Value Creation in the Banking Industry - A comparative case study of how value is proposed by two Swedish banks from a S-D logic perspective

Abstract

This study examines how two banks with different digital strategies and customer interaction approaches propose value propositions. Digitalization is reshaping industrial fundamentals as well as leading to changes in the value proposition of companies’ business models. This is forcing businesses to clearly articulate the value proposition to stay competitive in the market and to understand how the value proposition is used in the co-creation of value together with customers. Service innovation is further used by organizations to improve their current value proposition. In addition, previous studies have argued that more research is needed to clarify the value proposition structure and management of service innovation, as well as to apply the S-D logic perspective on the retail banking industry. The purpose of this study has been to analyse how value is proposed by banks through the comparison of one Traditional bank and one Digital bank. The thesis examines what the main components are in the banks’ respective value propositions, and identifies differences and similarities. Furthermore, the thesis also examines how the two banks manage service innovation in order to develop their value proposition. In this qualitative study, the chosen methodology was a multiple case study with a comparison between banks within the Swedish banking industry, from an organizational perspective. Primary data has been collected through seven semi-structured interviews with selected executives in the two case companies. Conclusively, the main contribution is argued to consist of a clarification of how value propositions are structured in the banking industry, together with the insight that there is no uniform approach towards either the creation of a value propositions nor the management of service innovation. Thus, this result is argued to extend previous literature about the S-D logic view.