Book review

Jarunee Wonglimpiyarat, Strategies of Competition

in the Bank Card Business. Innovation Management

in a Complex Economic Environment (2004, Sussex

Academic Press, Brighton, Portland) pp. 124D ix,

ISBN 1-903900-54-9

Since the 1970s, the financial services industry and the

banking industry have experienced considerable change as a

result of the development of various forms of bank cards.

Focussing on the UK industry in particular, Wonglimpiyarat in

her book ‘Strategies of Competition in the Bank Card

Business’ traces back to their origin the evolution of ATMs

(automated teller machines)/Cash Cards, credit and debit cards.

The lessons learned from this historic approach are then

transferred to the still emergent phenomenon of smart bank

cards, which allow—primarily because of their enhanced

memory capacity—to extend the existing mono-functional

card systems utilizing magnetic strips to multi-functional cards

with built-in microprocessors.

On an abstract level beyond the financial services industry,

this text represents an interesting example of a competitive

environment transforming into competition, that is to say the

growth of cooperation among industry players who are

essentially competitors. Since the success of a particular

bank card is extremely dependent on the successful exploita-

tion of network effects, each of the cases in the book treats a

different critical mass business concept with different threshold

values. As a consequence, readers learn how different forms of

innovation may lead to different industry structures and how—

starting from a competitive environment—homogenous global

standards may emerge.

doi:10.1016/j.technovation.2005.12.002

A specific threshold value for a critical mass system is not

only dependent on the originators of the system and their

customers, but is also dependent on technology and other

industry players (e.g. retailers) as well. Therefore, innovators

need to reconcile technology and customers with other industry

players, and consequently distinct industry structures come to

light. Cash cards, credit cards and debit cards underscore this

insight: while high initial investments in ATMs ultimately

necessitate global standards, the necessary support on the retail

side for debit card systems entails such standards as well.

Credit card systems, however, are based on a less expensive

technology than cash cards and do not need as much retail

support as debit cards. As a result, several surviving systems

constitute an oligopoly in the end.

The text is accompanied by a huge amount of data, which is

provided in a plethora of tables and figures. On the one hand,

the book is therefore a rich resource of information; on the

other hand, the reader is sometimes left a little bit confused

because the presented data is not accurately interpreted. That is

to say, contrary to the conventional reading habits, tables and

figures do not summarize the line of argumentation provided by

the text. In fact, the text sometimes seems to be a quick

summary of the overabundance of data. Apart from that, this is

an attention-grabbing, small book containing some worthy

insights, which are of value for any scholar and practitioner

with an interest in innovation management even beyond the

financial services industry.

Andreas Kuckertz*

University of Duisburg-Essen,

Universitaetsstr. 9, D-45141 Essen, Germany

E-mail address: andreas.kuckertz@icb.uni-due.de

Technovation 26 (2006) 820

www.elsevier.com/locate/technovation