How to Strategically Position Equity Research After MiFID II: A Nordic Case Study with ABG Sundal Collier

Johannes Eskildsen Zwicky & Mark Bjørk

Student thesis: Master thesis

Abstract

This thesis contributes to the limited existing literature on how to strategically position equity research using a case study approach. Specifically, the primary objective of this thesis is to investigate how ABG should strategically position its equity research offering in a post-MiFID II context. We base our analysis on semi-structured interviews with large institutional buy-side firms. We assess the competitive implications of MiFID II where we learn that the bargaining power has changed from sell-side to buy-side as a direct consequence of MiFID II. We find that the main parameters upon which buy-side firms evaluate equity research providers are depth and width. From an internal analysis of ABG, we determine that its main resource (its analysts) constitutes a sustained competitive advantage. Subsequently, we construct a theoretical model of relative positioning strategies in the Danish market for equity research, where we map the relative positioning strategies of ABG and its imminent competitors. From this mapping, we discover that ABG has deliberately positioned itself as the only equity research provider prioritizing width over depth. We find that ABG occupies an essential spectrum of what buy-side firms value when deciding whom to buy equity research from. Furthermore, our model of relative positioning strategies unveils that there, at least theoretically, exists an inherent capital resource constraint in the Danish equity research market. In the case of ABG, this implicates that its relative positioning strategy involves a necessary sacrifice of depth to provide a wide coverage in a trade-off like situation. Lastly, this thesis concludes that ABG is successfully utilizing its main resources and capabilities to deliver value-added research through a differentiated relative positioning strategy centered around a wide coverage of Danish stocks.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages189