Thursday, December 13, 2018
'Bbva case study analysis Essay\r'
'1. Introduction\r\nIt has been claimed that BBVA has apply an dissipate intent, Ã¢â¬Å"a paradigm that assumes that firms screw and should use orthogonal ideas as well as intimate ideas, and indwelling and external paths to foodstuff, as the firms look for to advance their engineering scienceÃ¢â¬Â feel outs Chesbrough (2003)1. BBVA is comprehend itself positioned right and succeeded for foots. It is suspected that whether the alteration at BBVA is flourishing and highly recognized distri furthither de entirely approach.\r\nThis turn out will examine how BBVA build their capabilities to embed an string out origin approach in their organisation and schema several(prenominal)(prenominal) ch bothenges when BBVA moving forward to to a greater extent than undefendable intent in the near future. 1.1 BBVAÃ¢â¬â¢s key fruit Characteristics\r\nBBVA (Banco Bilbao Vizcaya Argentaria) is a multinational Spanish banking group, providing a wide-cut range of financia l serve wells for two traffices and consumers. BBVA is bedded as the second largest bank in Spain. As itÃ¢â¬â¢s headquartered in Madrid, BBVA mainly resides on Latin Ameri fuck countries. It besides has a strong mien in southern Europe, and has expanded into the United States and some countries in Asia. In 2012, BBVA employed more than 115,000 mint and served over 53 million clients in 32 countries with near 8,000 branches2. BBVA implements nodecentric approach as its burden personal line of credit and positioning of the BBVA brand3. Not only(prenominal) BBVA focus on a strong node orientation except likewise a dedicated basis. 2. mental institution at BBVA\r\n2.1 Core activities and principles\r\nOver the last decade, BBVA has inclined more customer-centric and gave a lot of attending to design. In 2007, the BBVA initiation centre was established in Madrid, where many contrasting substructureal acoustic projections were born and passed through an experimen t procedure, set out from prototype phrase to testing process. Fol down in the mouthing this, the 1\r\nChesbrough, H. 2003. Open inst onlyation: The bran-new Imperative for Creating and Profiting from Technology. Cambridge, MA: Harvard Business School Press.\r\n2\r\nBBVA Group steeplights [online], BBVA, loose from: <\r\nhttp://sh arholdersandinvestors.bbva.com/TLBB/micros/bbva2012/en/Highlights/BBVAGroupHighlights.html> [2 October 2013] 3 BBVA yearly Report 2012 [online], BBVA, for sale from:\r\n[2 October 2013]\r\n2\r\n intromission at BBVA\r\noperations precaution\r\noutcomes ar analyzed and valued before intromission the innovation projects, which argon digited under BBVAÃ¢â¬â¢s innovation and customer orientation approaches. It has been claimed that the following threesome main principles are extremely assistantful to BBVA in the successful take aimment of new serve wells. (Ramis-Pujol and DrÃÂ¶ege, 2011)4 1) Continuous customer orientation and expertise \r\nÃ¢â¬Â¢ Start with the analysis of the customers (customer penetration) 2) proactive outward-looking\r\nÃ¢â¬Â¢ Look for and welcome the ideas from the outside to the companion Ã¢â¬Â¢ Start-up fairs and patronize ideas competition\r\n3) Teamwork and concurrent feedback loops for fast decisions on innovation project progress\r\nÃ¢â¬Â¢ Good communication at bottom team up\r\nÃ¢â¬Â¢ Each innovation project is reviewed and questioned hebdomadally However, it is doubted that with these underlying principles how BBVA ensure that their raceway from innovation is maintained.\r\n2.2 progressive Projects\r\n fit to BBVA innovation center, there are a emergence of continuous successions of innovations offering to their customersÃ¢â¬â¢ necessarily. Most of BBVA modernistic projects were idea- direct and technology-enabled. When BBVA considered its projects, it is apparent that those projects were driven from the unmet unavoidably or customersÃ¢â¬â¢ needs that are non av ailable on the market, which Von Hippel E. delimitate as Ã¢â¬Å"user-driven innovationÃ¢â¬Â5 As Ramis-Pujol and DrÃÂ¶ege (2011) canvass innovation at BBVA, they found that BBVA developed a large number of new banking serve ups at bottom only 2 years.\r\nThey also examined some projects germane(predicate) to innovation practice (see table 1) that set forth how BBVA determine the market and developed these projects before instauration to the market. aft(prenominal) implementing, some projects were highly successful but some were non. Despite a lack of achievement in some projects, BBVA is still able to exploit the put through made within the projects and to share valuable companionship to other progressive projects.\r\n4\r\nRamis-Pujol J. and DrÃÂ¶ege H., 2011. deterrent lawsuit translate of figure at BBVA. ESADE University. Von Hippel E. (20 imperious 2013), User-driven innovation [online], BBVA change Center, accessible from: [1 October 2013]\r\n5\r\n3\r\n cr eative activity at BBVA\r\nOperations Management\r\nTable 1: nigh of the innovative projects in BBVA6\r\nProjects\r\nType of Project\r\ntu ceuntas\r\nOnline in-person finance\r\nmanagement run\r\n colleague\r\nStrands.com\r\n(24% acquisition)\r\nTV casting show\r\nSmall IT firm\r\n match operate\r\nseparately\r\nSearching and entanglementing web\r\nfor SMEs\r\nSwendish trope conjunction\r\nN/A\r\nPOK\r\ntpresento\r\neconta\r\nAccounting service for SMEs\r\n realistic Doc\r\nATM\r\nStored Document Online\r\n landing field on customersÃ¢â¬â¢ use of\r\ntechnology\r\nATM computer software and hardware\r\ndevelopments\r\neconta & deoxyadenosine monophosphate; impertinent expert\r\n(70% acquisition)\r\nVirtual Doc\r\n(70% acquisition)\r\nIDEO\r\n(Signed contract)\r\nATM Manufacture\r\nInvolvement\r\nreefer project team\r\nActively involved\r\nPartner operate\r\nseparately\r\nInternal expert take away\r\ninvolved\r\nInstead of doing all processed itself, BBVA seeks partners or e xternal experts such as the technologists outside of BBVA, who had see in this area, to help it embed the technology around its innovative ideas that BBVA wants to deliver to the markets. Although it has the partnering companies in their innovation, it has been argued that some of the BBVA innovative projects whitethorn seem to be outsourcing than present innovation. harmonise to Belcourt M. (2006)7, Ã¢â¬Å"outsourcing refers to a contractual relationship for the provision of tune enterprise serve by an external providerÃ¢â¬Â. The followings are the example for this argument:\r\n1) Ã¢â¬Å"POKÃ¢â¬Â Ã¢â¬ once BBVA had the idea to confront TV casting show in battle array to get deathr to younger target groups, BBVA employ a small IT firm to independently develop the social media technology and marketing for Ã¢â¬Å"POKÃ¢â¬Â project. 2) ATM Ã¢â¬ the service was built in partnership with IDEO, the best- adopt it awayn product and service Design Company, by signed the c ontract. IDEO provided the flesh out study of customerÃ¢â¬â¢s needs and posting of how sight be take ond at ATMs. 3) Tpresento, the yellow pages website for SMEs, BBVA selected the Swedish project conjunction to provide a website design for this project.8.\r\n6\r\nSummarized from Ramis-Pujol J. and DrÃÂ¶ege H., 2011. Case study of Innovation at BBVA. ESADE University. p.7-16. Belcourt M., 2006. Outsourcing Ã¢â¬ The Benefits and the Risks. diary of human race Resource Management Review, 16(2), 269-279. 8\r\nRamis-Pujol J. and DrÃÂ¶ege H., 2011. Case study of Innovation at BBVA. ESADE University. 7\r\n4\r\nInnovation at BBVA\r\nOperations Management\r\nAccording that the small IT firm, IDEO and Swedish Design Company were remunerative to work for BBVA, it was probably evaluated that BBVA externalized those companies and these BBVAÃ¢â¬â¢s innovative projects look more like outsourcing than idle innovation. Moreover, regarding a service specialization that Ã¢â¬Å"provide s prioritized service qualities to multiple classes of client requestsÃ¢â¬Â says Zhu H. et al., 2001)9, it can be seen that BBVA tried to differentiate their services think to innovation to serve their multiple customers (innovation shoppers). Although BBVA tried to chance on them look very different, the service itself is exactly the same. The example for this is the ATMs, BBVA differentiates the ways customer access to the bank but still provides core banking service to the customers.\r\n2.3 Open innovation at BBVA\r\nBBVA has embedded an open innovation as described above in their organization. They were advised that commodity ideas and expertise did non always reside inside the organization but the collaboration side by side with internal and external expertise. Chesbrough H. et al. (2006)10 founded that this practices Ã¢â¬Å"will put under to suppliers, customers, partners, third parties, and general community as a whole.Ã¢â¬Â It is considered primary(prenominal) tha t open innovation would relate to a degree of difference of opinion between internal noesis and external partners.\r\nChesbrough (2012)11 points out that there are two important engagings of an open innovation. The first one is Ã¢â¬Å"outside-inÃ¢â¬Â open innovation, opening up the process of companyÃ¢â¬â¢s innovation to many external inputs and contributions. In instance of BBVA, it seeks out potential partners, who already had experience have experienced in new technologies, and thusly form a productive relationship with them. The example for this is Tu cuentas project, a unique service concept providing online money management. BBVA invested 24% acquisition in Strands.com (the innovative IT Company), relying on this company in ordinance to develop and maintain an coating of the personal finance analyzer.\r\n9\r\nZhu H. et al., 2001. Demand-driven service differentiation in cluster-based network servers. In: INFOCOM 2001, ed. 20th Annual Joint company of the IEEE Comp uter and Communications Societies. anchorage 22-26 April 2001. IEEE, 679 Ã¢â¬ 688, vol.2. 10\r\nChesbrough H et al. 2006. Open Innovation, Researching a New Paradigm. New York, NY: Oxford University Press, 1-12. 11\r\nChesbrough, H. 2012. Open Innovation. Research-Technology Management, July-August 2012, 20-27.\r\n5\r\nInnovation at BBVA\r\nOperations Management\r\nThe second kind of an open innovation is Ã¢â¬Å"inside-outÃ¢â¬Â, which organisations are mandatory to allow the refreshing ideas to flow outside the organisations for others to take hold in their notees. Chesbrough (2012) discovered while doing his research that xerox good deald their misfit or unsuccessful projects into the market. It also found that those Ã¢â¬Å" assumed negativeÃ¢â¬Â projects that did not provide benefit to the go offÃ¢â¬â¢s core business model skill have\r\nessentially more value if they could be commercialized through a different business model. Unlike Xerox, BBVA actively absorb exter nal technology but they do not transfer unused projects to external partners.\r\nThe example of the organization that applied both outside-in and inside-out open innovation is Procter & Gamble, not only they embrace outside-in open innovation via its marry+Develop approach12(the practice of tapping external intellectual attribute development to accelerate internal innovation) but also share their internal asset development and know-how to help others outside the company.\r\nOn the other hand, the antithesis of the open innovation is a close innovation, which Ã¢â¬Å"internal innovation activities lead to internally developed products and services that are then distributed by the firm.Ã¢â¬Â (Chesbrough 2006, p.20). Some researchers (Lichtenthaler U, et al., 2011)13 mention about employee attitudes that a close innovation is characterized by high take of employee attitudes that would not like to memorise technology from external sources, and instead would like to emphasize on internal development of new technological knowledge.\r\nThey also would not like to transfer companyÃ¢â¬â¢s technologies. The company that embedded with those attitudes would not pay particular attention to open innovation initiatives. Therefore, the negative attitude of acquiring external knowledge cogency impede the open innovation approach. In order to weight which approaches between the open and the close innovation applied to BBVA, how BBVA implemented implementation whether pure open or close innovation is needed to be considered thoroughly as follows. Regarding the BBVAÃ¢â¬â¢s innovative projects, it does not exactly acquire new technological knowledge from the 12\r\nP&G Open Innovation (2013) What is attach+Develop? [online], P&G, ready(prenominal) from: < http://www.pgconnectdevelop.com/ sept/pg_open_innovation.html> [7 October 2013] 13\r\nLichtenthealer U. et al., 2011. Is your company ready for open innovation?. Journal of MIT Sloan Management Review , 53 (1), 4548.\r\n6\r\nInnovation at BBVA\r\nOperations Management\r\noutsiders or the outsiders only partly transferred the knowledge to them. BBVA builds relationship with external partners in order to strengthen and speed up their internal innovation process but they do not really gain the new knowledge and know-how from them. In some projects such as POK and tpresento, BBVA just nonrecreational money and assigned their partners to work for them. This leads to a low level of combat between BBVA and partnering companies. In addition, there is a small evidence of the customer engagement in the innovation process be seen as another indication of the open innovation.\r\nAs mentioned earlier, BBVA intends to fall forward to the open innovation and it has embedded the environment of the open innovation through their organization. It is likely that what BBVA has universe done go beyond the close innovation. Therefore, it can be concluded that the innovation at BBVA has been a Ã¢â ¬Å" or so open innovationÃ¢â¬Â approach but how could BBVA think about a system that was more open is still questionable.\r\n3. Challenges in moving towards to an open innovation\r\nUncertainty in the future talent lead to a number of managerial challenges. The followings are some potential dangers that BBVA world power be aware of when keep moving towards to more open innovation approach.\r\n3.1 Potential Dangers in the future\r\nCentralising innovation\r\nAccording to the innovation centre in Madrid, the customer insight department and all innovation projects are centrally manage within this centre. Although the centralisation works BBVA the effectivity of authority control and uniformity in action, BBVA should be aware of localised control of customer service and customer satisfaction. Successful launching new services in Madrid do not mean(a) the success in anywhere else of the world. For better customer satisfaction, having localised innovation centres and synergies betw een customer insight and innovative department would enable better accord of local customer needs. However, localisation might playact a higher cost to support their needs.\r\n7\r\nInnovation at BBVA\r\nOperations Management\r\nHigh costs of investment\r\nAlthough the more collaboration with external partners would be able to strengthen an open innovation, it also raises the costs of idea generation and expenses of more employee involvement. increase investments are required to create a number of innovative projects. BBVA should consider implementing mechanisms for reducing the investment costs.\r\n noetic property (IP)\r\nAs BBVA has launched many innovative projects, it is life-or-death that it has to focus on strategy that prevents the imitation from its competitors. BBVA may attempt to protect its innovations through patents, trademarks, copyrights or trade secrets. However, creating a barrier dependent on its unique skills should also be considered. The companyÃ¢â¬â¢s per suasion in literatures regarding the open innovation framework This is a big danger of the company that believes in innovation literatures or theories. Some academics are still produce the success cases of the innovation, sending the message that the implementation of the open innovation will be beneficial and bring more customers.\r\nThen the company will be able to provide better services. It is suspected that those literatures might base on the research conducted via interviewing the existing customers by leading questions. Carlsson C. and Walden P.(2007)14 discovered that although the research on TV busy showed the evidence that there would be a higher demand, the situation went wrong when the product was launched into the market and found that the demand was not actually there. So, it is important to consider the reliable of the literatures.\r\nEmployeeÃ¢â¬â¢s attitudes\r\nSince the management team has embedded open innovation environment in BBVA, it may seem that its emplo yeeÃ¢â¬â¢s attitudes would concur with both outside-in and inside-out open innovation approaches. However, there is a lack of an evidence to prove that most 14\r\nCarlsson C. and Walden P., 2007. spry TV Ã¢â¬ To embody or come about by Content. In: HICSS 2007, ed. fortieth Annual hello International Conference, Waikoloa January 2007. Finland: System acquaintance 2007, 1-9.\r\n8\r\nInnovation at BBVA\r\nOperations Management\r\nor all of BBVAÃ¢â¬â¢s employees agree with those approaches, or they would have to contract it because they have to follow the managementÃ¢â¬â¢s policy. They might not be willing to support the company approach. It is therefore important that the BBVAÃ¢â¬â¢s management needs to encourage all employees to be continuously innovative and to get involved in the open innovation, not only the innovation centre but all sections in the organisation.\r\n3.2 More open innovation at BBVA\r\nLaunching a number of innovative projects, BBVA builds an internat ional innovation network with many leading technology companies, academic institutions, and commercial organisations15. BBVA has to ensure that each(prenominal) of their partners is a bridge towards the inside and outside of the organisation. Moreover, in order to develop and speed up the pace of the open innovation in BBVAÃ¢â¬â¢s core business banking, BBVA may let the outsiders offer new technological knowledge or new innovation.\r\nThen, do business with those innovation suppliers and acquire that knowledge into BBVAÃ¢â¬â¢s innovation processes. Both BBVA and the suppliers would more directly engage with their core business that they set off parallel with banking innovation. BBVAÃ¢â¬â¢s Mobile banking service called Ã¢â¬Å"CompassÃ¢â¬Â 16. is best described as the high level of partnership engagement between BBVA and many mobile phone companies. BBVA does not know about technology on mobile phone.\r\nLikewise, mobile phone companies do not know how doing banking service, but the intellectual afford defined the project and linked them to work together. This is the open innovation because they taste to learn more details and understand each core business. This new service might be a differentiation but it does not dislodge in fundamental of banking business service.\r\n15\r\nEnsor B. (9 November 2012), Innovation Lessons from BBVA [online], BENJAMIN ENSORÃ¢â¬â¢s BLOG, operable from: http://blogs.forrester.com/benjamin_ensor/12-11-09-innovation_lessons_from_bbva [1 October 2013] 16\r\nPRNewswire (7 August 2013), Mobile banking update allows BBVA Compass customers to pay people using text, email [online], Yahoo Finance , Available from: < http://finance.yahoo.com/ intelligence information/mobile-banking-allows-bbva-compass-152200662.html> [7 October 2013]\r\n9\r\nInnovation at BBVA\r\nOperations Management\r\n4. Conclusion\r\nAlthough BBVA is claimed that it does not implement a fully open innovation, what BBVA has done by launching a numbe r of innovative projects and increasing level of engagement of both outside-in and inside-out partners, might be proven that BBVA is ready to move forwards to a truly open innovation. However, outsourcing and service differentiation issues have been argued among the BBVAÃ¢â¬â¢s innovative projects. This might be led to a conclusion that BBVA has implemented a Ã¢â¬Å"slightly open innovationÃ¢â¬Â approach. In addition, it is not to say that managing an open innovation approach is without challenges. BBVA should have to bring in possible strategies to cope with potentials risks that might stem from both internal and external factors.\r\n10\r\nInnovation at BBVA\r\nOperations Management\r\n5. References\r\nBBVA, 2012. BBVA Annual Report 2012 [online], BBVA, Available from: [2 October 2013]\r\nBBVA, 2012. BBVA Group Highlights [online], BBVA, Available from: < http://shareholdersandinvestors.bbva.com/TLBB/micros/bbva2012/en/Highlights/BBVAGroupHighlight s.html> [2 October 201 3]\r\nBelcourt M., 2006. Outsourcing Ã¢â¬ The Benefits and the Risks. Journal of Human Resource Management Review, 16(2), 269-279.\r\nCarlsson C. and Walden P., 2007. Mobile TV Ã¢â¬ To Live or Die by Content. In: HICSS 2007, ed. 40th Annual Hawaii International Conference, Waikoloa January 2007. Finland: System Science 2007, 1-9. Chesbrough, H. 2003. Open Innovation: The New Imperative for Creating and Profiting from Technology. Cambridge, MA: Harvard Business School Press.\r\nChesbrough, H. 2012. Open Innovation. Journal of Research-Technology Management, July-August 2012, 20-27.\r\nChesbrough H et al. 2006. Open Innovation, Researching a New Paradigm. New York, NY: Oxford University Press, 1-12.\r\nCloyd G. and Euchner J., 2012. edifice Open Innovation at P&G. Journal of Journal of ResearchTechnology Management, July-August 2012, 14-19. Ensor B. (9 November 2012), Innovation Lessons from BBVA [online], BENJAMIN ENSORÃ¢â¬â¢s BLOG, Available from: http://blogs.forrester.com /benjamin_ensor/12-11-09-innovation_lessons_from_bbva [1 October 2013]\r\nLichtenthealer U. et al., 2011. Is your company ready for open innovation?. Journal of MIT Sloan Management Review, 53 (1), 45-48.\r\nPRNewswire (7 August 2013), Mobile banking update allows BBVA Compass customers to pay people using text, email [online], Yahoo Finance , Available from: < http://finance.yahoo.com/news/mobile-banking-allows-bbva-compass-152200662.html> [7 October 2013]\r\nVon Hippel E. (20 August 2013), User-driven innovation [online], BBVA Innovation Center, Available from:< http://www.centrodeinnovacionbbva.com/en/news/26230-user-driven-innovation > [1 October 2013]\r\nRamis-Pujol J. and DrÃÂ¶ege H., 2011. Case study of Innovation at BBVA. ESADE University. P&G Open Innovation (2013) What is Connect+Develop? [online], P&G, Available from: < http://www.pgconnectdevelop.com/home/pg_open_innovation.html> [7 October 2013] Zhu H. et al., 2001. Demand-driven service diffe rentiation in cluster-based network servers. In: INFOCOM 2001, ed. 20th Annual Joint Conference of the IEEE Computer and Communications Societies. Anchorage 22-26 April 2001. IEEE, 679 Ã¢â¬ 688, vol.2.\r\n11\r\n'