Growth of Mutual Fund Industry in China: One Mutual Fund Company Case Study
Date Issued
2010
Date
2010
Author(s)
Shih, Kuei-Tao
Abstract
The research focused on exploring the growth strategies and key success factors of mutual fund industry in China, which has grown rapidly since 1998.
Regarding the mutual fund industry, all various countries adopt open policies gradually. Along with the open footsteps, the competition is also more and more intense. To be outstanding from the steep competition, “growth strategy” is very important for all mutual fund companies. The goal of “growth strategy” is to have competitive advantages. The competitive advantages come from the keen insight, efficient analysis, managing ability and successful implementation for strategies. The competitive advantages also rely on the macroenvironment as well as the strategic capabilities and resources within the organization, which also constitute the key success factors of mutual fund companies.
The research summarized the growth strategies for the mutual fund industry through analyzing the mutual fund industries in USA, Hong Kong, Taiwan and China. The growth strategies of mutual fund industry comprise the intracompany growth strategies - new products, new customers, new marketing channels, management pattern innovation and setting up subsidiaries or branches, as well as the intercompany growth strategies - merger and acquisition, joint venture and strategy alliance. With different policies and resources for growth strategies, the mutual fund industries in various countries have their respective competitive advantages, growth speed and development achievement. Although the mutual fund industry in China commenced later than that in Taiwan, by way of aggressive growth strategies, the former has surpassed the latter in most aspects, including the numbers of mutual fund companies, the numbers of mutual funds and the asset scale under management.
At the same time, the research also summarized the key success factors for the mutual fund industry through analyzing the mutual fund industries in USA, Hong Kong, Taiwan and China. The key success factors of the mutual fund industry comprise the ones existing in the macroenvironment - economic growth and individual income growth, capital market development, moderate government custodian and consummate pension plans, as well as the ones existing in the strategic capabilities and resources within the organization - superior fund performance, consummate corporate governance, adherent faith principle, adequate internal controls and risk management, brand building, frequent product innovation, differential service, outstanding human resources and effective education to investors.
In various countries, owing to different support from government, different flexibility, different efficiency, different insight and different ability of analysis, management and implementation, the mutual fund industries have their respective growth speed and development achievement. All of the aforementioned key success factors, originated from the strategic capabilities and resources within the organization, can promote the popularity and good reputation of mutual fund companies, so they may be integrated into “generalized brand building”. The generalized brand building is the key success factor to make mutual fund companies develop their core competences and maintain their competitive advantages.
From the case study, the importance of growth strategies and key success factors mentioned above to the development, expansion and achievement of mutual fund companies in dynamic environment was further verified.
Subjects
Mutual fund industry
Mutual fund company
Mutual fund
Growth strategy
Key success factor
Type
thesis
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