Competitive strategy and the implementation of a new network technology: the case of EFTPOS in the UK

Abstract

This article analyses competrtion and cooperation between UK banks, as they attempted to develop a national syitem jor electronic funds transfer at the point of sale (EFTPOS) The banks formed a {epanste company, EFTPOS UK Ltd, to develop a technically sophisticated national system, but soon interbank divisions led the larger banks to develop national schemes from pnwourly 'exfierzmental' networks. Over a period of two years, competition came to be defined as that between banks supporing the Switch scheme and banks supporting a Visa afebit turd senme. During this period the banks made repeated public declarations of the commritment to EFTPOS UK and represented nascent, proprietary EFTPOS networks as computible with the national scheme. The process by which the banks attempted to make sente of that ambiguous competitive environment is described and we use the idea of metastable' competive rategies to represent the successive temporary commitments the banks made to particular ways of understanding thew competitiue environments. 'strategic maps are drawn to represent stages in bank thinking on the possible competitive outcomes of EFTPOS development.

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