Objective of the Study

The objective of the study is to identify the strategies Private Commercial Banks in Bangladesh use to market their products. At the same time the paper focuses to gain an understanding on issues that are important for developing marketing strategies for financial services. We have analyzed the relative position, pricing strategies, promotional activities etc. of the selected Private Commercial Banks operating in Dhaka city to identify their position in the market and the competitive situation as well.

Introduction

Strategic planning is a management tool, period. As with any management tool, it is used for one purpose only: to help an organization do a better job - to focus its energy, to ensure that members of the organization are working toward the same goals, to assess and adjust the organization's direction in response to a changing environment. In short, strategic planning is a disciplined effort to produce fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. (Adapted from Bryson's Strategic Planning in Public and Nonprofit Organizations).

A word by word dissection of this definition provides the key elements that underlie the meaning and success of a strategic planning process: The process is strategic because it involves preparing the best way to respond to the circumstances of the organization's environment, whether or not its circumstances are known in advance; nonprofits often must respond to dynamic and even hostile environments. Being strategic, then, means being clearr bout the organization's objectives, being aware of the organization's resources, and incorporating both into being consciously responsive to a dynamic environment.

The process is about planning because it involves intentionally setting goals (i.e., choosing a desired future) and developing an approach to achieving those goals. The process is disciplined in that it calls for a certain order and pattern to keep it focused and productive. The process raises a sequence of questions that helps planners examine experience, test assumptions, gather and incorporate information about the present, and anticipate the environment in which the organization will be working in the future.

Finally, the process is about fundamental decisions and actions because choices must be made in order to answer the sequence of questions mentioned above. The plan is ultimately no more, and no less, than a set of decisions about what to do, why to do it, and how to do it. Because it is impossible to do everything that needs to be done in this world, strategic planning implies that some organizational decisions and actions are more important than others - and that much of the strategy lies in making the tough decisions about what is most important to achieving organizational success.

The strategic planning can be complex, challenging, and even messy, but it is always defined by the basic ideas outlined above - and you can always return to these basics for insight into your own strategic planning process.

Company Profile

AB Bank Limited, the first private sector bank was incorporated in Bangladesh on 31st December 1981 as Arab Bangladesh Bank Limited and started its operation with effect from April 12, 1982.

AB Bank is known as one of leading bank of the country since its commencement 27 years ago. It continues to remain updated with the latest products and services, considering consumer and client perspectives. AB Bank has thus been able to keep their consumers and clients trust while upholding their reliability, across time.

During the last 27 years, AB Bank Limited has opened 77 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited. To facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the World.

In spite of adverse market conditions, AB Bank Limited which turned 27 this year, concluded the 2008 financial year with good results. The Banks consolidated profit after taxes amounted to Taka 230 cr which is 21% higher than that of 2007. The asset base of AB grew by 32% from 2007 to stand at over Tk 8,400 cr as at the end of 2008.

The Bank showed strong growth in loans and deposits. Deposit of the Bank increased by Tk. 1518 cr i.e., 28.45% while the diversified Loan Portfolio grew by over 30% during the year and recorded a Tk 1579 cr increase. Foreign Trade Business handled was Tk 9,898 cr indicating a growth of over 40% in 2008.

The Bank maintained its sound credit rating in 2008 to that of the previous year. The Credit Rating Agency of Bangladesh Limited (CRAB) awarded the Bank an A1 rating in the long term and ST-2 rating in the short Term.

AB Bank believes in modernization. The bank took a conscious decision to rejuvenate its past identity an identity that the bank carried as Arab Bangladesh Bank Limited for twenty five long years. As a result of this decision, the bank chose to rename itself as AB Bank Limited and the Bangladesh Bank put its affirmative stamp on November 14, 2007.

The Bank decided to change its traditional color and logo to bring about a fresh approach in the financial world; an approach, which like its new logo is based on bonding, and trust. The bank has developed its logo considering the contemporary time. The new logo represents our cultural SHEETAL PATI as it reflects the bonding with its clientele and fulfilling their every need. Thus the new spirit of AB is Bonding. The Logo of the bank is primarily red, as red represents velocity of speed and purity. Our new logo innovates, bonding of affiliates that generate changes considering its customer demand. AB Bank launched the new Logo on its 25th Anniversary year.

AB Bank commits to nation to take a lead in the Banking sector through not only its strong financial position, but also through innovation of products and services. It also ensures creating higher value for its respected customers and shareholders. The bank has focused to bring services at the doorstep of its customers, and to bring millions into banking channels those who are outside the mainstream banking arena. Innovative products and services were introduced in the field of Small and Medium Enterprise (SME) credit, Womens Entrepreneur, Consumer Loans, Debit and Credit Cards (Local & International), ATMs, Internet and SMS Banking, Remittance Services, Treasury Products and Services, Structured Finance for Corporate, strengthening and expanding its Islamic Banking activities, Investment Banking, specialized products and services for NRBs, Priority Banking, and Customer Care. The Bank has successfully completed its automation project in mid 2008. It envisages enabling customers to get banking services within the comfort of their homes and offices.

AB Bank has continuously invests into its biggest asset, the human resource to drive forward with its mission to be the best performing bank in the country. The bank has introduced Dress Code for its employees. Male employees wear designed ties and females wear Sharee or Salwar Kamiz, all the dresses are consisted with the unique AB Bank logo.

AB is recognized as the peoples choice, catering to the satisfaction of its cliental. Their satisfaction is ABs success.

Corporate Information

Company name & logo

Legal Form: A public limited company incorporated on 31st December, 1981 under the Companies Act, 1913 and listed in the Dhaka Stock Exchange Ltd and Chittagong Stock Exchange Ltd.

Commencement of Business27th February 1982

Registered OfficeBCIC Bhaban, 30-31, Dilkusha C/ADhaka 1000, Bangladesh.Tel: +88-02-9560312Fax: +88-02-9564122, 23SWIFT: ABBLBDDHE-mail: info@abbank.com.bdWeb: www.abbank.com.bd

Strategic Planning Process

The Main Components of the Strategic Planning Process

Mission & Vision

Mission

A company's mission is its reason for being. The mission often is expressed in the form of a mission statement, which conveys a sense of purpose to employees and projects a company image to customers. In the strategy formulation process, the mission statement sets the mood of where the company should go.

Objectives

Objectives are concrete goals that the organization seeks to reach, for example, an earnings growth target. The objectives should be challenging but achievable. They also should be measurable so that the company can monitor its progress and make corrections as needed.

Vision & Mission of AB Bank Limited

Vision Statement"To be the trendsetter for innovative banking with excellence & perfection"Mission Statement"To be the best performing bank in the country"

2

STRATEGIC MANAGEMENT

Organ gram of AB Bank Limited.

Organ gram of AB Bank Limited.

Strategic Managers for All Levels

Strategic Managers for All Levels of AB Bank Limited are shown below:

(Corporate Level) (Functional level) (Business Level)

(FIG: Strategic Managers for All Levels)

SWOT

SWOT analysisis a strategic planning method used to evaluate theStrengths,Weaknesses,Opportunities, andThreats involved in aprojector in abusinessventure. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited toAlbert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data fromFortune 500companies.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning, including SWOT andSCAN analysis, has been the subject of much research.

Strengths: attributes of the person or company that is helpful to achieving the objective(s).

Weaknesses: attributes of the person or company that is harmful to achieving the objective(s).

Opportunities:externalconditions that is helpful to achieving the objective(s).

Threats:externalconditions which could do damage to the objective(s).

Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs.

SWOT (Strength, Weakness, Opportunities, Threats)

(W (Weakness)Limited resources for staff developmentFiscal uncertaintyLimited Debit & credit Card Facility Limited banking productCustomer Support is not up to the mark)

(S (Strength)Good ReputationBrand nameOnline banking transactionFirst generation bankBank Ratting (AA3 )Basel II Compliance ) (SWOT analysis of AB Bank Limited) (O (Opportunities)Better Customer service will be benefited the company.Syndication loan.Take short time to complete Loan procedure.Know Your Customer (KYC) Compliance.Faster Remittance Payment.Providing deferent types of loan.Properly Online Support.Provide Debit and Credit Card Support.Support for Utility bill payment.) (T (Threats)Bangladesh bank Compliance Inability to compete for qualified skilled peopleElectricity problem over the country. Political unstable)

BCG Matrix

The BCG matrix model is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's.

The BCG matrix or also called BCG model relates to marketing. The BCG model is a well-known portfolio management tool used in product life cycle theory. BCG matrix is often used to prioritize which products within company product mix get more funding and attention.

The BCG model is based on classification of products (and implicitly also company business units) into four categories based on combinations of market growth and market share relative to the largest competitor.

(High Relative Market Share Low)

(Low Market Growth rate High)

(Question Mark) (Start)

(DOG) (Cash Cow)

(BCG Matrix)Stars

Stars generate large sums of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate. So the cash being spent and brought in approximately nets out. If a star can maintain its large market share it will become a cash cow when the market growth rate declines.

Question Marks

Question marks are products that grow rapidly and as a result consume large amounts of cash, but because they have low market shares they dont generate much cash. The result is large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If it doesnt become a market leader it will become a dog when market growth declines. Question marks need to be analyzed carefully to determine if they are worth the investment required to grow market share.

Dogs

Dogs have a low market share and a low growth rate and neither generates nor consumes a large amount of cash. However, dogs are cash traps because of the money tied up in a business that has little potential. Such businesses are candidates for divestiture.

Cash Cows

As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate so they generate more cash than they consume. These units should be milked extracting the profits and investing as little as possible. They provide the cash required to turn question marks into market leaders.

Fig: Yearly Profit Graph

Year

Profit TK in milion

2004

360

2005

755

2006

211

2007

3325

2008

4298

2009

5802

In the above information we were analysis the company position of the market. Every year the profit margin of the company is growing rapidly. This type of growing shows the BCG matrix analysis is star.

Stars, the last years businesses represent the organizations best long run opportunities for growth and profitability. Divisions with a high relative market share and a high industry growth rate should receive substantial investment to maintain or strengthen their dominant positions. Forward, backward and horizontal integration; market penetration; market development; product development; and joint ventures are appropriate strategies for these divisions to consider.

Corporate-Level Strategies

Corporate level strategy covers the strategic scope of the organization as a whole. For most organizations the corporate level strategy is the only strategic plan required.

Often corporate level strategy is simply referred to as corporate strategy, or in unified companies the corporate business strategy.

The process that produces it is called corporate strategic planning, or sometimes simply corporate planning.

In a few situations however, it may be justified to speak of corporate level strategy to distinguish it from other kinds of planning.

In AB Bank Limited follows the corporate level strategy like,

Priority Banking

SME Banking

Remittance zone

Business Banking

Corporate loan, syndicate loan, etc.

Business-Level Strategies

Business-level strategies are similar to corporate-strategies in that they focus on overall performance. As distinct from corporate-level strategy, however, they focus on just one instead of a range of businesses. The corporate level strategy of a multi division operation is like a strategy for managing an investment portfolio.

AB Bank Limited usually individual enterprise-like entities oriented toward a particular industry, product or service type, and or market. Business-level strategies are thus primarily concerned with:

1. Managing unit activities so they conform to organizational corporate level strategies, sometimes including cooperation with other business units to achieve strategic synergy.

2. Developing distinctive capabilities, resources and competitive advantage in each unit.

3. Identifying product or service-market opportunities and developing strategies for succeeding in each.

4. Monitoring the business industry environment so that strategies conform to the needs of the markets at the current stage of development.

Functional-Level Strategies

Functional-level strategies are concerned with managing the functional areas of the organization, such as product or service development and design, marketing and sales, finance, human resources, production, research and development, etc., so that each function upholds contributes to individual business unit strategies and the overall corporate-level strategy.

Functional strategies are primarily concerned with:

Efficiently deploying specialists within the functional area.

Integrating activities within the functional area

Making sure that functional strategies link effectively and efficiently with business strategies and the overall corporate-level strategy.

Conclusion

Strategies for an organization may be classified by the level of the organization responsible for the strategy. Corporate-level strategies concern top management and address strategic issues of facing the organization as a corporate whole.

Business-level strategies deal with major business units or divisions of the corporate portfolio. Business-level strategies are generally developed by upper and middle-level business unit managers, in negotiation on key targets with the top corporate managers, and are intended to help the organization achieve its corporate level strategy.

Functional or business process strategies address issues usually faced by lower-level managers and deal with strategies for the major organizational functions such as marketing, finance, production, and research, which are considered important to achieving the business strategies and enabling the corporate-level strategy.

Reference

http://abbank.com.bd/abbl-at-a-glance.html

http://abbank.com.bd/background-of-abbl.html

AB Bank Limited, Audit Report of 2010

http://abbank.com.bd/vision-mission.html

Profit (Taka in milion)

Profit TK in milion

200420052006200720082009360755211332542985802

Profit (Taka in milion)

Profit TK in milion200420052006200720082009360755211332542985802

Mission and Goal

SWOT

Internal Analysis

Strengths &

Weaknesses

External Analysis

Opportunities &

Threats

Functional Level

Strategy

Business Level

Strategy

Global Level

Strategy

Corporate Level

Strategy

Mission and Goal

SWOT

Internal AnalysisStrengths & Weaknesses

External AnalysisOpportunities & Threats

Functional Level Strategy

Business Level Strategy

Global Level Strategy

Corporate Level Strategy

Managing Director

DMD (Operations)

AMD (Merchant

banking)

Head Of IT

DMD (CRM)AMD

(General Banking)

Head Of GSSP

Head of HRM

Head of MBWHead of RBDHead of RAMHear of CRM

HRADMINNOCEBS & EBASMEABBFCARD

Managing Director

DMD (Operations)

Head Of GSSP

AMD (Merchant banking)

DMD (CRM)

Head Of IT

AMD (General Banking)

Head of HRM

Head of MBW

Head of RBD

Head of RAM

Hear of CRM

ADMIN

NOC

HR

EBS & EBA

SME

ABBF

CARD

Board Of Director

Management

Committee

Division Head

Department Head

Team Title

Company Name

Company NameDepartment Name

Board Of Director

Management Committee

Division Head

Department Head