| dc.description.abstract | After the official signature of the Economic Cooperation Framework Agreement (ECFA) on June 29, 2010, the banking industries across the Taiwan Strait will start arranging their businesses. Chinese Mainland is the largest recipient of overseas investment from Taiwan. With the financing demands of Taiwanese enterprises and the desire of bankers, the motivation of Taiwan’s banking industry to enter Chinese Mainland market has been growing stronger. By taking case banks as examples, this paper aims to explore the impact of the ECFA on Taiwan’s banking industry and how the case banks adjust their business models to cope with the changes under the ECFA.
After the signature of EFCA, Taiwan’s banking industry will gain more favorable competition conditions in Mainland than foreign banks, which will be conductive to increasing its financial competitiveness. However, when entering Chinese Mainland market, Taiwan’s banking industry will be confronted with the management and credit risks brought by the policy changes of Chinese Mainland, and on the other hand, the Mainland capital investment in Taiwan may possibly cause flow-away in customer and business to Taiwan’s banking industry and the information outflow of JCIC. Therefore, Taiwan’s banking industry needs to carefully cope with these issues.
By using the analysis framework of Hamel’s business model, this study finds that the main coping strategies adopted by the case banks are as follows:
(1) In term of value network, the case banks can rapidly access to market by means of buying shares or strategic coalitions;
(2) In term of core strategy, the case banks can accelerate the development of effective customers and achieve the profit goals in Chinese Mainland if taking the model of “basis for differentiation and life insurance & bank cooperation as combination”;
(3) In term of strategic resources, the case banks value core competencies, employ excellent and professional financial talents and develop full-functioning organizations;
(4) In term of pricing structure, as the high costs in setting business service offices in Chinese mainland, the case banks adopt differential pricing and focus on customers segmentation to lock up target markets.
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