Assignment-01

Course Code: FIN425

Section: 02

SUBMITED TO:
Naharin Binte
Senior Lecturer
Department of Business Administration
East West University

SUBMITED BY:

Name ID
Abdur Rahman 2016-2-10-204
BRAC Bank Limited (BBL)
SWOT Analysis:
Strengths:

• Strong Corporate Identity: BBL is the leading provider of financial services nationwide.
With its strong corporate image and identity, it can better position in the minds of
customers.
• Distinct Operating Procedures: BBL in known nationwide for its distinct operating
procedure. The company’s Managing for Value strategy better satisfy customers’ needs
and also keeps the firm profitable.
• Efficient Performance: The selection & recruitment of BBL emphasizes on having the
skilled graduates & postgraduates who have little or no previous work experience. The
logic behind is that BBL wants to avoid the problem of ‘garbage in & garbage out’. & This
type young & fresh workforce stimulates the whole working environment of BBL.
• No Communication Barriers: BBL has tried hard to avoid communication barriers &
structural bureaucracies. The little existence of authoritative barriers among the different
level of management stimulates a feeling of importance as their work get priority over the
position.

Weaknesses:

• Lack of Customer Confidence: AS BBL is fairly new to the banking industry of Bangladesh
average customers lack the confidence in BBL and judge the bank as an average new bank.
• Too Many Contract Workers: BBL has contract workers who lack the commitment with
superior quality service and also are pretty dissatisfied as being a contract worker. This
hampers the bank’s service quality as a whole.

Opportunities:

• High Demand of Housing Loans: Since housing is one of the basic needs of people, there
is a high demand of housing loans. BBL personal banking division can focus on this
category of products and grab these segments of customers.
 • Countrywide Network: The ultimate goal of BBL is to expand its operations to whole
Bangladesh. Nurturing this type of vision & mission & to act as required, will not only
increase BBL’s profitability but also will secure its existence in the long run.

Threats:

• Upcoming Banks: The upcoming private local & multinational banks possess a serious
threat to the existing banking network of BBL.

• Loss of Customers: Absence of various products such AS HOUSING loans are causing
various customers to detract from BBL. This is a serious threat for BBL Bangladesh.

PEST Analysis:

• Political factors: A tool for the big guys

The banking sector looks all powerful — but it’s susceptible to a bigger giant: the government.

Government laws affect the state of the banking sector. The government can intervene in the
matters of banking whenever, leaving the industry susceptible to political influence. This includes
corruption amongst political parties, or specific legislative laws such as labor laws, trade
restrictions, tariffs, and political stability.

• Economic factors: Easily influenced

The banking industry and the economy are tied. How income flows, whether the economy is
prospering or barely surviving during times of recession, affects how much capital banks can
access. Spending habits, and the reasons behind them, affect when customers borrow or spend
funds at banks.

Additionally, when inflation skyrockets, the bank experiences the backlash. Inflation affects
currency and its value and causes instability. Foreign investors think twice before providing their
funds when a particular country’s currency value is high.

Exchange rates also affect banks globally — stable currencies such as the US dollar impact
other currencies, spending habits, and inflation rates in other countries.

• Sociocultural factors: Consumers want ease

Cultural influences, affect how people see and use banking options. People turn to banks for advice
and assistance for loans related to business, home, and academics. Consumers seek knowledge
from bank tellers regarding saving accounts, bank related credit cards, investments, and more.
Consumers desire a seamless banking experience. And technology is developing to allow
consumers to buy products easier, without requiring assistance directly from banks.

• Technological factors: Smartphones to the rescue

Once, it was expected to visit the local bank to make changes to financial accounts. But not
anymore.

Many banks offer a mobile app to witness accounts, transfer funds, and pay bills on smartphones.

Smartphones can scan cheques, and the bank can process it from their end, at their location. This
change helps to save paper and the need to drive directly to the branch to handle these affairs.

Debit cards are also changing. Chips have been implemented, requiring users to insert their card
into debit machines rather than swiping them. Other countries, such as Canada, have implemented
a “tap” option — tapping the debit card onto the device, requiring no pin, for a transaction to
complete. These changes make it easier on the user to make purchases without required intrusion
from banks.

Even banks themselves are utilizing technology within the workplace. Telecommunicating
through virtual meetings is being embraced. It replaces the need for in-person meetings.

Porter’s Five Forces of BRAC BANK:

• Rivalry among existing competitors: High level of rivalry among existing competitors.
Because of huge number international and national bank situated in Bangladesh.

• Threat of new entrants: In the context of BBL the various new & upcoming Banks pose a
significant threat, being new entrants in the banking sector of Bangladesh. But BBL is
aware of these potential competitors and is trying to expand countrywide to make the sector
unattractive & to create entry barrier.

• Threat of substitute products: BBL continuously faces the threat of various substitute
products launched by its strong competitors in the market place.

• Bargaining power of suppliers: In the context of BBL, suppliers are those customers and
organizations that provide financing to the firm via depository schemes. If the cost of
financing rises, then BBL will have to increase the interest rate that it charges to its
customer in order to remain in the business.
 • Bargaining power of buyers: In the context of BBL, the firm is more or less free from the
scope of the bargaining power of the buyers. BBL has its own policies to carry out its
operations & employees follow those rules to deal with the customers.

ICB (Investment Corporation of Bangladesh)

SWOT Analysis:

Strengths:

• Available Loan Facilities: In against of ICB Mutual Funds any clients can get 80% short-
term loan. So, they can fulfill short tern money need without selling Mutual funds.

• Good Customer Relationship: ICB maintains good customer relationship by

giving profitable return, timely service and high dividend.

• Cumulative Investment Plan: ICB provides CIP certificates instead of dividend.

It is helpful both for the investors as well as ICB. Because ICB gets the money again to
its fund and investors get one more certificate.

• Diversification in investment: ICB manages a number of funds to bring diversification in

investment sectors.

Weaknesses:

• Low Quality Service: Since it is a government corporation, it cannot keep pace with
the private sectors. At the same time, it needs to maintain a lot of formalities that’s
why its service is of low quality.
• Complex Procedure: in delivering loan to the investors it needs to maintain a lot
of formalities and it also expects to get more assurance when delivering loan to the
investors.
Opportunities:

• Online access: ICB is trying to enter into the online facilities and enriching itself by
introducing online access in its operations.
• Multi Sector Revenue Flow: Because of offering various financial tools, ICB generates
revenue flows from different sectors.

Threats:

• Government Policy: Policy changes connected to the operation of finance

companies might create an unfavorable impact on the investment industry.
Porter’s Five Force of ICB:

• Rivalry among existing competitors: ICB has medium level of rivalry among existing
competitors. Because number of investment company in Bangladesh is not huge.

• Threat of new entrants: ICB has low level of threats of new entrants. New investment
corporation start is very much complex in Bangladesh.

• Threat of substitute products: High level of threats of substitute products for ICB. Its rival
lunched new product and ICB face threats.

• Bargaining power of suppliers: Medium level of bargaining power of suppliers.

• Bargaining power of buyers: ICB gives narrow space to the buyer for bargaining.

AAMRA TECH

SWOT Analysis:

Strengths:
• Experience in the ISP market (12+ years)
• Known and respected name
• Innovation
• Peering agreements
• Experienced personnel
• Network management and economics knowledge
• Ability to change rapidly in dynamic Marketplace
• Can take advantage of best tariffs in country
Weaknesses:

• No local content
• Infrastructure dependent on 3rd parties
• Purchasing behavior dependent on profit

Opportunities:
• Relationships with Telco’s, vendors, local regulators
• Mergers with content providers
• Acquire smaller enterprises
• Development of web application

Threats:

• Entry of Telco’s/cable companies

• Price competition
• Saturation of the market

Porter’s Five Force of AAMRA TECH

• Rivalry among existing competitors: AAMRA TECH has high level of rivalry among
existing competitors. Because there are huge number of technological companies in
Bangladesh because of technological advancement.

• Threat of new entrants: AAMRA TECH has high level of threats of new entrants. Day by
day new technological company enters in the market.

• Threat of substitute products: High level of threats of substitute products for AAMRA
TECH. Competitors always come with new innovation.

• Bargaining power of suppliers: Medium level of bargaining power of suppliers.

• Bargaining power of buyers: Bargaining power of buyer are high for so many competitors.

BEXIMCO:

SWOT Analysis:

Strengths:
 • Factory: BEXIMCO has huge number of factories among all textile company.

• Technology: BEXIMCO’s biggest strengths of their advance technology.

• Brand Name: BEXIMCO has their big band name all over the country.

Weakness:

• Loan Defaulter: One of the owners of BEXIMCO did take a loan from Sonali Bank and
did not pay it yet. It may hamper company image in the long run.

Opportunity:

• International expansion of BEXIMCO.

Threats:

• Government Regulations: BEXIMCO pollutes environment. So, government steps may big
threats of this company.

Porter’s Five Model of BEXIMCO

1 Rivalry among existing competitors: BEXIMCO textile has high level of rivalry among
existing company. Because If a consumer wants to switch another brand of readymade clothes he
or she can easily switch to another brand as the price of the cloth is almost same.
2 Threat of new entrants: Here the new entrance threats are low. Here customers are not
depended to the different brands because all companies produce more or less same product. There
are no such strong barriers to entry in terms of legislation, government rules and policies.
3 Threat of substitute products: Threat from substitutes is very limited.
4 Bargaining power of suppliers: Suppliers bargaining power comes into consideration when
it is a manufacturer firm. As this industry is a manufacturer industry its deal with bargaining power
of supplier. However, as it main raw material is fabrics, which is being collected from different
places and then used to processing as raw material. So here customers switching cost is higher here
as well as suppliers bargaining power is also higher.
5 Bargaining power of buyers: Buyer’s competitive forces are strong.
AB Bank:

SWOT Analysis:

Strengths:
• Quality Customer service: AB Bank is committed to its customers for excellent,
innovative and speedy solutions across all customer segments.

• Experienced Senior Management: The senior management of the bank is responsible

for promoting the highest level of business ethics and integrity.

Weakness:
• High emphasizes on fixed deposits: AB Bank gives high emphasize on fixed deposits
every year, which means that they always end up paying high interest expense for their
deposit mix. Certainly, this will decrease their dealing spread and keeps them always in
pressure. So, their cost of goods sold is very high which is not very good for any
company in this competitive market.

Opportunities:

• Expanding the business area: AB Bank could also boost the number of branches to take
advantage of increase demand among the existing customer with better services and
thus generate more net profit.
• Globalize the Business: As the bank has a strong business brand image, it holds a great
opportunity to globalize their business more extensively.

Threats:
• Decreasing banking business area: Nowadays banking businesses are being narrowing
down and its services and products are also diversifying in other sector of the financial
market.
PEST Analysis:

• Political factors: A tool for the big guys

The banking sector looks all powerful — but it’s susceptible to a bigger giant: the government.

Government laws affect the state of the banking sector. The government can intervene in the
matters of banking whenever, leaving the industry susceptible to political influence. This includes
corruption amongst political parties, or specific legislative laws such as labor laws, trade
restrictions, tariffs, and political stability.

• Economic factors: Easily influenced

The banking industry and the economy are tied. How income flows, whether the economy is
prospering or barely surviving during times of recession, affects how much capital banks can
access. Spending habits, and the reasons behind them, affect when customers borrow or spend
funds at banks.

Additionally, when inflation skyrockets, the bank experiences the backlash. Inflation affects
currency and its value and causes instability. Foreign investors think twice before providing their
funds when a particular country’s currency value is high.

Exchange rates also affect banks globally — stable currencies such as the US dollar impact
other currencies, spending habits, and inflation rates in other countries.

• Sociocultural factors: Consumers want ease

Cultural influences, affect how people see and use banking options. People turn to banks for advice
and assistance for loans related to business, home, and academics. Consumers seek knowledge
from bank tellers regarding saving accounts, bank related credit cards, investments, and more.

Consumers desire a seamless banking experience. And technology is developing to allow

consumers to buy products easier, without requiring assistance directly from banks.

• Technological factors: Smartphones to the rescue

Once, it was expected to visit the local bank to make changes to financial accounts. But not
anymore.

Many banks offer a mobile app to witness accounts, transfer funds, and pay bills on smartphones.
Smartphones can scan cheques, and the bank can process it from their end, at their location. This
change helps to save paper and the need to drive directly to the branch to handle these affairs.

Debit cards are also changing. Chips have been implemented, requiring users to insert their card
into debit machines rather than swiping them. Other countries, such as Canada, have implemented
a “tap” option — tapping the debit card onto the device, requiring no pin, for a transaction to
complete. These changes make it easier on the user to make purchases without required intrusion
from banks.

Even banks themselves are utilizing technology within the workplace. Telecommunicating
through virtual meetings is being embraced. It replaces the need for in-person meetings.
Porter’s Five Forces of AB Bank:

Rivalry among existing competitors: Rivalry among existing competitors are extremely high for AB Bank.
Because the number of the bank in our country is very high.

Threat of new entrants: Threats of new enters are very low. In Bangladesh start a bank business is very much
complex.

Threat of substitute products: It is high for AB Bank.

Bargaining power of suppliers: In this depositor are the supplier of the company. For huge number of bank
the bargaining power of supplier is high.

Bargaining power of buyers: Bargaining power of buyers also high.