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Strategic Management
Submitted To:
Mr. Asif Ayub Kiyani
Submitted By:
Fahim Iqbal MB071080
Muhammad Naveed Zafar MB071029
NAuman Ahmed MB071042
Page 1 of 30 Mohammad Ali Jinnah University
Strategic Management
Contents
THE ALLIED BANK LIMITED..........................................................................................................................4
History of Allied Bank of Pakistan................................................................................................................5
Allied bank Objectives.................................................................................................................................9
Mission...................................................................................................................................................9
Core Values............................................................................................................................................9
SWOT ANALYSIS:.......................................................................................................................................10
Strengths...................................................................................................................................................10
WEAKNESSESS...........................................................................................................................................13
OPPORTUNITIES.........................................................................................................................................14
Threats......................................................................................................................................................15
STAGE 1...................................................................................................................................................16
THE INPUT STAGE.................................................................................................................................16
Competitive Profile Matrix (CPM) Matrix....................................................................................16
External Factor Evaluation (EFE) Matrix....................................................................................................17
Competitive Profile Matrix (CPM)..............................................................................................................18
Internal Factor Evaluation (IFE) Matrix......................................................................................................19
STAGE 2...................................................................................................................................................20
THE MATCHING STAGE.......................................................................................................................20
TOWS Matrix.............................................................................................................................................21
SPACE Matrix.............................................................................................................................................23
BCG Matrix................................................................................................................................................26
Grand Matrix.............................................................................................................................................27
IE Matrix....................................................................................................................................................28
STAGE 3...................................................................................................................................................29
THE DECISION STAGE..........................................................................................................................29
Strategy Evaluation Decision Matrix:.........................................................................................................30
Page 2 of 30 Mohammad Ali Jinnah University
Strategic Management
Introduction
The function of commercial banking and application of the fundamental principles of the depositor bank relationship have remained essentially the same since about 500 B.C. Bank operation methods and procedures, on the other hand, have undergone a constant process of evolution because of economic growth, the mounting volume of transactions and greater use of banking facilities.
As a result of these contributing factors, methods and practices necessary to handle the increased volume of detail work have been developed while other and quicker methods have been adopted in order to cope with the increased volume, much of which has been accomplished without unduly increasing the cost of doing business.
During the last twenty years we have experienced a constant transition from the old to the new - from manual to mechanical methods and procedures - from old established practices to current techniques and to a more scientific approach to the solution of problems brought about by day to day changes in business practices.
OUR BANKING SYSTEM TODAY:
The Banking Business as we know it today is composed of three separate and distinct principal functions.
1- The acquiring of funds to invest and loan.
2- The investing of such funds in loans and bonds.
3- The servicing of such funds, such as providing of checking/saving facilities, and the collection of draft, notes and checks.
These functions, while differing in detail of operation, follow the same principles established hundreds of years go by money-lenders and exchangers.
Bank Definition
"Banks are institution that enjoys the public money doing nothing for the public".
According the banking ordinance 1962 sec (6),
"Banks mean the acceptance of deposit for the purpose the lending or the investment of deposit of money from the public repayable on demand or otherwise withdraw able by cheques, drafts, orders, and otherwise"
Banker
Banker includes a body of persons whether incorporated or not who carry on business of banking.
Page 3 of 30 Mohammad Ali Jinnah University
Strategic Management
Customer
Customer is defined as one who has account with the bank. The word customer signifies a relationship in which duration is not of the essence. A person whose money has been accepted by the Bank on the footing that they undertake to honour cheques up to the amount standing to this credit is a customer of the Bank in the sense of the statute, irrespective of whether his connection is of short or long standing. All the city branches accounts are computerized.
Types of banks:
Today the principal banking and financial facilities available to serve commercial are provided, and made available to them through five types of banks.
1. Commercial Banks
2. Trust companies
3. Saving Banks
4. Saving and Loans association
5. Finance companies
Commercial Banks:
Commercial banks may be defined as "moneyed" corporations, authorized by law to receive deposits and pay such funds to others on order discount and negotiate promissory notes, drafts, bills of exchange, and other evidences of debt; to lend
money on real or personal security; to make collectives; and conduct such other moneyed transactions as are not inconsistent with its charter or the law under which it operates.
THE ALLIED BANK LIMITEDAt the time of independence in 1947 the banks services were very badly affected and by June 30, 1948, the number of offices of scheduled banks came down to only 81 in the territories comprising Pakistan; but by December 31, 1973 there were following 14 scheduled Pakistani commercial banks with 3323 offices all over the Pakistan and 74 offices in foreign countries.
1. National Bank of Pakistan
2. Habib Bank Limited.
3. United Bank Limited.
4. Muslim Commercial Bank Limited.
5. Standard bank Limited
Page 4 of 30 Mohammad Ali Jinnah University
Strategic Management
The facts show that commercial banking has made tremendous progress and achieved a phenomenal growth since independence and that the commercial banks have duly played a vital role as a mobilize of people's saving to constitute the most important source of financing in country economy. However it was felt that these bank failed to ensure that the resources so mobilized by them flow in those sectors of economy where they would produce the goods and services needed badly by a very large number of people in Pakistan.
History of Allied Bank of Pakistan
ABL was established in Lahore before independence in 1942 Allied Bank Limited is one of the largest
banks in Pakistan now with more than 757 Branches in over 300 cities offering real time online banking. .
In August 2004 the Bank was restructured and the ownership was transferred to Ibrahim Group.
Established in December 1918 with the name “Australasia Bank” at Lahore with a paid-up share capital
of Rs. 0.12 million under the Chairmanship of Khawaja Bashir Bux, the Bank had attracted deposits
equivalent to Rs. 0.431 million in its first eighteen months of business. Total assets then amounted to Rs.
0.572 million. Today Allied Bank's paid up Capital & Reserves amount to Rs. 10.5 billion, deposits exceed
Rs. 143 billion and total assets equal Rs. 170 billion. The different stages through which Allied Bank had
gone are a result of hard work and determination.
Before partition the Hindus got flourished in the field of trade and commerce and it was thought that
muslims can not compete then because they can not save and invest , and they do not have the caliber
to operate in the field of banking . To respond these remarks by hindus , Khawaka Bashir Bux
established the first Muslim bank in December 1918; by the name of Australasia Bank Limited. The initial
equity of the Bank amounted to Rs 0.12 million, which was raised to Rs 0.5 million by the end of first full
year of operation, and by the end of 30th June 1947 capital increased to Rs. 0.673 million and deposits
raised to Rs 7.728 million.
Australasia Bank was the only fully functional Muslim Bank on Pakistan territory on August 14, 1947.It
was severely hit by the riots in East Punjab.All the branches in India were closed and new Branches
were opened in Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha, Jhang, Gujranwala and Kasur. Later its
network spread to Multan & Quetta. Despite the worst conditions prevailing during 1947 to 1948
Page 5 of 30 Mohammad Ali Jinnah University
Strategic Management
Australasia made a profit of 50,000 .It lost 51 branches because of separation of East Punjab, but still it
didn’t give up and kept on working hard with full determination and got success.
Different Phases of the Bank Are as Follows:
THE PRE INDEPENDENCE PERIOD (1942-47)
Australasia Bank had the unique distinction of being closely identified with some of the country’s most
Prominent leaders of the freedom moment. Such as Mian Mumtaz Daultana (Board of directors), Mian
Iftikhar Hussain and Maulana Zafar Ali Khan.
The bank originally started its operation in the garage of Khawaja Bashir Baksh’s bungalow (who was the
chairman) near the Lahore Railway Station. But the success of Bank enforced the directors to open its
another branch in Anarkali on 1st March 1944. Kh. Bashir was first chief executive. He was the person
who was really working in its development. His sincerity of purpose can be judged from his great
moments.
Another branch was opened at Amaratsar in 1945. In June 1946, the bank earned the status of
scheduled bank. During 1946-47 many other branches were opened at Mcleod Road Lahore, Jallandhar,
Ludhiana, Agra and Delhi.
At independence the industrial and commercial sectors were underdeveloped but ABL contributed a lot
in the development of these sectors.
AUSTRALASIA BANK IN PRIVATE SECTOR (1947-74)
It was the only full functional Muslim Bank on the land of Pakistan. On August 14, 1947 bank was
identified with Pakistan moment. Many of its Board of Directors were prominent Muslim League
leaders. Jallandhar and Ludhiana branches were attacked by rioters because of Muslim staff appointed
in these branches of bank. But when the Pakistan flags wee hoisted on the branches then all the banks
in India were closed down. With this, the bank lost a lot of capital and its deposits and almost 6
branches. During 1948 new branches were opened at Karachi, Rawalpindi, Peshawar, Sialkot, Sargodha,
Jhang, Gujranwala and Kasur. But later on its branches were spread to Multan and Quetta. At that time,
the bank financed trade in cloth and food grains and thus maintained consumer’s supplies during the
riot effected early months of 1948. Australasia Bank made a profit of 50,000/= in 1947-48.
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In August 1948, Australasia Bank became the first Pakistani Bank to successfully negotiate and open L/C
for a Sialkot based importer of books. So it also made correspondence relations with Midland (UK),
Chase Manhattan (USA) and Lloyds (India).
During the treasury functions of Federal Govt. of Pakistan and it also acted as Banker to several local
Govt. Bodies and to the Punjab University during this period. Treasury functions were taken by National
Bank of Pakistan in 1949. In 1950-51, Chairman was replaced with his own brother Kh. Sharif Baksh.
During 1955-56, Mr. Naseer A. Sh. became the Chairman of Board and close working relationship was
forged between the new Chairman and Managing Director. This partnership proved in modernizing its
operations and consolidating its financial position.
In 1963, Bank had 29 branches in various cities. And deposits were 89 million and advances were 66
million. Bank was mainly concerned with general banking and trade financing (including foreign
exchange transactions). It helped a lot in development of small and medium sized business houses.
These were Nishat, Crescent, Pak Cement, Haroon traders, Takht Bhai Sugar, Insaf, Punjab soap, Pak
fruit and Saboor Oil Mills etc.
In 1964, 13 new branches were opened including 3 in East Pakistan. In 1965, 17 new branches were
opened and over 83 % of gross profit for the year was earmarked for development expenditure in
connection with opening of new branches.
In 1966 bank opened 26 new branches and doubled its reserved funds. For the first time in history, its
advances were increased to Rs. 160 million and deposits raised by almost 58 % exceeding Rs. 232
million. In 1966, Central Office was built in Karachi but Head Office remaining at Shah Chiragh Building,
Lahore.
16 new branches were opened in 1967 and 20 in 1968. Respectively their funds were increased
gradually. 21 new branches were opened in 1971. But separation time the 51 branches were lost by the
bank which was a big loss.
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Strategic Management
ALLIED BANK: PUBLIC SECTOR YEARS (1974-91)
Under the Nationalization Act of 1974, 14 scheduled banks were taken over by the Government.
Australasia Bank’s Board of Directors was dissolved and the bank was renamed as Allied Bank of
Pakistan Limited. Sarhad Bank, Lahore Commercial Bank and Pakistan Bank Limited were merged into
Australasia Bank. At time of merge, ABL was second highest among all the banks Nationalized in 1974.
Allied Bank’s first Executive Board was constituted of Mr. Iqbal A. Rizvi as President, Mr. Ajmal Khalil as
Joint President and Mr. Khadim Hussain Siddique as member. In 1974 Mr. I.D. Junejo and Mr. Safdar
Abbas Zaidi joined the Board later. 116 new branches were opened in 1974 and it started participation
in commodity Operation program of Government.
In 1970’s Bank played an important part of agricultural area loans and other loans. In 1976 Mr. Ajmal
replaced Mr. Rizvi as Chief Executive and President. During 1974-77, 361 new branches were opened
and 230 of these were located in villages and small towns. It also opened its foreign branch in London,
near the Bank of England. In 1980 the Bank of England granted Allied Bank recognition as a full fledge
Bank under the U.K. Banking Act.
In 1981, President was changed. In 1984, again new president was come to know. He tries to increase
the international business. It also initiated a major counter program. In 1985, mainframe computer was
installed and effective management system was developed. During this period profitability was
increased. New President Mr. Maqbool introduced different schemes in 1987-88. In 1989, new 13
branches were installed.
Over 1991, 745 branches were there in all over the Pakistan.
A NEW BEGINNING
In November/ December 1990, the Government announced its commitments to the rapid privatization
of the Banking sector. Allied Bank’s management under the leadership of Mr. Khalid Latif decided to
react positively to this challenge. In September 1991, ABL entered in a new era of its history as world’s
first bank to be owned and managed by its employees. The 850 executives and 7200 staff members
spread over 800 branches throughout the Pakistan established a high degree of cooperation and family
feelings
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Strategic Management
Allied bank Objectives:
Allied bank has following objectives:
Main objective of Allied bank is to earn profit.
To provide services to their customers and assistance in the development of commerce and
trade.
Allied bank also have another responsibility to give service to their communities. It watches the growth
and development of his community especially the commerce and business of the area.
Vision, Mission & Values
Vision
To become a dynamic and efficient bank providing integrated solutions in order to be the
first choice bank for the customers.
Mission
To provide value added services to our customers
To provide high tech innovative solutions to meet customers
Requirements.
To create sustainable value through growth, efficiency and diversity
for all stakeholders
To provide a challenging work environment and reward dedicated
team members according to their abilities and performance
To play a proactive role in contributing towards the society
Core Values
Integrity
Excellence in service
High performance
Innovation and growth
Page 9 of 30 Mohammad Ali Jinnah University
Strategic Management
SWOT ANALYSIS:SWOT Analysis is the abbreviation of for words:
S _ STRENGTH
W_ WEAKNESS
O_ OPORTUNITIES
T_ THREATS
StrengthsNETWORK OF 757 BRANCHES
Allied bank has a large number of branches 757. It has one of the largest networks all over Pakistan. All
of its branches are interlinked through an online system. And most of its branches are doing a very good
business and earning a lot of profit.
ONLINE FACILITY
ABL is providing an online facility to its customers, through this facility customers can send or transfer
cash or cheques to any other account in any other branch of ABL within seconds. It also provides the
facility of cash withdrawal and balance inquiry from a certain account of any other branch of ABL
through cheques.
SECURE BANKING
The online banking facility provides less chances of fraud. Because the receipts of any online transaction
are given to customers at the time transaction takes place and also can be checked any time. To make it
much more secure the NIC copy of the person is also submitted at the time of online transaction but
those customers who also have their accounts in the same branch do not need to submit the copy of NIC
as their copy is already attached with their account opening forms.
FOREIGN CURRENCY
ABL also provides its customers the facility of foreign exchange; people can also open their accounts in
foreign currency. Customers are also given the facility of money exchange on current rates. The head
office also provides the foreign currency account holders the facility of the current rates of foreign
Page 10 of 30 Mohammad Ali Jinnah University
Strategic Management
exchange through fax facility. The bank also provides the facility of letter of credit and export/import
facility to the customers.
VARIETY OF PRODUCTS
ABL provides a variety of products to its customers. ATM, DD, TT, PO, CREDIT CARDS, TRAVELERS
CHEQUE are its main products. Customers have a lot of variety of accounts; they can invest in any
account of their choice keeping in view that are they salaried persons, businessmen, or students etc. It
also gives the facility of collection of amounts to its customers.
LOCKERS FACILITY
ABL provides the facility of lockers in its all branches. It is one of those banks which is offering this facility
in all of its branches.
CUSTOMER CARE CENTRE
ABL also provides the customer care centre facility to its customers. ABL has a toll free number on which
the customers can call anytime, its free of cost , so that customers can contact the bank whenever they
need any sort of help or guidance.
SAME ACCOUNT NUMBER FACILITY
At Allied bank the customers the person who has more than one account can have the facility of the
same account number only the suffix is changed. This facility provides the customer with easy
remembering of the account number.
ACCOUNT OPENING
At Allied bank it’s very easy to open an account just an introducer and a copy of NIC is required.
Customer just needs to fill up account opening forms and can enjoy the facilities of any type of account
the want. This is the strength of Allied bank facilitates all of its customers.
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PAID LEAVES
The employees can avail the one month leave facility in an year and 36 medical leaves per year with full
salary so that its employees can have some relaxation.
SUPPORTIVE ENVIRONMENT
ABL provides its customers a very supportive environment, customers are given the foremost priority,
even the staff helps all of its colleagues and all staff members like to share the workload with their
colleagues.
LOW INTEREST RATES
To encourage people to do business with ABL, it gives loans to its customers on very low interest rates.
EMPLOYEES’ REPLACEMENT
In every branch of Allied bank the back up of every employee is there in case of emergency if some
officer is not available at the bank, some other person will back him up. That person is always well
familiar with the responsibilities of that officer.
SECURE ENVIRONMENT
Cameras are installed in all the branches of the bank to ensure security of its customers and employees.
Also security guards are available through out the day. Cameras are installed in front of the cash
counters. These cameras are switched on all the time. The branch manager can see all the activities
while sitting in his office on a display monitor. If some thing goes wrong then the manager can buzz the
security alarm immediately
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WEAKNESSESS
LATE PROMOTIONS
Against the schedules specified by the bank, employees are promoted after a long period of time. And
from my view its one of the biggest weaknesses of ABL.
LOW PRODUCT CREDIBILITY
Allied Bank has still not got the edge where the consumers become loyal to its products and services.
Mostly customers become its customers out of no reason than request from a personal banker. And
talking about consumer banking, though credit cards awareness in our middle class society has gradually
improved but not up to the point where they can compare the features that one Bank is offering and
other is not. Truth must be said, most customers do not even know the points behind the term “interest
free days”. The point is, consumers do not know of the product being offered so how can they rely on
the product.
MANUAL WORK
ABL is still relying on a lot of manual work. As compared to other banks now a days ABL is still
using a lot of manual work instead of software’s. Most of its recording are kept in form of hard
copies and maintained by its employees in manuals. It really takes a lot of time and efforts for
maintaining the data manually.
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Strategic Management
OPPORTUNITIES
ABL is working mostly in corporate sector and its basically missing a big share of consumer
banking. If ABL over comes this point, then it can become of the biggest bank of Pakistan. By
improving itself in consumer banking it can really earn huge amount of profits and can emerge
as the top most bank of our country.
Today there is a demand for Islamic Banking .
ABL has also ignored the sector of car financing, which is a very important financing nowadays.
Many people nowadays buy cars through car financing but ABL does not have this facility. If it
starts car financing then definitely many people will get attracted towards this scheme and
definitely ABL will be able to earn a lot as well and many customers will also get attracted in this
way.
The policies of the new government to uplift the economy and pursue financial sector reforms
are expected to yield positive results in the banking industry of the country. The ABL is very well
praised to avail promising opportunities.
E-banking facility is also a new opportunity which is a successful business in foreign countries
and can also be here, if HBL takes the initiatives.
As a result of the different steps taken by the Government regarding the betterment of the
economy, small borrowers are attracted to get the financing and start small businesses. So, the
ABL has an opportunity to attract the customers by giving them attractive schemes.
They have wide area network in all over the Pakistan, if ABL can make it possible the fast
delivery of fund from abroad through online banking, it can cover the major market of Pakistan
which still is capturing by ‘Hundi’.
Page 14 of 30 Mohammad Ali Jinnah University
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Threats COMPETITORS
The main competitors of ABL are BANK AL-FALAH, FAYSAL BANK, MCB. Due to tuff competition with these banks ABL is forced to sanction loans at less interest rates, so that to attract the customers. And because of these low rates it earns less. The threat of these competitors is a very big hurdle in the way of success of ABL.
POLITICAL INSTABILITY
Due to continuous political instability in the country the foreign exchange accounts and overall growth of financing sectors has really declined a lot.
CHARGES BY GOVERNMENT
Government has increased the taxes and charges on all the services of finance and banking sector, because of these increased charges ABL has to increase the charges on every service to the customers, which is really affecting the working of ABL and all other banks as well. As government keeps on revising the taxes on continuous basis ,which is not at all in the interest of the banking sector.
Diminishing business sector
Sudden fall in the trade, industrial sector and stock exchange market has also adversely affected the working of banks a lot. Decreased per capita income, unemployment, inflation, un favorable balance of trade recession and boom are the source to the slow progress of the banking sector.
Page 15 of 30 Mohammad Ali Jinnah University
Strategic Management
STAGE 1
THE INPUT STAGE
External Factor Evaluation (EFE) Matrix
Competitive Profile Matrix (CPM) Matrix
Internal Factor Evaluation (IFE) Matrix
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Strategic Management
STAGE 1: THE INPUT STAGE
External Factor Evaluation (EFE) Matrix
Total weighted score of 2.81 indicates that the Bank has more than above average it
Page 17 of 30 Mohammad Ali Jinnah University
Key External Factors Weight RatingWeighted Score
Opportunities:
1. Increase demand for Islamic Banking. 0.12 4 0.48
2. Consumer Banking 0.1 3 0.3
3. Customer Services 0.08 3 0.24
4.Modern Banking System 0.1 3 0.3
5. E- Banking 0.1 4 0.4
Threats:
1. Regulations by government 0.12 2 0.24
2. Inflation & increased Taxation 0.09 3 0.27
3. Increased Interest Rates 0.13 2 0.26
4. Diminishing business sector 0.1 2 0.2
5. Political Instability 0.06 2 0.12
TOTAL 1 2.81
Strategic Management
Competitive Profile Matrix (CPM)The competitive profile matrix identifies ABL major competitors and its strength and weakness in relation with the HBL strategic position. The critical success factors in a CPM show the both major internal and external strength and weakness of the ABL. Therefore the ratings refer to strength and weakness where 4= major strength, 3= minor strength, 2=minor weakness, 1= major weakness. In CPM, we rating the total weight score for the competitors and compare it with ABL.
ABL MCB UBL
Critical Success Factors Weight Rating
Weighted Score Rating
Weighted Score Rating
Weighted Score
Management 0.1 4 0.4 4 0.4 3 0.3
Information 0.18 3 0.54 2 0.36 3 0.54
Technology
Product & 0.1 3 0.3 3 0.3 2 0.2
Services
Market 0.09 3 0.27 3 0.27 3 0.27
Segmentation
Market 0.13 3 0.39 3 0.39 2 0.26
Share
Customer 0.12 3 0.36 3 0.36 3 0.36
Loyalty
Domestic & 0.06 3 0.18 3 0.18 3 0.18
Global Expansion
Location of 0.05 3 0.15 3 0.15 3 0.15
Facility
Advertising 0.05 2 0.1 3 0.15 3 0.15
E-Commerce 0.12 1 0.12 2 0.24 3 0.36
TOTAL 1 2.81 2.8 2.77
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Strategic Management
Internal Factor Evaluation (IFE) MatrixWe have identified the following strength and weakness in the IFE matrix. The highest weighted score for an organization can range from low 1.0 to high 4.0 .The average total weighted score is 2.81. If the total weighted score is above 2.5 it indicate that strong internal position and if it is below 2.5 it show the weak internally. So the weighted score shows that the ABL is strong internally and has capability to overcome the weaknesses.
Page 19 of 30 Mohammad Ali Jinnah University
Key Internal Factors Weight RatingWeighted Score
Strengths:
1. Network of 757 branches 0.13 4 0.52
2. Variety of products 0.09 3 0.27
3. Secure environment 0.1 3 0.3
4. Customer care centre 0.1 3 0.3
5. Supportive environment 0.12 3 0.36
Weaknesses:
1. Late promotions 0.08 3 0.24
2. Low product Credibility 0.06 3 0.18
3. Manual Work 0.06 2 0.12
4. Lack Of Functional Setup 0.14 2 0.28
5. Level of customer satisfaction 0.12 2 0.24
TOTAL 1 2.81
Strategic Management
STAGE 2
THE MATCHING STAGE
TOWS Matrix
SPACE Matrix
SPACE Matrix
IE Matrix
TOWS Matrix for ABL
Strengths – S Network of 757 branches
Variety of products
Secure environment
. Customer care centre
Supportive environment
Weaknesses – W
Late promotions
Low product Credibility
Manual Work
Lack Of Functional Setup
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Strategic Management
Level of customer satisfaction
Opportunities – O
Increase demand for Islamic Banking
Consumer Banking Customer Services Modern Banking System E- Banking
SO Strategies WO Strategies
Threats – T
Regulations by government Inflation & increased Taxation Increased Interest Rates Diminishing business sector Political Instability
ST Strategies WT Strategies
TOWS Matrix
The purpose of TWOS matrix is to match the internal and external factors and formulate the strategy
according to the requirement of the company. This matrix is a helpful tool for manager to develop four
types of strategies.
SO (Strength, Opportunities) strategies,
WO (Weakness, Opportunities) strategies,
ST (Strength, Threats) strategies,
WT (Weakness, Threats) strategies.
Page 21 of 30 Mohammad Ali Jinnah University
Strategic Management
SPACE Matrix
Financial Strength rating is 1 (worst) to 6 (best) Ratings
1 ROA 4
2 Leverage 5
3 Liquidity 5
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Strategic Management
4 Debt-asset ratio 4
5 Cash flows 5
23
Industry Strength rating is 1 (worst) to 6 (best)
1 Barriers to entry 6
2 Growth potential 4
3 Access to financing 3
4 Consolidation 5
18
Environmental Stability rating is -1 (best) to -6 (worst)
1 Inflation -5
2 Technology -6
3 Demand -5
4 Technological advance -3
5 Risk involved in Business -3
-22
Competitive advantage rating is -1 (best) to -6 (worst)
1 Product quality -1
2 Market share -2
3 Brand and image -1
4 Large number of Corporate Clients like MNC's -2
5 PLC -2
-8
Conclusion:
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ES Average is -22/ 5 = -4.4 FS Average is 23 / 5 =4.6
CA Average is -8 / 5 =-1.6 IS Average is 18 / 4 =4.5
Directional Vector Coordinates x-axis: -1.6+(+4.5) = 2.9
y-axis: -4.4+(+4.6) = 0.2
ABLshould pursue Aggressive Strategies
ABL should pursue Aggressive Strategies
FS
Page 24 of 30 Mohammad Ali Jinnah University
High1.0
Medium050
Low0.0
High+20
Relative Market Share Position
Industry SalesGrowth rate
Stars ? Mark
Strategic Management
Conservative6
Aggressive
5
4
3
2
CA 1 IS
-6 -5 -4 -3 -2 -1 1 2 3 4 5 6
-2
-3
-4
-5
-6
Defensive ES Competitive
Interpretation
Directional vector of ABL is located in aggressive quadrant (upper-right quadrant). It shows that the ABL has excellent position to use its strengths, take advantage of external opportunities, overcome internal weaknesses, and avoid external threats. Therefore, market penetration, market development, product development, backward integration, forward integration, horizontal integration, conglomerate diversification, concentric diversification, horizontal diversification, or a combination strategy can be feasible according to specific circumstances.
ABL is a strong firm that has achieved major competitive advantages in a growing and stable industry.
BCG Matrix
Page 25 of 30 Mohammad Ali Jinnah University
(2.9,0.2)
Strategic Management
Interpretation:
ABL lies in the Cash Cows Quadrant, which represents the organization’s mature market and opportunities for growth and near to Star.
Grand Matrix
Page 26 of 30 Mohammad Ali Jinnah University
ABL
Rapid Market Growth
4.0
3.0 2.0 1.0
High3.0 TO 4.0
Strong3.0 TO 4.0
Average2.0 to 2.99
Weak1.0 to 1.99
I II III
Grow and Build
THE IFE TOTAL WEIGHTED SCORES
THE IFE TOTAL WEIGHTED SCORES
Strategic Management
Interpretation
ABL falls in the first quadrant of the Grand Strategy Matrix. ABL is in excellent strategic position. Continuous concentration on the current market (Market Development, Market Penetration) and products (Product Development) is an appropriate strategy.
ABL is also working on the forward and concentric diversification. Is has its own distribution channel. And now it is also growing itself in the banking industry by diversifying its services and introducing many other SBU’s.
IE Matrix
Page 27 of 30 Mohammad Ali Jinnah University
Weak
Competitive Position
Slow Market Growth
Quadrant II Quadrant I (ABL)
1. Market Development2. Market Penetration3. Product Development4. Forward Integration5. Concentric Diversification
Quadrant III Quadrant IV
Strong
Competitive
Position
Strategic Management
Interpretation:
ABL falls in the hold in maintain strategies because the EFE score was 2.81 and IFE score was
also 2.81. ABL lies in the 5th quadrant. Market penetration and product development are two
commonly employed strategies for this quadrant.
Page 28 of 30 Mohammad Ali Jinnah University
Strategic Management
STAGE 3
THE DECISION STAGE
Strategy Evaluation Decision Matrix
Strategy Evaluation Decision Matrix:
Strategy Evaluation Decision Matrix
Page 29 of 30 Mohammad Ali Jinnah University
Strategic Management
Have Major Changes Have Major Changes Have the firm
progressed
Results occur in the firms
internal occur in the firms
Externalsatisfactory towards
acting
strategic position strategic positioninternal strategic
objective
No No No Take Corrective Actions
Yes Yes Yes Take Corrective Actions
Yes Yes No Take Corrective Actions
Yes No Yes Take Corrective Actions
Yes No No Take Corrective Actions
No Yes Yes Take Corrective Actions
No Yes No Take Corrective Actions
No No YesContinue with a strategic
course
Page 30 of 30 Mohammad Ali Jinnah University
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