Modern Methods of Strategy Development in Commercial Banks: the Use in Russia

<p>The theme topicality is caused by the lack of empirical research on the subject as well as insufficiency of scientific elaboration of this problem within the framework of existing works devoted to the bank strategic management. Moreover, the significance of current research is determined by the necessity to develop a certain universal set of tools for strategic modeling, which could be rather easily adapted to the unique external and internal context of a particular commercial bank.</p><p>The purpose of the master&#39;s thesis involves analysis of the basic principles and approaches to constructing strategies in commercial banks, as well as developing and testing methods of strategic modeling on commercial banks of Nizhny Novgorod region.</p><p>Achieving this goal involves accomplishing the following tasks:</p><p style="margin-left:71.45pt;">-&nbsp; To examine the concept of &quot;strategy&quot;, to identify its key elements, as well as to study the basic types of strategies and their classification;</p><p style="margin-left:71.45pt;">-&nbsp; To explore the concept of strategic analysis, to indicate its key stages, to systematize the methods and tools necessary to implement a comprehensive strategic analysis;</p><p style="margin-left:71.45pt;">-&nbsp; To analyze the effectiveness of the balanced scorecard as a tool for strategic management and planning, to highlight the main advantages and disadvantages of this model;</p><p style="margin-left:71.45pt;">-&nbsp; To assess the practicability of the analytical apparatus of game theory for modeling the competitive strategy, to examine the basic techniques of the game simulation and identify their possible restrictions;</p><p style="margin-left:71.45pt;">-&nbsp; Based on the examples of commercial banks of Nizhny Novgorod region, to construct a strategy map of the balanced scorecard, which would help to evaluate the interrelationships among bank&#39;s performance indicators and to prioritize strategic moves; to develop a model of the commercial bank&#39;s competitive behavior, which allows to determine the optimal behavior in the most unfavorable conditions caused by competitors&#39; actions.</p><p>Key research results include the following aspects:</p><p style="margin-left:71.45pt;">-&nbsp; The mechanism of the strategic management implementation in a commercial bank was structured, while the basic types of strategies (corporate, competitive, functional) and methods of strategic analysis (analysis of competitors, analysis of external environment, Porter&#39;s five forces) were systematized.</p><p style="margin-left:71.45pt;">-&nbsp; The methodology of developing a bank&#39;s corporate strategy by constructing strategy maps of the balanced scorecard was modified and tested on the JSC&nbsp;CB &quot;Ellips bank&quot;. The DEMATEL method employed in the current research proved its worth in terms of identifying causal relationships between the factors on the strategy map, as far as it allows to determine not only the direction but also the strength of mutual influence.</p><p style="margin-left:71.45pt;">-&nbsp; The method for constructing a competitive strategy was developed based on the example of JSC &quot;NBD-Bank&quot; with the use of a set of tools such as game theory, cluster analysis and econometric modeling. The model built allows the bank to respond effectively to changes in pricing policies of its competitors.</p><p>Practical implication of this research work involves the possibility of applying the results obtained in the strategic management system of a commercial bank. The methods of constructing corporate and competitive strategies, developed and tested within the scope of this research, bear high practical value. Precisely, they allow bank managers to reasonably choose the most appropriate strategic steps in each situation depending on the current state of a bank&#39;s internal and external environment.</p>