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.
– 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 language | English |
|---|---|
| Pages (from-to) | 293-307 |
| Number of pages | 15 |
| Journal | International Journal of Bank Marketing |
| Volume | 29 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2011 |