firm value too. Translation of the customer value to the firm value therefore is critical for manages to ensure because once competitive advantage is generated, it is important that the same must also develop into the firm level value for the firm. Commonwealth Bank’s effort to generate customer value and subsequent generation of competitive advantage therefore must result into the increase in the value for its shareholders and investors. Generation of