bbva case study research essay

1 . Advantages

It is claimed that BBVA offers implemented a innovation, “a paradigm that assumes that firms can easily and should employ external concepts as well as interior ideas, and internal and external pathways to market, as the companies look to enhance their technology says Chesbrough (2003)1. BBVA is discovering itself located right and succeeded pertaining to innovations. It really is suspected that whether the advancement at BBVA is successful and highly acknowledged open creativity approach.

This essay will certainly examine just how BBVA build their capacities to embed an open innovation approach in their organisation and description some difficulties when BBVA moving forward to more available innovation in the near future.

1 . you BBVA’s Essential Characteristics

BBVA (Banco Bilbao Vizcaya Argentaria) is a multinational Spanish financial group, providing a wide range of finance for both businesses and consumers. BBVA is positioned as the 2nd largest traditional bank in Spain. Because it’s headquartered in Madrid, BBVA primarily resides on Latin American countries. Additionally, it has a strong presence in southern The european countries, and features expanded into the United States and some countries in Asia.

In 2012, BBVA employed more than 115, 500 people and served over 53 million customers in 32 countries with about 8, 000 branches2. BBVA implements customercentric approach as the core business and setting of the BBVA brand3. Not simply BBVA give attention to a strong buyer orientation although also a committed innovation. installment payments on your Innovation by BBVA

installment payments on your 1 Core activities and principles

Over the last 10 years, BBVA has inclined even more customer-centric and gave a lot of attention to innovation. In 2007, the BBVA development centre was established in Madrid, where a number of innovative jobs were born and passed through an try things out procedure, commencing from modele phrase to testing process. Following this, the 1

Chesbrough, H. the year 2003. Open Development: The New Very important for Creating and Profiting from Technology. Cambridge, MA: Harvard Business School Press.

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BBVA Group Features [online], BBVA, Readily available from: <

http://shareholdersandinvestors.bbva.com/TLBB/micros/bbva2012/en/Highlights/BBVAGroupHighlights.html>[2 October 2013] 3BBVA Annual Report 2012 [online], BBVA, Available from:

[2 October 2013]

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Innovation by BBVA

Businesses Management

final results are analyzed and valued before introducing the creativity projects, which can be formed underneath BBVA’s advancement and client orientation methods. It has been believed that the following three main principles are incredibly helpful to BBVA in the good development of fresh services. (Ramis-Pujol and Dröege, 2011)4 1) Continuous consumer orientation and expertise

¢ Start with the analysis of the customers (customer insight) 2) Proactive outward-looking

¢ Look for and welcome the ideas from the outside to the business ¢ Start-up fairs and sponsor concepts competition

3) Team-work and contingency feedback spiral for fast decisions on innovation job progress

¢ Great communication within just team

¢ Every innovation task is examined and asked weekly However , it is doubted that with these root principles how BBVA make sure that their business lead from innovation is maintained.

2 . 2 Ground breaking Projects

According to BBVA advancement center, there are a variety of ongoing successions of innovations offering to their consumers’ needs. Almost all of BBVA innovative projects had been idea-led and technology-enabled. The moment BBVA regarded as its tasks, it is apparent that those assignments were driven from the unmet needs or customers’ demands that are not available on the market, which Vonseiten Hippel Elizabeth. defined as “user-driven innovation5 Since Ramis-Pujol andDröege (2011) examined innovation for BBVA, they will found that BBVA designed a large number of fresh banking services within simply two years.

Additionally, they examined a lot of projects highly relevant to innovation practice (see stand 1) that described how BBVA determined the market and developed these projects before launching for the market. After implementing, a lot of projects had been highly good but some are not. Despite too little of achievement in some projects, BBVA is still in a position to exploit the ability made within the projects also to share useful knowledge to other progressive projects.

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Ramis-Pujol M. and Dröege H., 2011. Case study of Innovation at BBVA. ESADE University. Von Hippel At the. (20 September 2013), User-driven innovation [online], BBVA Innovation Center, Available from: [1 October 2013]

a few

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Innovation at BBVA

Operations Administration

Table one particular: Some of the innovative projects in BBVA6

Projects

Form of Project

tu ceuntas

On the net personal financing

administration service

Partner

Hair strands. com

(24% acquisition)

TV casting show

Little IT firm

Partner operate

individually

Searching and networking internet

intended for SMEs

Swendish design firm

N/A

POK

tpresento

econta

Accounting services for SMEs

Virtual Hello

ATM

Stored Record Online

Study in customers’ usage of

technology

ATM software and hardware

developments

econta & exterior expert

(70% acquisition)

Online Doc

(70% acquisition)

IDEO

(Signed contract)

ATM Production

Involvement

Joint task team

Actively involved

Partner work

independently

Internal expert acquire

included

Instead of doing all prepared itself, BBVA seeks lovers or external experts such as the technologists outside BBVA, who had experienced in this field, to help it embed the technology around its progressive ideas that BBVA would like to deliver towards the markets. Although it has the partnering companies in their innovation, it is often argued that some of the BBVA innovative tasks may seem being outsourcing than open creativity. According to Belcourt M. (2006)7, “outsourcing refers to a contractual romance for the provision of business solutions by another provider. The followings are the example with this argument:

1) “POK ” once BBVA had the theory to expose TV sending your line show in order to get closer to young target groups, BBVA hired a small THIS firm to independently develop the social media technology and marketing intended for “POK project. 2) ATM ” the service was built in collaboration with IDEO, the best-known product and service Design Company, by signed the contract. IDEO provided the detailed examine of customer’s needs and observation showing how people socialized at ATMs. 3) Tpresento, the yellow pages website to get SMEs, BBVA selected the Swedish design and style company to realise a website design in this project. 8.

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Summarized from Ramis-Pujol J. and Dröege L., 2011. Example of Development at BBVA. ESADE School. p. 7-16. Belcourt Meters., 2006. Freelancing ” The huge benefits and the Hazards. Journal of Human Resource Management Assessment, 16(2), 269-279. 8

Ramis-Pujol J. and Dröege They would., 2011. Case study of Creativity at BBVA. ESADE University or college. 7

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Innovation by BBVA

Operations Management

In accordance that the small IT firm, IDEO and Swedish Design and style Company had been paid to work for BBVA, it was likely evaluated that BBVA externalized those corporations and these kinds of BBVA’s progressive projects appearance more like outsourcing than available innovation. In addition, regarding something differentiation that “provides prioritized service features to multiple classes of client requests says Zhu H. ain al., 2001)9, it can be noticed that BBVA tried to distinguish their solutions related to development to provide their multiple customers (innovation shoppers). Even though BBVA attempted to make them look very different, the service by itself is exactly similar. The case for this may be the ATMs, BBVA differentiates the ways customer access to the bank but nonetheless provides core banking service to the customers.

installment payments on your 3 Available innovation by BBVA

BBVA features embedded a innovation while described over in their corporation. They were aware that good ideas and expertise did not always are living inside the business but the collaboration side by side with internal and external experience. Chesbrough They would. et approach. (2006)10 founded that this procedures “will prolong to suppliers, customers, associates, third parties, and general community as a whole.  It is regarded important that wide open innovation would relate to a diploma of engagement between inside knowledge and external companions.

Chesbrough (2012)11 points out there are two significant kinds of a innovation. The first one is “outside-in open advancement, opening up the company’s advancement to many external inputs and contributions. In case of BBVA, it seeks away potential associates, who already had knowledge have experienced in new solutions, and then kind a fruitful relationship with them. The example with this is Su cuentas task, a unique assistance concept providing online funds management. BBVA invested 24% acquisition in Strands. com (the ground breaking IT Company), relying on this business in order to develop and maintain a software of the personal finance analyzer.

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Zhu L. et approach., 2001. Demand-driven service difference in cluster-based network web servers. In: INFOCOM 2001, impotence. 20th Total annual Joint Convention of the IEEE Computer and Communications Communities. Anchorage 22-26 April 2001. IEEE, 679 ” 688, vol. installment payments on your 10

Chesbrough H ain al. 06. Open Creativity, Researching a New Paradigm. Ny, NY: Oxford University Press, 1-12. eleven

Chesbrough, H. 2012. Open Innovation. Research-Technology Management, July-August 2012, 20-27.

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Innovation for BBVA

Functions Management

The 2nd kind of an open innovation is definitely “inside-out, which will organisations must allow the unused ideas to circulation outside the organisations for others to utilize in their businesses. Chesbrough (2012) discovered when doing his research that Xerox exchanged their misfit or lost projects into the market. Additionally, it found those “false negative projects that did not give benefit for the Xerox’s key business model might have

essentially more value if they did be released through a diverse business model. As opposed to Xerox, BBVA actively absorb external technology but they do not transfer unused projects to external associates.

The example of the organization that applied both equally outside-in and inside-out open innovation is usually Procter & Gamble, not simply they adopt outside-in open up innovation through its Connect+Develop approach12(the practice of tapping external intellectual property creation to accelerate internal innovation) but likewise share all their internal asset development and know-how to aid others outside of the company.

On the other hand, the opposite of the open up innovation is actually a close advancement, which “internal innovation activities lead to internally developed products and services that are then simply distributed by the firm.  (Chesbrough 06, p. 20). Some research workers (Lichtenthaler U, et ‘s., 2011)13 talk about about worker attitudes that a close advancement is seen as a high level of employee perceptions that would unlike to acquire technology from exterior sources, and in turn would like to highlight on internal development of fresh technological know-how.

They also will not like to transfer company’s solutions. The company that embedded with those perceptions would not shell out particular awareness of open innovation initiatives. Consequently , the bad attitude of acquiring external knowledge may impede the open advancement approach. In order to weight which approaches between your open and the close creativity applied to BBVA, how BBVA implemented execution whether real open or close innovation is needed to be looked at thoroughly as follows. Regarding the BBVA’s innovative jobs, it does not accurately acquire new technological knowledge from the doze

P&G Open Innovation (2013) What is Connect+Develop? [online], P&G, Readily available from: < http://www.pgconnectdevelop.com/home/pg_open_innovation.html>[7 October 2013] 13

Lichtenthealer U. et al., 2011. Is your small business ready for open innovation?. Journal of ÜBER Sloan Administration Review, 53 (1), 4548.

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Development at BBVA

Operations Administration

outsiders or maybe the outsiders only partly transferred the knowledge to them. BBVA builds romance with exterior partners in order to strengthen and speed up their very own internal innovation process nonetheless they do not genuinely gain the modern knowledge and know-how from their store. In some jobs such as POK and tpresento, BBVA simply paid funds and assigned their associates to improve them. This may lead to a low degree of engagement among BBVA and partnering corporations. In addition , there exists a small proof of the customer involvement in the advancement process be observed as another sign of the open up innovation.

As mentioned earlier, BBVA intends to advance forward to the open advancement and it includes embedded the surroundings of the open innovation through their corporation. It is likely that what BBVA provides being done rise above the close advancement. Therefore , it could be concluded that the innovation for BBVA has been a “slightly wide open innovation strategy but how do BBVA look at a system that was more open continues to be questionable.

several. Challenges in moving to to an open innovation

Uncertainty in the future might lead to a number of managerial problems. The followings are some potential dangers that BBVA may be aware of when ever keep moving towards to more open development approach.

several. 1 Potential Dangers in the future

Centralising innovation

According to the creativity centre in Madrid, the consumer insight office and all development projects happen to be centrally deal with within this centre. Although the centralisation brings BBVA the effectiveness of specialist control and uniformity for action, BBVA should know localised control over customer service and customer satisfaction. Effective launching fresh services in Madrid tend not to mean the success in anywhere else of the world. For better customer satisfaction, having localised creativity centres and synergies among customer information and innovative department will enable better understanding of neighborhood customer requires. However , positionnement mightbring a better cost to compliment their needs.

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Innovation for BBVA

Procedures Management

Expense of expenditure

Although the more effort with external partners could strengthen an open innovation, it also raises the expenses of thought generation and expenses of more staff involvement. Increased investments must create a quantity of innovative jobs. BBVA must look into implementing mechanisms for reducing the expenditure costs.

Perceptive property (IP)

Because BBVA features launched various innovative jobs, it is crucial it has to concentrate on strategy that prevents the imitation from its competitors. BBVA may make an attempt to protect their innovations through patents, art logos, copyrights or trade secrets. However , creating a barrier determined by its unique skills should also be considered. The company’s idea in literatures regarding the available innovation structure This is a big danger with the company that believes in creativity literatures or perhaps theories. Several academics continue to be publishing the success instances of the innovation, sending the message the fact that implementation in the open innovation will be beneficial and bring more consumers.

Then the organization will be able to offer better companies. It is supposed that those literatures might basic on the study conducted by means of interviewing the existing customers simply by leading inquiries. Carlsson C. and Walden P. (2007)14 discovered that although the research in the news mobile showed the evidence that there would be a greater demand, the case went wrong when the item was launched in the market and located that the require was not actually there. Therefore , it is important to consider the reliable from the literatures.

Employee’s attitudes

Since the management team features embedded open innovation environment in BBVA, it may seem that its employee’s attitudes could concur with outside-in and inside-out available innovation methods. However , there exists a lack of a great evidence to prove that most 14

Carlsson C. and Walden P., 2007. Mobile phone TV ” To Live or Die by Content. In: HICSS 3 years ago, ed. fortieth Annual The hawaiian islands International Meeting, Waikoloa January 2007. Finland: System Technology 2007, 1-9.

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Creativity at BBVA

Operations Management

or most of BBVA’s staff agree with individuals approaches, or perhaps they would have to accept that because they should follow the management’s policy. They may not end up being willing to support the company way. It is therefore important that the BBVA’s management should encourage every employees to become continuously progressive and to become involved in the wide open innovation, not only the creativity centre yet all parts in the enterprise.

3. a couple of More wide open innovation in BBVA

Launching several innovative jobs, BBVA creates an international advancement network numerous leading technology companies, academic institutions, and commercial organisations15. BBVA needs to ensure that every single of their lovers is a connect towards the inside and outside of the organisation. Additionally, in order to develop and speed up the pace of the open up innovation in BBVA’s primary business banking, BBVA might let the outsiders offer fresh technological knowledge or fresh innovation.

In that case, do business with these innovation suppliers and acquire that knowledge into BBVA’s creativity processes. Both equally BBVA and the suppliers would more straight engage with their very own core business that they head out parallel with banking development. BBVA’s Portable banking assistance called “Compass 16. is best described as the high level of partnership proposal between BBVA and many cellular phonecompanies. BBVA does not learn about technology about mobile phone.

Similarly, mobile phone firms do not know how doing banking service, however the intellectual manage defined the project and linked them to work together. This is the open development because they try to know more details and understand every core organization. This new service might be a differentiation but it really does not difference in fundamental of banking business service.

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Ensor M. (9 November 2012), Creativity Lessons via BBVA [online], DERNIER-NÉ ENSOR’s WEBLOG, Available coming from: http://blogs.forrester.com/benjamin_ensor/12-11-09-innovation_lessons_from_bbva [1 March 2013] 16

PRNewswire (7 September 2013), Mobile banking revise allows BBVA Compass clients to spend people using text, email [online], Yahoo Financing, Available coming from: < http://finance.yahoo.com/news/mobile-banking-allows-bbva-compass-152200662.html>[7 Oct 2013]

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Innovation at BBVA

Operations Supervision

4. Summary

Even though BBVA can be claimed which it does not put into practice a fully wide open innovation, what BBVA has done by launching a number of ground breaking projects and increasing amount of engagement of both outside-in and inside-out partners, could possibly be proven that BBVA is ready to move forwards to a really open advancement. However , outsourced workers and assistance differentiation issues have been argued among the BBVA’s innovative jobs. This might be led to a conclusion that BBVA offers implemented a “slightly wide open innovation way. In addition , it is far from to say that managing an open innovation way iswithout difficulties. BBVA should have to prepare possible strategies to manage potentials dangers that might originate from equally internal and external elements.

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Creativity at BBVA

Operations Managing

5. References

BBVA, 2012. BBVA Annual Record 2012 [online], BBVA, Available via: [2 October 2013]

BBVA, 2012. BBVA Group Highlights [online], BBVA, Available from: < http://shareholdersandinvestors.bbva.com/TLBB/micros/bbva2012/en/Highlights/BBVAGroupHighlight s.html>[2 March 2013]

Belcourt M., 06. Outsourcing ” The Benefits as well as the Risks. Record of Hrm Review, 16(2), 269-279.

Carlsson C. and Walden P., 2007. Mobile TV SET ” To Live or Expire by Content. In: HICSS 2007, ed. 40th Twelve-monthly Hawaii Foreign Conference, Waikoloa January 3 years ago. Finland: Program Science 2007, 1-9. Chesbrough, H. 2003. Open Innovation: The New Very important for Creating and Profiting from Technology. Cambridge, MOTHER: Harvard Business School Press.

Chesbrough, They would. 2012. Open up Innovation. Log of Research-Technology Management, July-August 2012, 20-27.

Chesbrough H ainsi que al. 2006. Open Innovation, Researching a fresh Paradigm. Ny, NY: Oxford University Press, 1-12.

Cloyd G. and Euchner J., 2012. Building Open Innovation by P&G. Journal of Record of ResearchTechnology Management, July-August 2012, 14-19. Ensor B. (9 Nov 2012), Development Lessons from BBVA [online], DERNIER-NÉ ENSOR’s BLOG PAGE, Available by: http://blogs.forrester.com/benjamin_ensor/12-11-09-innovation_lessons_from_bbva [1 Oct 2013]

Lichtenthealer U. et al., 2011. Is your company looking forward to open innovation?. Journal of MIT Sloan Management Assessment, 53 (1), 45-48.

PRNewswire (7 August 2013), Mobile banking update enables BBVA Compass customers to pay persons using text message, email [online], Yahoo Finance, Offered from: < http://finance.yahoo.com/news/mobile-banking-allows-bbva-compass-152200662.html>[7 October 2013]

Vonseiten Hippel At the. (20 Aug 2013), User-driven innovation [online], BBVA Innovation Centre, Available coming from:< http://www.centrodeinnovacionbbva.com/en/news/26230-user-driven-innovation >[1 October 2013]

Ramis-Pujol J. and Dröege H., 2011. Case study of Advancement at BBVA. ESADE School. P&G Open up Innovation (2013) What is Connect+Develop? [online], P&G, Readily available from: < http://www.pgconnectdevelop.com/home/pg_open_innovation.html>[7 October 2013] Zhu H. et al., 2001. Demand-driven service differentiation in cluster-based network servers. In: INFOCOM 2001, ed. twentieth Annual Joint Conference of the IEEE Computer and Communications Societies. Chuck 22-26 Apr 2001. IEEE, 679 ” 688, volume. 2 .

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