Assessing Outsourced Distribution Channels
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F68407700%3A21630%2F18%3A00323173" target="_blank" >RIV/68407700:21630/18:00323173 - isvavai.cz</a>
Result on the web
<a href="http://dx.doi.org/10.5709/ce.1897-9254.267" target="_blank" >http://dx.doi.org/10.5709/ce.1897-9254.267</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.5709/ce.1897-9254.267" target="_blank" >10.5709/ce.1897-9254.267</a>
Alternative languages
Result language
angličtina
Original language name
Assessing Outsourced Distribution Channels
Original language description
We respond to recent failed initiatives of the Czech banking market to develop business models for the sale of retail deposit products, based on third-party distribution channels. We argue that the issue is the application of inappropriate capital budgeting methods. While static cost-benefit analysis seems to be generally appropriate for conventional banking projects based on branching or internet, they provide grossly misleading estimates of commissioning expenses, which can lead to completely unrealistic project assessments and poorly designed commission schedules. Alternatively, we derive a dynamic model based on statistical simulation (Monte Carlo) and using a real-life case study to illustrate the impacts of particular value drivers on commissioning costs. Our analysis shows that conventional and simulation-based budgeting generates inverse cost functions over time, and the difference becomes operationally tangible in the second and third year of the project, which is commensurate with the apparent timing of the bank’s business strategy revisions. To fulfill the goal of this paper, we demonstrate that statistical simulation is an expedient tool for managerial support and capital budgeting in cases where value drivers are impacted by non-linear dynamic processes.
Czech name
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Czech description
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Classification
Type
J<sub>SC</sub> - Article in a specialist periodical, which is included in the SCOPUS database
CEP classification
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OECD FORD branch
50206 - Finance
Result continuities
Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2018
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů
Data specific for result type
Name of the periodical
Contemporary Economics
ISSN
2084-0845
e-ISSN
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Volume of the periodical
12
Issue of the periodical within the volume
2
Country of publishing house
PL - POLAND
Number of pages
10
Pages from-to
129-138
UT code for WoS article
000437546500001
EID of the result in the Scopus database
2-s2.0-85049436546