1 strategic mgt in banks revised

8/13/2019 1 Strategic Mgt in BANKS Revised

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STRATEGIC MANAGEMENT IN BANKS

Ashraf Al MamunAssociate Professor, BIBM


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is the :

-Pattern of organizational moves and

-Managerial approaches to

(i)achieving organizational objectives

(ii)pursuing an organizationsmission

Hence Strategic Management in Bank refers to effective

and efficient process of a Banks:

Formulation of Vision and Mission

Setting Objectives and Goals Crafting a Strategy

Implementation and Execution of Strategy

Evaluation, Reviewing and Adjustments in

Strategy

Strategy


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Strategic Decisions in Banks

Major financial or other resource implications

Involve a significant amount of change in theorganization and its business

affect the whole organization or a large part of it

Constrains or commits the organization in significantrespects for a long period of time

Major impact outside the organization

significant risks to the business

Related to other important decision areas, and raisesissues of complexity and 'cross-cutting' interactions

Difficult or impossible to reverse the consequences ofthe decision.


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Strategy Implementation

Corporate

Governance

Strategy Formulation

Strategic

Competitiveness

Above-Average

Returns

Strategic Intent

Strategic Mission

The External

Environment

The Internal

Environment

The Strategic

Management

Process

Feedback

StrategicInputs

StrategicActions

Str

ategicOutcomes

Corporate-

Level Strategy

Cooperative

Strategy

Competitive Rivalry

and Competitive

Dynamics

International

Strategy

Business-Level

Strategy

Acquisition and

RestructuringStrategies

Organizational

Structure,

Controls and

Culture

Strategic

Leadership


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Crafting a strategy

Shaping the chosen strategy to fit in the organization

Strategic Management Process:

Operational Level StrategyExecut ives

Functional Level StrategyLine Managers/Supervisors

Business

Level StrategyGeneral Managers

Head o f Div is ions

Corporate Level StrategyCEO & Top Executives


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External Environment and Strategy

Industry Analysis:

Dominant Economic Characteristics of the Industry

Driving Force

Growth Rate

Product Innovation

Technological Advantages / I T Base

Cost and Efficiency

Globalization

Regularity and Political Influence

Changing societal concerns, attitudes and life style


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Strategic Group Map of Some PCBs in the

Banking Industry


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External Environment and Strategy [cont. . . ]

Competitive Force Analysis:

Bargaining Power of

Suppliers:

Depositors

Threat of substitutes:

NBFIs

Rivalry among

existing competitors

Existing Banks

Bargaining Power of

Buyers:

Borrowers

Threat of New Entry

New Banks


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SWOT Analysis:

Strength

Internal Capabilities

Specialization

Resources

Low cost of fund

Weakness

IncapabilityInefficiency

Lack of knowledge

High cost of fund

Lack of skilled manpower

Opportunity

Unattended market needs

Tie-up with other banks/organisations

Threats

Increasing competition

Change in regulations


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SWOT/TOWS Matrix

SW

O

T

Turnaround Plan Aggressive Expansion

DiversifyRebuild or Exit


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Implementing Strategy

Strategy should be implemented in a manner that fits

organizations situation

Steps are:

-Building an organization capable of executing the strategy

-A strategy supportive Budget

-Devising reward incentive that are linked with objectives

and strategy

-Shaping the corporate culture to fit the strategy

-Executive strategic leadership


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Implementing Strategy

Establishing Corporate Culture

Ethical standard and Values

Being Responsive and Innovative

Building a spirit of High Performance into Culture

The Capable Leadership


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Many Thanks.

1 strategic mgt in banks revised

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