The C-A-P model discussed in the previous section can be used in several ways:

1. 1. Given adequate data availability it can be used to analyse the size and durability of excess returns associated with individual segments of domestic and international financial markets by applying conventional market-structure analysis. In the case of imperfect competition, it can be used to identify the importance of scale economies in the financial services industry.

2. 2. It can aid understanding of the linkages that exist between different types of financial services, and help to identify the importance of economies of scope in this industry.

3. 3. It can be used to explain industry internationalization both through the value coefficients embedded in individual C-A-P cells and by superimposing on the basic structure economies of both scale and scope.

4. 4. It can be used to identify appropriate public policies towards the financial services industry in a competitive structure-conduct-performance context.

5. 5. It can serve a normative function by identifying coherent firm strategies that combine correctly-identified market characteristics and firm-specific advantages.

In the latter context, a firm in the financial services industry faces a given C-A-P cell configuration and linkages at a point in time, alongside a particular institutional capability profile. Some of the cells have already been accessed, and some form a feasibility-set for possible further development. The firm's expansion path—and the desired cell-configuration of its business—depends on the level of perceived risk-adjusted economic returns associated with the feasibility-set of cells, resistance lines impeding access to those cells, and the assessed value of inter-cell linkages. Successful players must therefore identify (1) the specific sources of their competitive advantage; (2) those cells where this competitive advantage can be applied, adds value, and is sustainable; and (3) the competitive potential inherent in the cell-linkages. Application of a competitivestructure framework, such as the one presented here, will help identify the cells and cell-clusters where significant returns based on market power are likely to exist, and (equally important) where they are likely to be durable.