Prepared by: Kriste Colton 4.F.1 July 2011
Colton k 4.f.1_positioning and sustainable advantage_v0_r0
Jul 08, 2015
Zions Bancorp - Competitive Advantage Review.
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Prepared by: Kriste Colton
4.F.1
July 2011
Define different types of business strategies
Define competitive advantage and sustainability
Review two companies
◦ Mountain America Credit Union
◦ Zions Bancorporation
Discuss business strategy, sustainability and competitive
advantage
Provide Recommendations
Differentiator
Low cost producer
Broad
Focused / Narrow
Efficiency
Quality
Customer
Responsiveness
Innovation
Business Model
Discuss revenue and financialsFinancials 2010Net Earnings 16, 301 million
Earnings Per Share .43
Credit unions provide dividends to
customers/members
High rate of customer service and customer
satisfaction
Lower rates for loans and higher rates for
savings accounts
Financials 2Q 2011Net Income 14.8 million
Earnings (EPS) .29 per share (up from .25)
Stock Price $23.13
Peg Ratio 6.81
Cost Zions much less than many other banks
to obtain funds
◦ Only Wells and Chase obtain funds cheaper
Conservatively run business
SLEPT Analysis – Significant findings
◦ Social Customer hesitant of financial institutions
Social media
◦ Legal New banking regulations
◦ Economic Reduction of household debt
Unemployment
◦ Technological Replace core banking systems
Internet and mobile banking
Strengths
Decentralized structure enabling
niche targeting
Strong deposit market share in key
markets
High capital adequacy ratio
boosting confidence in depositors
Weaknesses
Operations concentrated in U.S.
Net interest market risk of decline
Declining loan quality
Opportunities
Increasing market share through
acquisitions
Positive outlook of US commercial
banking sector to grow further
Threats
Legal Regulations
Lower interest rates likely to affect net
interest margin
Competition keeps growth and margins
under check
Real estate ownership from decline in
the housing market
Maintain low cost source of funding
Expand position by acquisitions and foreign
market offering using Internet Banking
Reduce bad loan debt and increase capital to
protect net interest margin
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