Competing in Global Niche Markets: The Case of Macquarie Bank

Cameron Gordon

    Research output: Contribution to journalArticle

    1 Citation (Scopus)

    Abstract

    Purpose
    – This article aims to examine a value creation model employed by Macquarie Bank, a worldwide leader in private infrastructure finance. The Macquarie case is interesting because the firm has internationalized by developing a unique market expertise; transformed this expertise into a set of core capabilities; and leveraged both of these components within a structure of corporate entrepreneurship. As such the Macquarie case may offer a new hybrid model for financial services globalization. However, the turbulent events surrounding the sub‐prime crisis have shown the limits of the model and raise questions about the sustainability of strategies that use leveraging as a central component.

    Design/methodology/approach
    – This is a detailed case study which employs close reading and analysis of secondary data, primarily corporate documents, academic articles and press interviews and reports about the firm.

    Findings
    – Macquarie offers a unique blend of niche marketing and international scale operations. The replicability of its strategy by others is unclear, although some general lessons can be drawn. Some of these are cautionary given the risks inherent in the bank's approach.

    Practical implications
    – The Macquarie experience suggests that inefficiencies in financial markets have been much more common than orthodox financial theory suggests since the firm has advanced by identifying and exploiting such inefficiencies. At the same time, there is the question of what the firm does as these inefficiencies become exhausted.

    Originality/value
    – There have been few academic studies of the Macquarie business model. This article is one of the first.
    Original languageEnglish
    Pages (from-to)293-307
    Number of pages15
    JournalInternational Journal of Bank Marketing
    Volume29
    Issue number4
    DOIs
    Publication statusPublished - 2011

    Fingerprint

    Niche markets
    Inefficiency
    Expertise
    Sustainability
    Hybrid model
    Subprime crisis
    Financial markets
    Inherent risk
    Design methodology
    Niche marketing
    Value creation
    Blends
    Finance
    Corporate entrepreneurship
    Globalization
    Secondary data
    Financial services
    Business model

    Cite this

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    title = "Competing in Global Niche Markets: The Case of Macquarie Bank",
    abstract = "Purpose– This article aims to examine a value creation model employed by Macquarie Bank, a worldwide leader in private infrastructure finance. The Macquarie case is interesting because the firm has internationalized by developing a unique market expertise; transformed this expertise into a set of core capabilities; and leveraged both of these components within a structure of corporate entrepreneurship. As such the Macquarie case may offer a new hybrid model for financial services globalization. However, the turbulent events surrounding the sub‐prime crisis have shown the limits of the model and raise questions about the sustainability of strategies that use leveraging as a central component.Design/methodology/approach– This is a detailed case study which employs close reading and analysis of secondary data, primarily corporate documents, academic articles and press interviews and reports about the firm.Findings– Macquarie offers a unique blend of niche marketing and international scale operations. The replicability of its strategy by others is unclear, although some general lessons can be drawn. Some of these are cautionary given the risks inherent in the bank's approach.Practical implications– The Macquarie experience suggests that inefficiencies in financial markets have been much more common than orthodox financial theory suggests since the firm has advanced by identifying and exploiting such inefficiencies. At the same time, there is the question of what the firm does as these inefficiencies become exhausted.Originality/value– There have been few academic studies of the Macquarie business model. This article is one of the first.",
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    Competing in Global Niche Markets: The Case of Macquarie Bank. / Gordon, Cameron.

    In: International Journal of Bank Marketing, Vol. 29, No. 4, 2011, p. 293-307.

    Research output: Contribution to journalArticle

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    AB - Purpose– This article aims to examine a value creation model employed by Macquarie Bank, a worldwide leader in private infrastructure finance. The Macquarie case is interesting because the firm has internationalized by developing a unique market expertise; transformed this expertise into a set of core capabilities; and leveraged both of these components within a structure of corporate entrepreneurship. As such the Macquarie case may offer a new hybrid model for financial services globalization. However, the turbulent events surrounding the sub‐prime crisis have shown the limits of the model and raise questions about the sustainability of strategies that use leveraging as a central component.Design/methodology/approach– This is a detailed case study which employs close reading and analysis of secondary data, primarily corporate documents, academic articles and press interviews and reports about the firm.Findings– Macquarie offers a unique blend of niche marketing and international scale operations. The replicability of its strategy by others is unclear, although some general lessons can be drawn. Some of these are cautionary given the risks inherent in the bank's approach.Practical implications– The Macquarie experience suggests that inefficiencies in financial markets have been much more common than orthodox financial theory suggests since the firm has advanced by identifying and exploiting such inefficiencies. At the same time, there is the question of what the firm does as these inefficiencies become exhausted.Originality/value– There have been few academic studies of the Macquarie business model. This article is one of the first.

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