Report on Strategic Management of

Dutch Bangla Bank-Rocket

Submitted to:
Yurika Uematsu Bhuiyan
Lecturer, North South University.

Submitted by: “MAVENGERS”

Md.Ismail Hossain ID# 1130195630
Aniruddha Sen ID# 1231174030
Md.Taohidunnobi ID# 1231182630
Akash Saha ID# 1410318030
Nihad Jahan ID# 1410595030
Imran Khan ID# 1411189030
Sanzida Afrin ID# 1421820630

Date of Submission: 31 August, 2018

 Acknowledgement

First of all, we are grateful to the Almighty for giving us the fearlessness and assurance capacity

to finish the assignment effectively. We are colossally thankful to our course teacher Yurika

Uematsu Bhuiyan for his steady consolation, support, and direction that gave us the certainty to

work for the assignment adequately. We additionally get a kick out of the chance to demonstrate

our appreciation towards for conveying a nature of data to finish this venture.

At long last, we might want to praise each other for the magnificent collaboration and

comprehension among ourselves and finish the project effectively. We learned numerous things

around an association's enrollment, choice process, preparing and advancement while dealing with

this task. This work has helped us to increase some information and presented us to some

fascinating actualities.

With regards,

Team Mavengers

Md.Ismail Hossain ID# 1130195630

Aniruddha Sen ID# 1231174030

Md.Taohidunnobi ID# 1231182630

Akash Saha ID# 1410318030

Nihad Jahan ID# 1410595030

Imran Khan ID# 1411189030

Sanzida Afrin ID# 1421820630

 Letter of Transmittal

Yurika Uematsu Bhuiyan

School of Business and Economics

Dept. of Management, North South University

Subject: Letter of Transmittal

Dear Mam

It is to be sure a joy for us to have the capacity to hand over the result of our hardship of the

Strategic Management report on “Rocket-Dutch Bangla Bank Ltd.”. This report is the aftereffect

of the learning which has been gained from the MGT489 course.

We attempted our level best to prepare this report. The data of this report is essentially in view of

Internet data. Some different points of interest were assembled from the management department

of DBBL. Every one of us gave our hundred percent for influencing this answer to meet up.

We, intensely trust that you will discover this arrangement worth perusing. It would be ideal if you

feel free for any inquiry or illumination that you might want us to clarify.

Saying thanks to you for your collaboration.

Sincerely,

Team Mavengers
 Executive Summary

Rocket is mobile payment joint venture in Bangladesh between Dutch Bangla Bank Limited

(DBBL). The company intends to leverage the distribution network of its partners and work with

mobile network operators to offer a mobile payment Platform that would enable financial services

across rural and urban areas in Bangladesh. The company launched operations in March 2011 and

currently has a subscriber consisting of 23 million of customers. Rocket took the initiative and

played the role of pioneer in the mobile financial service industry. In spite of the question of not

achieving the advantage, Rocket is performing its operation and gaining profits from the market.

They are providing the easiest and safest way to send and receive money instantly on nationwide

mobile phone users. Rocket has a strong agent network all over the country providing not only the

cash-in or cash-out services, but also other utilities such as mobile payments, ticket purchases etc.

According to financial performance, they lack the profitability in the long run whereas they focus

on short-term targets. On the contrary, giant competitors like Bkash, Ucash, and Mpay etc. are the

potential threats of Rocket and the number is getting bigger day by day. They sowed the seeds of

the great potential of 55% of the population are being penetrated by Mobile and 90% of the area

has the coverage of networks. To compete with the potential threats, Rocket has to be goal oriented

and the functional units should be flexible and dynamic. For that, they have to eliminate all the

activities which are hampering the progress of the company and create another dimension of

customer loyalty and retention to hold the position in the industry.

 Contents
Introduction ........................................................................................................... 1
History ................................................................................................................ 1
Development and growth ................................................................................... 1
Internal environment analysis................................................................................ 1
Internal resources ............................................................................................... 1
Intangible resources ........................................................................................... 2
Tangible resources .............................................................................................. 2
Capabilities ......................................................................................................... 3
Industry Analysis .................................................................................................... 3
Porter’s Five Forces Model for MFS .................................................................... 3
Industry Life Cycle ............................................................................................... 5
Analysis of Macro-Economic Factors................................................................... 5
SWOT Analysis ....................................................................................................... 6
Defining Company’s business................................................................................. 7
Distinctive competencies ....................................................................................... 8
Financial performance analysis ............................................................................ 10
Liquidity ratio:................................................................................................... 10
Activity ratio: .................................................................................................... 11
Leverage ratio: .................................................................................................. 13
Profitability ratio:.............................................................................................. 14
Competitive Advantages ...................................................................................... 16
DBBL-Rocket Current Business model .................................................................. 18
Recommendations ............................................................................................... 20
Corporate level strategies .................................................................................... 21
Business Level Strategy ........................................................................................ 22
Functional level strategy ...................................................................................... 23
Technological Strategies ...................................................................................... 25
DBBL-Rocket Recommended Business model ...................................................... 27
Strategic Control .................................................................................................. 29
Proposed Performance Measurement Process ................................................. 29
Benefit plan or reward ...................................................................................... 29
Company culture ................................................................................................. 30
Global Strategy of Rocket .................................................................................... 30
Ethical Value Proposition ..................................................................................... 31
Conclusion ........................................................................................................... 31
Introduction

History

Rocket was basically launched to perform the main banking activities by using mobile phones in

a rural area. The journey of mobile banking services of Dutch Bangla Bank Limited started on

March 31, 2011, collaborating with Airtel (future startup, 2016). On September 25, 2016 “DBBL

Mobile Banking” was renamed as Rocket to capture the attention of the people.

Development and growth

By considering the needs of the customers, DBBL came up with the concept of mobile banking. It

was primarily developed to serve the people of the rural area who do not have any access to the

bank but want to transact money. DBBL launched this service so that people can carry out

transactions using mobile as the number of mobile phone users is higher than bank account users.

In 2011, they applied for the license of mobile banking services to Bangladesh Bank. In 2012,

DBBL got the license but at that time, Bkash was dominating the whole market. In 2016, they

came up with an idea of using the name “Rocket” instead of “DBBL Mobile Banking.”

Internal environment analysis

The internal environment of an organization means the elements including capabilities and

resources.

Internal resources

To establish a company strategy, resources are very important. Utilizing resources effectively is

very important.

1
There are two internal resources: Tangible and Intangible.

Intangible resources

Rocket is one of the financial services in the country. Rocket has spread its presence in all corner

in the country. The intangible resources that they have are given below-

 Goodwill: DBBL has strong brand value as it is operating its business all over the country

for a long time. Customers can easily position Rocket as a reliable source of the financial

service provider.

 Expertise: Rocket has the expertise of DBBL as their one of the concern of them. They can

use their value chain to work effectively.

 Copyright: Last but not the least, Rocket has their legal copyright to operate their business in

the financial service provider in the industry.

Tangible resources

Rocket has the tangible assets that are shown below-

 DBBL branches: Customers can easily get any kind of service regarding Rocket at DBBL

branches. So, we consider DBBL branches as one of their tangible resources.

 ATM Booths: Rocket is providing their service by mobile as well as ATM booths of

DBBL. As a result, those booths are also considered as one of the tangible resources.

 Service Points: Rocket has set a network of agents throughout the country in various outlets

as we call it service points.

 Others: To provide the best service to its target customers, resources like vehicles, logistics,

technologies, land, machinery and other forms of assets are used by Rocket.

2
Capabilities

They are more efficient on their sufficient balance and network availability and they are increasing

their network in different areas throughout the country.

Industry Analysis
Rocket includes payments of business organizations (such as salary), payment of individuals to

Govt. (such as utility bills), payments to individuals by Govt. such as old-age allowance, freedom

fighter allowance etc. It is massively used for transferring money from an individual to individual

(DBBL).

At the end of 2016, the number of total agents was 7, 10,026 and the number of registered

customers was almost 41.1 million, of which active accounts are almost 15.8 million. The number

of the total transaction was 1473.24 million in 2016 while the amount of total transaction was

1473.24 billion at the end of the same month (Payment System Department, Bangladesh Bank). In

the same years since the launch of the MFSs, the sector has shown significant growth.

Bkash currently dominates the MFS space accounting for 55.11% of the market followed by DBBL

(38.26%). The remaining eleven providers with mobile services currently account for around

6.63% of the total market share. The present situation of Mobile Financial Services (MFS) in

Bangladesh is the result of a very cordial and integrated effort of the Govt. and the central bank.

As a result, central banks around the globe looking for the similar solutions in their industries.

Porter’s Five Forces Model for MFS

Threat of New Entrants: According to revised MFS regulation 2011, all the MFS need to be

registered under a commercial bank, and this guideline makes it easier for existing banks to offer

3
similar services and reach economies of scale. At present, Rocket is trying to ensure customer

satisfaction and retain current customers while other new entrants are trying to make new customer

segments.

Threat of Substitutes: Customer can also purchase goods, pay bills and make savings by using

Rocket. The business model of Rocket shows that Rocket is a service powered by high technology.

And only high technology can bring it to the substitute product. Therefore, there is no direct

substitute for mobile financial services.

Bargaining Power of Buyers: Though there are already 17 industry participants in the MFS

industry, still Rocket is not the market leader in the scenario we see. It has a wide network of

agents and it is still an on-going process of positioned into the mind of customers. The main rival

of Rocket is Bkash. Other service providers are in the embryonic stage of their life cycle.

Bargaining Power of Suppliers: MFS is a service-oriented industry. All of the mobile financial

service providers are dependent on telecom operators like Grameenphone, Banglalink, Robi, Airtel

etc. for infrastructure support. Mobile financial service providers do not have their own system of

the network rather than the network of mobile operators. Therefore, we can conclude that suppliers

have greater bargaining power in this industry. (The Daily Star, 2012)

Intensity of Rivalry: Currently, 15 different banks are providing mobile financial service.

(“Information on Mobile Banking”, 2017). However, most of them are in the embryonic stage.

Rocket only holds around 16% of the market share. On the contrary, Bkash holds the significant

share which is 58%, where other service providers share their market with the rest of the portion

of the market.

4
Industry Life Cycle

Only two companies are controlling 74% of the whole industry. There is still scope for expansion

with taking away market share from other industry participants. Almost all the mobile companies

are allied with MFS industry. Organizations are expanding their distribution channels. The number

of gents has increased by 84% in 2017. More people are becoming active with the system.

Therefore, organizations are moving towards ‘economies of scale’. All these attributes are found,

as a product is in the growth stage of the industry life cycle.

Analysis of Macroeconomic Factors

Economic Factor: In case of bank deposit, our people are more concerned with maintenance cost

and interest rate. In the current economic situation, people want instant access to their money but

our banks lack this service due to the limited number of branches and ATMs. Moreover, we also

have a booming e-commerce industry of BDT 200 Cr. In most of the cases, e-commerce gives a

potential outlook in this industry.

Social Factor: Mfs industry is facing huge growth in recent years. The number of registered

account holders increased by 84% in 2017 whereas the number of transaction increased by 81%.

Statistics show that right now only 41 million people use MFS and 120 million people use mobile

phones. So there is a potential opportunity to create new customers for Rocket.

Technological Factors: Rocket is a fully technology oriented service providing company. It

mainly helps people to transfer money through a simple handset without any internet connection

and the job is dependent on mobile operators in terms of technological factors. However, local

commercial banks provide their customer with an ATM service.

5
Legal Factor: According to Bangladesh bank guidelines, BB payments cannot use MFS and

online payment into foreign currency. It might be another crucial business opportunity for Rocket.

On top of that, the maximum transaction is also limited to 25000 BDT and it might discourage

people as well.

SWOT Analysis
Rocket being one of the pioneers in the mobile banking sector could not cope with the industrial

growth. It has continuously faced losses. In this section, we are going to analysis the internal factor

of the company using the SWOT analysis.

Strengths:

 Rocket had a very strong agent network throughout the country to reach to its client as

agents have a very clear knowledge of the local market

 It has one of the largest ATM facility in the country

 Its employees are well trained and they have a very strong internal base.

Weaknesses:

 The company’s market research is not adequately being the first in Bangladesh.

 Rocket being another unit of Dutch Bangla Bank could not be operated as a separate

entity

 The functionality of the ATM was not proper due to lack of network failure.

 Their marketing campaigns are not standard enough compared to their competitors.

6
Opportunities:

 Availability of mobile services throughout the country

 The willingness of the mobile operators to improve their services

 The increasing number of mobile finance users

Threats:

 The intensity of the competitors’ promotions are too much higher

 Doesn’t have enough market share

 Complexity of market penetration

Defining Company’s business

Planned Strategy Realized

Strategy

Unrealized Emergent
Strategy Strategy

Planned Strategy

The Planned strategy of Rocket is to provide banking and financial services, such as cash-in,

cash out, merchant payment, utility payment, salary disbursement, foreign remittance,

government allowance disbursement, ATM money withdrawal through mobile technology

devices.

7
Realized Strategy

The transferred expertise of DBBL and Rocket made another crucial impact on Realized

strategy. The parent-ship of DBBL certainly impacts the business of Rocket. It sometimes

provides less information on positioning factor inside customers’ brain when both the business

units actively perform together in a single way of approach.

Unrealized Strategy

Rocket emphasized its customers to use ATM services, fast-track services to get maximum

benefit whereas Bkash the leader in this industry focused more on expanding their agent

network. Despite being the most advanced and pioneer leader started losing its market share.

Emergent Strategy

Transactional mechanism with nearly 25% more promotional budget compared to Bkash. The

more DBBL mobile banking increased its promotional activities the market share of Bkash grew.

After taking various measures DBBL failed to increase its market share and brand exposure. On

September 25, 2016, management of DBBL Mobile Banking rebranded itself as Rocket.

Distinctive competencies
 First apps provider

 Cash out from agents and ATM booth

 Cash deposit in the bank account

Mobile banking is now on growth stage. Currently, according to 2017 Daily Star news source,

there are more than 30 million people have a mobile banking account. (It has decreased by one

8
crore due to sudden rules and regulation of Bangladesh Bank. But expertise predicts to have an

increase in number of users in the following years.) Back to 7 years ago, there were only Bkash

and DBBL. Between this times, today mobile banking has become an important part of our

developing economy. It has been playing a vital role in our daily life. Like mobile phones, mobile

banking is becoming a major player in the economy. As a result, there appear many competitors

in this business sector. Previously the competition was between Bkash and Rocket mobile banking.

But nowadays, almost all of the leading banks are coming up with mobile banking facilities.

According to the Bangladesh Bank source, currently, there are 19 MFS providers in our country.

But still, now Bkash and Rocket are playing the leading role in the mobile banking sector. They

together account for 99 percent of the total users.

Now, if we put our focus on the distinctive competencies of Rocket mobile banking we may notice

multiple features-

 Firstly, Rocket came up with apps facility in the market. They make it easier by proving

apps facilities to its users.

 Secondly, Rocket users can cash out their money from ATM booths and agents. It’s a

strong distinctive competency for them. Because their main competitors have not both

advantages simultaneously. Sometimes agents are running out of money. Even during night

time, you won’t be able to get an agent from where you can cash out money. But to solve

this issue there are ATM booths service facilities for the Rocket users.

 Rockets have the most number of ATM booths in our country. People can easily take

money from ATM booths.

9
  Another one is, if Rocket users have DBBL account, they can easily deposit money from

their Rocket account. Again you can take money from your DBBL bank accounts to Rocket

account.

 Recently, people can easily solve their payment issues (electricity bills, ride sharing

payment, ticket bills etc.) through Rocket services. It is more convenient for people who

have a bank account in DBBL Bank. They can transfer their money to their mobile account

and they can solve their everyday life payment issues.

You will always notice a short queue in front of the Rocket ATM booths. So, Rocket can set their

distinctive competency in these service segments.

Financial performance analysis

We collected annual reports for the year 2017, 2016 and 2015 and analyzed the financial condition

of the company. We calculated Liquidity ratios, Activity ratios, Leverage ratios and Profitability

ratios of DBBL.

Liquidity ratio: Liquidity ratios explain how quickly a company can convert its current assets to

cash without losing any value if necessary to meet its short- Ratios 2015 2016 2017

term liabilities. They are additionally a key soothsayer of a Current

company’s faculty to make timely payments to creditors. ratio 1.11 1.1 1.12

We calculated the current ratio and quick ratio from the year Quick

2015 to 2017. These are interpretation including the graphs ratio 1.06 1.05 1.1

for previous three years:

10
 Current ratio Quick ratio

1.12 1.1

1.08
1.11
1.06
1.1
1.04

1.09 1.02
Year 2015 Year 2016 Year 2017 Year 2015 Year 2016 Year 2017

Current Ratio: From the calculation of the current ratio of DBBL, we can see that the current

ratios of the previous three years are quite good, as all these three are above 1. Besides, the year

2017 has the highest current ratio, which implies that the company currently has enough short-

term assets to meet its current or short-term liabilities. It also indicates that the company is

increasing its short-term assets as well as reducing short-term liabilities.

Quick Ratio: Quick ratio, also called the acid test ratio, measures the instant liquidity of the

current assets. It shows how many times cash, account receivables, and marketable securities cover

the short-term liabilities. Here, DBBL has almost similar quick ratios over three years having the

highest number currently. It is a very good sign for the company because prepaid expenses,

inventories, and other comparatively less liquid short-term assets are removed from the

calculation.

Activity ratio: Activity ratios give a valuable measure of an organization's activities by deciding,

for instance, the normal number of days it takes to gather on clients’ or customers’ accounts and

the normal number of days to pay merchants. Occasional changes are not really reflected in the

calculations. It indicates how efficiently and effectively the company is using its assets to gain

11
revenue. Under this ratio, we calculated the receivable turnover ratio and days sales in receivable

ratio and their graphs are given below:

Receivable Turnover Days sales in receivable

55 6.8
54 6.6
6.4
53
6.2
52 6
51 5.8
Year 2015 Year 2016 Year 2017 Year 2015 Year 2016 Year 2017

Receivable Turnover ratio: This ratio measures how productively a firm gathers its credits that

are issued for the clients. It also says that how many times the company can convert its receivables

into cash during the time period. So, a higher ratio of receivable turnover is preferable. From the

calculation, DBBL had the highest ratio which is 54.5 times in 2015 and after that, it has been

decreasing till next two years, which means the company is now able to collect its receivables less

frequently than the previous years. It can be a very big threat for a banking company in near future,

although they have opportunities to overcome the situation, as the differences of the frequencies

are short.

Days sales in receivables: This ratio implies that how many days it takes to collect its receivables

from the creditors. So, the lower number in the calculation is preferable here because an increase

in receiving accounts indicates increased possibilities of late payments. For DBBL, we can see that

the days sales in receivables ratio is so poor that it has been increasing consecutively, which means

the company is considering more time to receive its accounts. It is also to be considered that still,

the differences in the ratios over the years are in control.

12
Leverage ratio: Leverage ratio indicates the level of debt incurred by a business entity against

several other accounts in its financial statements. It demonstrates the level of obligation caused by
Ratios 2015 2016 2017
a business element against a few different records.
Debt ratio 93% 94% 94%
Under leverage ratio, we calculated debt ratio and
Times interest
Times interest earned ratio. The graphs and
earned ratio 2 1.6 2
interpretation are given below:

Times interest earned ratio Debt ratio

95%
2
94%
1.5
94%
1 93%
0.5 93%
0 Year 2015
Year 2016
Year 2015 Year 2016 Year 2017 Year 2017

Debt ratio: An organization's debt ratio offers a scenario of how the organization is financed. This

gives a reasonable sign of the measure of use held by a business. The organization could be

financed by fundamentally obligation, equity, or an equivalent blend of both. So, a low ratio or

below .5 is preferable for every sector of business. But for banking business, it can be sufficient in

some cases to be higher. Here, in the past three years, DBBL has almost similar debt ratios which

are from .93 to .94. That indicates in a naked eye that the company has a large risk and it is highly

leveraged. If we compare the number to its competitors, we can see that it is quite normal to have

that much debt for a bank.

Times interest earned ratio: TIE ratio determines whether the borrower can afford to take more

or additional loans or not. In addition, it also says how many times one can pay its interest from

13
its current income. So, a higher TIE ratio should be preferable. From the calculation, currently,

DBBL can pay its interest two times over its current interest payment from its income, which is a

positive sign. Although it had slightly tough time during 2016, they strongly overcame by getting

back to their track.

Profitability ratio: Profitability ratio is utilized to assess the organization's capacity to create
Ratios 2015 2016 2017
income when contrasted with its costs and
Net profit margin 13.9% 6.2% 11.2%
other cost related to the age of pay during a
EPS 15.19 8.9 12.28
specific period. In easy words, it measures

the income that a company can generate from ROA 1% 0.65% 0.60%

its revenue. ROE 9.30% 11.10% 11.80%

A high profitability ratio is preferable which indicates that the company is generating a good

number of cash flows as well as profits.

Under profitability ratio, we calculated earning per share, net profit margin, return on asset and

return on equity ratios. The graphs with the interpretations are given below:

Net profit margin EPS

15.00% 20
10.00%
10
5.00%
0.00% 0
Year 2015 Year 2016 Year 2017 Year 2015 Year 2016 Year 2017

14
 Return on asset Return on Equity

1% 15.00%
10.00%
1%
5.00%
0% 0.00%
Year 2015 Year 2016 Year 2017 Year 2015 Year 2016 Year 2017

Net profit margin: Net profit margin is used to compute the level of benefit an organization

produces from its aggregate income. It is the total profit that is usable for future after all expenses.

So, a high NPM is appreciable. Here, DBBL had a very low NPM in 2016 and had the highest in

2015 for those three years. Currently, they are overcoming the situation having a good profit from

sales.

Earning per share: EPS measures how much money is earned by a shareholder from each dollar

of income. It is the easiest way to scan the profitability of a company. So, higher EPS is preferable.

DBBL should focus on increasing EPS, as their ratio was high back in 2015 than now, though they

strongly bridled in 2016 to beat the worst circumstance.

Return on asset: It is a productivity ratio that estimates how much profitable the company’s total

assets are. As it were, ROA estimates how proficiently an organization can deal with its advantages

to create benefits over a period of time. So, a higher ratio is favorable for investors or the

depositors. From the calculation, DBBL’s ROA ratio is being decreased rapidly, as it was high

during 2015. If we compare to other companies within the same industry, still it is a bit low. The

management should be concerned to use their assets in a more profitable way.

Return on equity: ROE ratio measures what percentage of the amount is returned to the

shareholders as equity. It says how much money the company generates from the investments of

15
the shareholders included in the financial statements. So, a high ratio should be attractable for the

new as well as existing investors to invest more. From the calculation, DBBL’s ROE ratio has

been increased by over 2% from 2015 to the next two years. If we look at the debt ratio, the

company’s risk is much higher. This is one of the reasons which cause increases in ROE ratio.

Competitive Advantages
Rocket is the second largest mobile banking service provider in the country. One of their main

competitive advantages is their wider range of ATM booths. From the beginning of the mobile

banking, they have been focusing on ATM services. With the passage of time, they have increased

the numbers of ATM booths. From BanksBD.org we can see that there are 1165 ATM booths of

DBBL Bank.

If you think from the future economic perspective, their ATM services will help them to further

carry their competitive advantages in the future. Because if we, as a nation, continuously maintain

our economic development, at one stage it will become very costly to manage agent banking. Now,

Rocket’s competitor has the advantage in the numbers of agents. But it won’t be working after few

years. People will shift to the automated teller machines.

Middle-income and higher middle-income people are usually reluctant to go to an agent’s shop

and cash out money. It’s a rigid process. But they are very used to take money from ATM booths.

So, considering this perspective, till now they are running their business successfully. We think

they should focus further to use this service efficiently and effectively.

Considering our economic condition and middle-class sentiment, carrying a money card (referring

debit card and credit card) and taking money from ATM booths gives people some superior

pleasures. If you go to any suburbs or district cities you will definitely observe this pleasure in
16
their face. Rocket can utilize this opportunity as more people are adding to the middle-class

segments (From trading economics.com we can see in 2013 the average income of people were

11493, after five years it stood at 13258. Experts are predicting to have a moderate increase in

income by the year 2021).

Rocket charges very small percentage from each transaction comparing their main competitor.

Rocket chargers 9.50 Taka on per 1000 Taka cash out. On the other hand their main competitor

charger 15 Taka. So, definitely, it’s one of their main competitive advantages. Due to this reason

many people use their preferences to use Rocket.

Rocket users can directly deposit money from their mobile account to a bank account. This is a

lucrative feature. It promotes the savings practices of the people. People can take money into

mobile account from a bank account.

Most of our workers from Middle-East can easily remit their money through Rocket facilities.

They can transfer their money into the mobile banking. These are some of their competitive

advantages.

17
 DBBL-Rocket Current Business model

Partner Customer
network relationship

Robi Sending a message

Banglalink of the usefulness of
Grameen Phone Value mobile banking,
Citycell Proposition 24 hrs. Call centers
Making banking Target
Core easier audience
capability
Discounts on Business
The first purchase
Mobile Corporate
Real-time online
Banking in
Activity banking
Bangladesh
configurati Individuals
on Access to banking
and advanced
Transaction payment Distribution
Bill payment channel
Cash Convenient and
withdraw secure way to Bank
Balance send money Mobile networks
inquiry operators
Mobile top- Effective in Agents
up developing a Customer with a
savings habit commission

Cost
structure
Operating
Database and Revenue
server cost
streams
ATM cost
Bandwidth cost Charging a certain
R&D cost percentage on
Sms gateway every transaction
cost
Server security
cost

18
Core capability

Rocket brought the mobile banking concept in Bangladesh for the first time. Thus it is the core

capability of Rocket.

Partner network

Almost all the mobile network company works with Rocket including Grameenphone, Banglalink,

Robi, and Teletalk.

Activity configuration

Without creating an account Rocket offers almost all the banking solution.

Cost structure

The main cost that Rocket expenses are for server, SMS and database. They also have ATM cost,

Research and development cost Etc.

Value Proposition

Rocket offers standardized values to their customer to make their banking life easier than ever.

Customer relationship

Since customer relation is one of the most important parts of the service business Rocket is very

active to this extent.

Distribution channel

There are many ways for distribution that are being used by Rocket.

19
Revenue streams2

There is a charge list where there is shown that how much Rocket charges for the transactions

made.

Target audience

Rocket targets business people, corporate peoples and many individuals for their business.

Recommendations
Recommendation to develop strength

Rocket should approach with its individual customer segment rather than the DDBL positioning

of themselves. By providing premium offers, Rocket can enter a new market segment. Rocket is

significantly dependent on mobile operators for technical and network support. Rocket is engaged

in agreements with those mobile operators. So, they charge Rocket with a certain amount of

percentage. To minimize the costs, Rocket should emphasize on innovative technologies apart

from mobile networks.

Recommendation to reduce weaknesses

Rocket should adopt the Bangla language for its operating system. Moreover, Bangladesh is

witnessing a boom in the E-commerce sector. To grab this massive industry, Rocket should

promote itself to the corporate customer segment. An effective marketing campaign can direct

them to attract the market.

20
Recommendation to eliminate threats

Most of the local commercial banks are currently offering mobile financial services because the

entry barrier is almost low in this industry. As a result, the switching cost is lower for customers.

Rocket should gain customer loyalty at the peak or they might lose their customer base. Introducing

customer membership such as Rocket Star customer or Rocket premium customer can be a key

step to it. Offering services based on preference might be an effective strategy to fight against new

entrants as well as current competitors. Rocket should hire IT experts or hackers who will protect

the whole IT system as their job. They will prevent instantly if there is any unauthorized activity

in the IT system.

Recommendation to improve financial performance

One of the weaknesses of Rocket is they are not properly maintaining their current asset and current

liability. Profitability ratio also shows that profit margin is not increasing in satisfactory level. It

might increase the pressure from new entrants and existing competitors. If Rocket can increase the

volume of transactions, it will able to get rid of its lower profit margin. Another thing is, Rocket

is losing its return on assets. That means Rocket is not utilizing its asset properly.

Corporate level strategies

Currently, Rocket is using backward vertical integration of corporate level strategies. Vertical

integration means owning intermediaries of the whole service, whereas, horizontal integration

matters when a company owns one of the competitors. Here, for DBBL, it is too much extravagant

for them to buy a competitor like Bkash. End of the day, it will increase their service cost and quell

one of the potential competitors.

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Rocket now has its own IT department to maintain their websites, apps and other IT sectors.

Besides, they have their own distributors of the money to the agents, ATM booth, transports for

sales jobs, and finally, a well-organized supply chain department to monitor these systems. As they

are having almost all the intermediaries under their control, they are being followed vertical

integration. Here, all the channels that are mentioned earlier are worked like the input of their

service, and this is called backward vertical integration.

In terms of corporate level strategy, our recommendation to Rocket for next five years is to follow

both backward and forward vertical integration at a time. Through forward vertical integration, the

company can interrupt in selling and direct distributing of the services. They can set up their trained

worker as an agent all over their coverage areas. Sometimes users have to face hurdles to cash the

electric money from local agents or ATM booth for the unavailability of money or agents. This

can be a great solution by putting some small stores named “Rocket Station” from where people

can do all the stuff they use to do with local agents. This will increase their efficiency and number

of transactions in a short time. It can also reduce some distribution costs by maintaining improved

schedules of works

Business Level Strategy

Rocket is a subsidiary of DBBL which can be used by the people of any income level. Individuals

who have either bank accounts or non-bank accounts can use Rocket. In the very beginning, DBBL

found the need of the common people and launched a mobile banking system. The people of the

rural area were given the most concentration (N. Hossain, personal communication, July 12, 2018).

As it was the new concept in the Bangladeshi market, it changed the whole scenario of the financial

market within a short phase of time. It started getting popular and people at different levels started

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buzzing out more frequently. To keep pace with other competitors, Rocket needs to implement the

following business level strategies:

Follow broad low-cost strategy: Rocket should concentrate on broad low-cost strategy. At present,

they charge only 9tk per transactions which is much lower than their competitors (N. Hossain,

personal communication, July 12, 2018). By continuing this strategy, they may able to capture the

attention of their potential customers. Moreover, new customers of competitors may switch to

Rocket to grab a low-cost opportunity. This strategy will facilitate them to generate more profit

and grab a greater portion of the pie.

Aware customers with marketing campaign: In order to grab more market shares, Rocket should

target certain segments where users of mobile phones are increasing. According to BTRC, More

than 140 million people are using mobile phones and among them, 30% are using Smartphone.

(Kader, R. 2018). So there is a potential market in Bangladesh but the sad reality is many people

do not know about Rocket. Those who know about it are not well knowledgeable of how it works.

To let people know about it, some marketing campaigns are needed. For example, Rocket can

make a poster with pictures about how to receive or send money and place in front of the ATM

booths and service points. Advertisements can be made by showing the steps. In the rural area,

most people are not familiar with mobile banking. So, Rocket can have some opinion leaders who

will teach them the functions.

Functional level strategy

Functional level strategies are all the activities which include the performance of business units

most efficiently. Strategies of different functions of Rocket that will be implemented in the next

five years are:

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Infrastructure

A well-maintained infrastructure will facilitate cross-communication among all functional areas.

This will help Rocket to have organizational activity by developing quality, develop consumer

responsiveness. They have to their own resources of infrastructures such as land, office space,

machinery etc. More capable machinery should be set up as the demand is increasing day by day.

Research and Development

The Rocket has an efficient research and development department. The R&D has a responsibility

to collect feedback from marketing dept. that coordinates different areas that can help Rocket to

reduce cost. The activities will provide the current demand of the mobile financial services and

develop the services. The Rocket should make MIS software from which the employees can easily

monitor their activity.

Human resources

The human resource of Rocket should be more technical. As all the operations are done with

mobile phones, the employees need to be more skilled and efficient. Moreover, attractive

compensation packages should be provided by Rocket to motivate the employees. Sometimes,

arranging several competitions among employees can be arranged to develop the skills.

Marketing

The marketing campaigns that they are performing now are substandard. They should allocate

more budgets to make the campaigns more attractive towards their target audience. They should

come with more capable mediums of marketing and strengthen the contents of their

advertisements.

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Information system

They coordinate all the functional level units and accumulate all the data of each unit. It will help

them to perform effectively in the industry. Moreover, creating the balance between demand and

supply will be easier.

Services

Rocket should implement such technologies that do not interrupt any users. It means the flow of

activities should occur without any pause. Agents and other employees who are directly dealing

the customers should be professional as well as more cordial towards them.

Technological Strategies
Although they are more user-friendly compared to their competitors but day by day their market

share gap has been increasing. It indicates that there are multiple segments where they can improve

their strategies. It will be futile if they can’t leverage their technological strategies to improve their

other business, corporate level strategies. Because we have seen that they became the pioneer in

some technical services but later due to their inefficient strategies they couldn’t fully utilize their

first mover advantages. These are few steps they can follow-

 They need to introduce QR scanning option in their apps because most of the people use

smartphones. During day to day transactions, QR scanning option plays an important role.

It reduces the time to complete a transaction. It also increases the security pattern.

 It will be beneficial if they change the design interface of their apps. Their apps are okay

but to keep the pace with other competitors, it is mandatory to change themselves. So, it is

immediate to change the design of their apps.

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 They can introduce some features regarding asset management. In developed countries,

people can see their each and every transaction history from their digital payment account.

So, it helps them to track their spending pattern. If Rocket comes up with similar features

it would help them to grab the educated and conscious population of the country.

 Initially, Rocket was used to transfer money from peer to peer. But the mobile banking

industry has totally diversified. We are using mobile banking in our daily transactions.

Here Rocket is lagging behind. While its competitor has already grabbed the majority of

the shopping and grocery outlets to payment via mobile banking, Rocket cannot capture

the opportunities. So, it is immediate for them to increase the contact with super shops,

shopping outlets, transportations and every possible sector.

 As a big portion of our working population stays in middle-east, it is always troublesome

for them to remit money in their families. Most of the morning we observe the headlines

in the newspaper regarding remittance issue. If Rocket can solve the issue it would help

them to grab a huge portion of customer segments. They send large amount of money from

foreign countries. It will help them to increase their daily transaction volume. Last year our

foreign reserve from remittance was 32 billion dollar.

 Ride-sharing services become popular lately in our country. But still now we have to

complete our ride with cash money. If Rocket comes up with strategies like QR scanning

or digital money services to complete the ride it will help them to make Rocket popular

among ride sharing people.

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 DBBL-Rocket Recommended Business model

Partner Customer
network relationship

Robi Video conferencing

Banglalink Value Training customers
Grameen Phone
Teletalk
Proposition
Card in Phone Target
Core audience
capability Reduction of
swiping machine Business
The first
Mobile Banking without Corporate
Banking in Activity banker
Bangladesh configurati
on Application Middle class
dependency Distribution people
Transaction
Bill payment
channel
Business
Less dependency
facilities
on physical bank
Financial
Mobile networks
planning
operators
Agents
Customer with a
commission

Cost
structure
Operating
Database and Revenue
server cost streams
ATM cost
Charging a certain
Bandwidth cost
percentage on
R&D cost every transaction
Sms gateway
cost
Server security
cost

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Core capability

Being the first ever mobile banking company is the main advantage of Rocket.

Partner network

Citycell has stopped their functions from Bangladesh. So it is not worthy to be with Citycell.

Activity configuration

They should add business solution facilities and be the financial planner for their customers.

Cost structure

The main cost that Rocket expenses are for server, SMS, and database.

Value Proposition

Rocket can add the above-mentioned values to their business model.

Customer relationship

Video conferencing and training the customers to use mobile banking would be much effective for

making good relation with customer.

Distribution channel

Rocket has the potentiality of reducing the dependency on physical banking.

Revenue streams

When the mass people would use Rocket and Rocket has to expense less they can also lessen the

charges on the transactions thus they will attract more customers.

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Target audience

Rocket should add middle-class people in their target audience.

Strategic Control
Personal Control

Rocket is trying to establish a friendly culture within the organization. Rocket maintains a friendly

relation with employees and believes that this can motivate their employees accordingly.

Evaluation

Performance evaluation can enhance performance and make a context of competition. Evaluation

can also determine salary increments and bonuses which is very beneficial for employees as well

as the company’s overall growth introducing ‘performance measurement process.’

Proposed Performance Measurement Process

Employees with 5 ratings will be the outstanding performers of the Rocket. They will get 40%

annual bonus. Those employees who will get 4 rating points are marked as excellent performers

and they will get 30% bonus. With 3 ratings, one will get 20% bonus. Moderate performers with

2 rating will collect 10% annual bonus and with 1 rating point one will be derived from bonus

and he will have to work harder.

Benefit plan or reward

 Additional 5 days of leaves per year.

 10 days’ casual leaves are allowed on an urgent.

 Sick leaves can be taken for 16 days annually

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  Discounts on Rocket employees over selected hospitals

Company culture
The existing culture does not help the making all proposed strategies given. The Rocket follows

their set of agents to provide financial services. That includes convenience and reliability. The

Rocket can lack the energy for long activity. The Rocket provides sufficient training for their

workers. The main lacking of Rocket is they have no proper training method. The Strategies are

to provide software initiated services can develop their activity. That is not difficult for Rocket to

execute the service properly. They can make more efficient HR and Financial worker that can

make more plan to develop that. The Rocket has more cooperative and efficient resources.

Global Strategy of Rocket

Due to competitions and lack of marketing campaign, Rocket is unable to grab the lion’s share of

the market. Moreover, Rocket is the innovator in the Bangladeshi market. That’s why they are

lagging behind in the race. To accelerate the growth and profitability of Rocket, some global

strategies can be applied. Though mobile banking concept is new in Bangladesh it is very popular

in other parts of the world. Green, N. (August 3, 2017) mentioned that there is a probability of

rising Smartphone user to 1.5 billion only in Asian nations. So, Rocket can start their business by

setting up a strategic alliance with some Asian countries. For instance, Singapore, Indonesia,

Pakistan, South Korea, Malaysia, Thailand, India and so on as these countries are more prompt to

use mobile banking services (Singapore, F, 2016).

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Ethical Value Proposition
Fair compensation and bonus proportionate to performance

Rocket has to distribute their employee salaries according to the intensity of work as well as the

type of work. They should make their employees happy as long as they want to be profitable. The

graphics scaling can make this process even more transparent.

Childcare

Rocket can offer paid parental leaves for female employees who are mothers. They should also set

the childcare zone for the babies of entire office workers. It will surely enhance the view of

Rocket’s corporate social responsibility as well as employee flexibility.

Conclusion
Rocket is one of the finest MFS service providers powered by Dutch Bangla Bank Ltd. Still, the

company is in the juvenile stage of their performance. In spite of all the odds, the company has

enormous potential to make enough profit from the industry. Ethically liable and fulfilling

corporate social responsibilities, Rocket is in a driver seat of the MFS industry in Bangladesh.

They can utilize the dense mobile user population and make the ultimate performance of

themselves in terms of service providing the issue. The process of making a new journey of

profitability for Rocket can be unlink from the parent-ship of the bank and make an identity of

itself. Otherwise, the positioning process amongst mass can eventually create more challenges in

the way of business for Rocket.

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References:

1. Dutch Bangla Bank Mobile Banking Rebrands to Rocket. (2016, September 25). Retrieved

from: https://futurestartup.com/2016/09/25/dutch-bangla-bank-mobile-banking-rebrands-

rocket/

2. Dutch-Bangla Bank Rocket. (n.d.). Retrieved from:

https://www.dutchbanglabank.com/rocket/rocket.html

3. Green, N. (2017, August 3). Mobile banking in Asia: the future is now. Asia Times.

Retrieved from: http://www.atimes.com/mobile-banking-asia-future-now/

4. Kader, R. (March 28, 2018). Mobile Handsets Market Updates: Smartphones Growth

Stagnates, Samsung and Symphony Continue To Lead, And Low-Mid Range Handsets

Dominate Market.Future Startup. Retrieved from:

https://futurestartup.com/2018/03/28/mobile-handset-market-updates-smartphones-

growth-stagnates-samsung-and-symphony-continue-to-lead-and-low-mid-range-handsets-

dominate-market/

5. Kokemuller, N. (September 26, 2017). Advantages of the Cost-Leader Strategy. Retrieved

from: https://bizfluent.com/info-8611808-advantages-costleader-strategy.html

6. Mobile banking on the increase in developing countries (n.d.). Retrieved from:

https://www.english-online.at/news-articles/business-economy/mobile-banking-in-

developing-countries.htm

7. Mohan, L., & Potnis, D. (2015, January). Mobile banking for the unbanked poor without

mobile phones: comparing three innovative mobile banking services in India. In System

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 Sciences (HICSS), 2015 48th Hawaii International Conference on (pp. 2168-2176). IEEE

Retrieved from: https://ieeexplore.ieee.org/abstract/document/7070073/

8. Singapore, F. (2016, May 6). Mobile Banking Surges in Asia. Fintech. Retrieved from:

http://fintechnews.sg/2311/mobilepayments/mobile-banking-surges-asia-dbs-poised-

become-regional-leader/

9. Jebun Nesa Alo, M. R. S. (2018, March 5). Mobile banking users fell by 1cr in six months

[Press release]. Retrieved from https://www.thedailystar.net/business/mobile-banking-

users-fell-1cr-six-months-1544149

10. Bangladesh Average Monthly Income [Press release]. (2018, August 31). Retrieved from

https://tradingeconomics.com/bangladesh/wages

11. Rocket [Press release]. (n.d.). Retrieved from

https://www.dutchbanglabank.com/rocket/rocket.html

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