Performance benchmarking and strategic homogeneity of Indian banks

Abstract

Explores the linkage between performance benchmarking and strategic homogeneity of Indian commercial banks. Devises a method of benchmarking performance of Indian commercial banks using their published financial information. Defines performance by how a bank is able to utilize its resources to generate business transactions and is measured by their ratio, which is then called the efficiency. The concept of efficiency is critical from a marketing perspective. Methodologically, in order to overcome some of the shortcomings of simple efficiencies obtained through self‐appraisal of individual banks, a more “democratic” concept of cross‐efficiency evaluated with the process of peer‐appraisal has been brought in to benchmark the banks. Clusters banks based on similarity in business policy which offers a framework for competitive positioning in the target market and serves as a basis for long‐term strategic focus. Finds that the public sector banks generally outperform the private and foreign banks in this rapidly evolving and liberalizing sector.