Abstract
M.Com. (Business Management)
South Africa has a sound banking industry which has been disrupted by the information age, sluggish economic growth and new entrants. Value proposition can be applied to meet customer’s changing banking demands as South African banks endeavour to establish strategy for higher and sustainable profitable returns. The concept of the value proposition has its origins in marketing management, however it was established in this study that value proposition can be applied in strategic management. Value proposition cannot be separated from the rest of the business and are part of the integrated strategic tools. A gap that currently exists in literature is that value proposition is positioned as a Marketing concept but is not a strategic management tool. In this research, a case study of one of the big banks in South Africa is presented to critically investigate and understand value proposition strategy. Value proposition provide a platform so that customers’ needs can be addressed for their entire relationship with the bank. Value proposition enables banks to establish a holistic view of the customer. The study reveals that the bank under study is maturing and refining value proposition to improve its strategy. The research depicts the realistic conditions and challenges that the bank faces in the implementation of value proposition strategy. In this study, a unique representation of value proposition as a business strategy is provided instead of applying a marketing lens to value proposition. The contribution of the study is to show the applicability of value propositions as a strategic tool in the case study bank. An interpretivism qualitative research design has been applied to the study to understand value proposition. The key instrument for the study is interviews conducted by the researcher. This study therefore investigates value proposition as a business strategy in a South African bank. Some of the key findings that emanated were that the bank was considered reactive and banking customers were price-sensitive. Recommendations are based on strategic literature and findings so as to meet the identified challenges. The recommendations made in the study include the enhancement of business case methodology and environmental scanning to improve the bank’s position in the market. The bank should aim to continue to be relevant from a technological perspective and utilise product leadership to appeal to aspirant, status-conscious customers.