Strategic Management

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


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



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.



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



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



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.



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.



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



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



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



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.



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



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.



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’.



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.



STAGE 1

THE INPUT STAGE

External Factor Evaluation (EFE) Matrix

Competitive Profile Matrix (CPM) Matrix

Internal Factor Evaluation (IFE) Matrix



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


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


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



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.


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


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



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.



SPACE Matrix

Financial Strength rating is 1 (worst) to 6 (best) Ratings

1 ROA 4

2 Leverage 5

3 Liquidity 5



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:



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


High1.0

Medium050

Low0.0

High+20

Relative Market Share Position

Industry SalesGrowth rate

Stars ? Mark


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


(2.9,0.2)


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


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


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


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


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.



STAGE 3

THE DECISION STAGE

Strategy Evaluation Decision Matrix

Strategy Evaluation Decision Matrix:

Strategy Evaluation Decision Matrix



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


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Strategic Management