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Innovation and Competitiveness: An Exploratory Study on Turkish Financial Sector

Innovation and Competitiveness: An Exploratory Study on Turkish Financial Sector

Melisa Erdilek Karabay (Marmara University, Turkey)
Copyright: © 2015 |Pages: 25
DOI: 10.4018/978-1-4666-6268-1.ch002
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Abstract

While the fostering effect of globalization continues, the traditional perspectives of corporations regarding competition lose their significance as the conventional strategies have started to give way to new approaches in the business world. Many firms have realized the fact that it is fundamentally necessary to revise their competitive strategies to maintain their sustainability. Therefore, “innovation,” one of the emerging strategies of competition, has globally become more and more dominant. However, the debate on the strategic value of innovation is still ambiguous not only in the theoretical framework but also in practice. The main purpose of this chapter is to make clear the theoretically informed definition of “innovation” and express its potential for providing competitive advantage in the financial sector. The chapter discusses some of the main scholarly sources of the issues related to the innovation strategies supported by the cases in the Turkish Banking and Insurance Industries.
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Background

The most important question for how to create and maintain competitive advantage through innovation has become one of the main strategic concerns of the corporations today. In the new business era, in order to survive in the highly competitive arena not only manufacturing but also service industries need to innovate. This is mostly valid for the financial sector because of its role as a service provider of the economy. Innovation makes a major contribution to the survival of banks. In this context, banks and insurance companies have to redefine their core strategies in a creative manner to acquire sustainability in the market. However, there is a lack of evidence for innovation to provide an adequate discussion for the scholars or corporations. Moreover, the literature is diversified by a number of approaches, prescriptions and practices that can be confusing and sometimes contradictory. The study focuses on exploring the determination of innovation, its theoretical background and the innovation strategies that are discussed in the Turkish Financial Sector, particularly in the banks and insurance companies.

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