MBS SM Group Presentation 2010 v.12

8/3/2019 MBS SM Group Presentation 2010 v.12

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Strategic Management- Group Assignment

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Company : Sampath Bank PLC

University of Colombo

Faculty of Graduate Studies (FGS)

Master of Business Studies -2010


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GROUP MEMBERS - GROUP 02

01 2010/MBS/WE/074 S. DILUXSAN

02 2010/MBS/WE/077 P. M. M. S. HARISCHANDRA

03 2010/MBS/WE/079 K. M. N. KARUNAGODA

04 2010/MBS/WE/099 B. M. PANDITHARATNA

05 2010/MBS/WE/100 M. P. C. PEIRIS


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Contents

Introduction

Business Domain

SWOT Analysis

Core Competencies and Distinctive Competencies

Competition & Competitive Forces

Strategic Groups

Key Success Factors & Competitive Strength

Assessment

Companys Competitive Strategies

Companys Present Strategy

Companys portfolio of SBUs on a BCG matrix

Conclusion & Recommendations


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Introduction

Public Limited Liability Company

Incorporated 10th March 1986

68,887,628 shares listed on the Colombo Stock Exchange.

Licensed Commercial Bank under the Banking Act No.30 of 1988.

Employees : More than 2300

Registered Office (Head Office) is at No.110 Sir James Peiris Mawatha, Colombo 02.

Fitch Rating AA- (lka)

Sampath Bank PLC


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Vision Of Sampath Bank PLC"The Growing Force in Sri Lankan Financial Services"

Values Of Sampath Bank PLC

Create a learning culture that promotes individual and organizational

development as well as promoting innovation and value for customers.

Treat all internal and external customers the way we would like to be treated.

Encourage and promote teamwork in all aspects of behavior.

Open to feedback and demonstrate an eagerness for personal development.

Monitor and demonstrate an impressive commitment to results.

Uncompromising ethical and professional standards of behavior

Introduction Cont


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Name of the Company Holding

%

Nature ofBusiness

Sampath Centre Ltd 94.29 Renting of Commercial Property

Sampath Surakum Ltd 100.00 Primary Dealer in Government Securities

S C Securities (Pvt) Ltd. 51.00 Stock Broking

Sampath Leasing & Factoring

Ltd.

100.00 Leasing & Factoring

Sampath Trade Services

(Hong Kong)Ltd

100.00 Documentary Collection and Documentary Credit

Sampath Information

Technology Solutions Ltd.

100.00 Developing Software Solutions and Maintenance

of Hardware

Name of the Company Holding

%

Nature ofBusiness

LankaBangla Finance Ltd. 22.86 Leasing, Merchant Banking, Stock Broking &

Credit Cards

Subsidiary Companies

Associate Company

Introduction Cont


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Key Operational Segments And Products

CurrentAccounts

SavingsAccounts

Relationship

Banking

TreasuryOperations

DevelopmentBanking

TradeServicesCommercial

& CorporateCredit

ATM / DebitCards

Loans,Overdrafts

Credit Cards

Value Added

Services

MoneyTransferFacilities


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Bank won a bronze Award at the Effie Advertising

Awards 2010.

Bank won three prestigious awards at the National

Business Excellence Awards 2010.

Sampath Vishwa Corporate was selected as the best

in-house developed business related software

application at e-Swabhimani Award 2010.

Achievements

National Best Quality Software Awards 2010 -

Bank won Silver Award


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Video Clip


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Business Domain

Customer Groups

Customer Needs

Technology

Non-Residents


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Having banking license from central bank to engage in banking activities

Leading bank in Sri Lanka using higher degree of ITC

Island wide branch network Diversified product range can cater to all customer segments

High degree of availability and accessibility in island wide

Highly capable Human resources

Modern technology & Innovation

Operations are highly technological, therefore it is difficult to cater the rural population

High cost for maintaining systems

Homogeneous products and services offer by competitive banks

Having reputed history in banking industry

Bank has diversified products to cater all segments of customers.

New product development

Can attract modern and trendy consumers because of technological advancements

new entrance to northern & eastern province

Entrance to foreign market

More new banks enter into the market

Market risk

Credit risk

Operational risk

Interest rate risk

Default risk

Political risk

StrengthStrength

WeaknessesWeaknesses

OpportunitiesOpportunities

ThreatsThreats

S W O T Analysis


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Debit tax Reduction form New Budget will attract more savings to the Banks

Labour laws in place

President re- election stabilize the country political situation18th Amendment to the Constitution

Increase in the GDP & Per Capita income

Interest rates Reduction in deposits & Advances

Seasonal Interest fluctuations

Recent increase in Inflation

2.6 Bill IMF stand by agreement granted in instalmentsEconomy is more towards service sector

Aging Population

More concern on Health

Lifestyle Changes

level of Education

More technical development to increase customer convenience, Mobile Banking, SMS

Banking , Tele- banking,

Online inquire of CRIB obligations

Automated & integrated systems among interbank's

PoliticalPolitical

EconomicalEconomical

SocialSocial

TechnologyTechnology

PEST Analysis


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Operational Assessment

Segment Importance Impact Score

Leadership 5 4 20

Operations 4 3 12

MIS 4 4 16

Marketing 3 -3 -9

Finance 4 4 4

Leadership

Operations

MIS

Marketing

Finance

-10 -5 0 5 10 15 20 25

The Organisation

Weaknesses Strength


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Current Strategic Position

Weaknesses Strength

Leadership

Operations

MIS

Marketing

Finance

-10 -5 0 5 10 15 20 25

The Organisation

Threats Opportunities

-20 -10 0 10 20 30

Competition

Technological

Social

Economic

Political

Environment

Finance


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What are the core competencies and distinctive

competencies

Core Competencies

Greater proficiency in product development

Expertise in integrating multiple technologies to create new products & innovations

Provides consumer benefits

Leveraged widely to many products and markets

It is not easy for competitors to imitate

Distinctive Competencies

Highly capable of human resources

ITC Systems with up to date technology


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Banks In Sri Lanka

Government Banks Private Banks Foreign Banks

Central Bank of Sri Lanka

Kadurata Development Bank

Lankaputhra Bank

Wayamba Development Bank

Sabaragamuwa Development Bank


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Competitive Forces Competitive Rivalry

Exit barriers high in industry not easy to close

Huge initial capital is required imposed by Government

Industry growth high with the market open up in north & East

Product differentiation is very law among rival

Brand identity - evolved over decades

Diversity of rivals not high

Corporate Stake high rapid growth in Share price and profits


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Competitive Forces - Supplier Power

Product or service Unique among most banks

Corporate clients bring lot of money - dictate benefits needed

Short term - switching cost high - one to another

Very few Supplier provide bulk of the supply

Switching costs of suppliers high better to retain exiting

Hardly any substitutes for Money supply

Less threat of forward IntegrationSupplier

=

Customer


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Competitive Forces Threat of new Entrance

Number of buyers very high

Only very few importance individual buyers

Government strict policies after Sakwithi, GoldenKey, etc,

Economies of scale very high super normal profits

Not easy for Customers to switch

Brand identity built over generations

Huge initial capital requirement imposed by Government

Learning Curve & Trade secretes evolved over decades

Share Price

increase

500% times

for 9 yrs


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Competitive Forces - power of buyer

Number of buyers very high

Only very few importance individual buyers

Cost of switching from products-high penalty

Volatile consumer choice and preferences

No Bargaining leverage to mass customers

Buyer information very less on pricing, etc,

Brand identity high

Product differentiation very low

Substitutes available leasing, Hire purchase, 0% installment payment methods

Buyers' incentives high to attract

Little room to backward integration


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Competitive Forces - Threat of Substitution

Switching cost high - penalties have to pay

Close Substitutes available leasing, Hire purchase

Substitutes more convenient & cost effective - 0% installment

payment methods off the shelf

Homogeneous Quality services among major substitutes

Many Type of substitutes available in the Market

Payment

models many

for todays

Customer


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Competitive Position of Major Companies/Strategic Groups


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Competitive Position of Major Companies/Strategic Groups

(Cont..)


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Competitive Strength Assessment Un Weighted Method

Key Success factor Sampath Commercial

HNB NTB Peoples

Bank

Financial Stability 8 6 9 8 6 9

Market Share (Customer Basis) 8 5 8 8 5 9

Customer Trust 7 7 9 8 7 10

Market Strength (Branches) 8 6 8 10 5 9

Interest Rate (Deposits & Advances) 10 9 7 9 9 8Image/Reputation 9 6 10 9 6 9

Product Quality 8 8 9 9 8 7

Customer Service 8 9 10 9 9 8

Human Resources 8 6 9 8 5 10

Convenience of Service 9 9 10 9 8 9

Technology Application 10 8 9 9 9 8

Product Innovation 10 9 9 8 7 8

Simplicity of Procedure (Documents) 8 9 9 9 8 7

Social Responsibility 8 6 8 8 6 10

Achievements 10 6 10 9 6 8

Un weighted Rating 129 109 134 130 104 129


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Competitive Strength Assessment - Un Weighted Method

0 1 2 3 4 5 6 7 8 9

Sampath

SEYLAN

Commercial

HNB

NTB

Peoples Bank

Financial Stability

Market Share (Customer Basis)

Customer Trust

Market Strength (Branches)

Interest Rate (Deposits & Advances)

Image/Reputation

Product Quality

Customer Service

Human Resources

Convenience of Service

Technology Application

Product Innovation

Simplicity of Procedure (Documents)

Social Responsibility

Achievements

4

1

2

3


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Competitive Strength Assessment - Weighted Method

Key Success factor Weight Sampath Commercial

HNB NTB Peoples

Bank

Financial Stability 0.1 0.8 0.6 0.9 0.8 0.6 0.9

Market Share (Customer Basis) 0.1 0.8 0.5 0.8 0.8 0.5 0.9

Customer Trust 0.05 0.35 0.35 0.5 0.4 0.35 0.5

Market Strength (Branches) 0.08 0.64 0.48 0.6 0.8 0.4 0.72

Interest Rate (Deposits & Advances) 0.05 0.5 0.45 0.4 0.5 0.45 0.4Image/Reputation 0.03 0.27 0.18 0.3 0.3 0.18 0.27

Product Quality 0.08 0.64 0.64 0.7 0.7 0.64 0.56

Customer Service 0.05 0.4 0.45 0.5 0.5 0.45 0.4

Human Resources 0.05 0.4 0.3 0.5 0.4 0.25 0.5

Convenience of Service 0.06 0.54 0.54 0.6 0.5 0.48 0.54

Technology Application 0.1 1 0.8 0.9 0.9 0.9 0.8Product Innovation 0.1 1 0.9 0.9 0.8 0.7 0.8

Simplicity of Procedure (Documents) 0.05 0.4 0.45 0.5 0.5 0.4 0.35

Social Responsibility 0.05 0.4 0.3 0.4 0.4 0.3 0.5

Achievements 0.05 0.5 0.3 0.5 0.5 0.3 0.4

Weighted Rating 1 8.64 7.24 8.9 8.6 6.9 8.54


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Competitive Strength Assessment - Weighted Method

0 1 2 3 4 5 6 7 8 9

Sampath

SEYLAN

Commercial

HNB

NTB

Peoples Bank

Financial Stability

Market Share (Customer Basis)

Customer Trust

Market Strength (Branches)

Interest Rate (Deposits & Advances)

Image/Reputation

Product Quality

Customer Service

Human Resources

Convenience of Service

Technology Application

Product Innovation

Simplicity of Procedure (Documents)

Social Responsibility

Achievements

1

2

4

3


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Companys Growth Strategies

A strategy for strong fundamentals

A strategy for innovation

A strategy for a truly national Bank

Growth Strategy

Work towards backing outstanding financial stability with a wide-spread, convenient network of

delivery channels and customer service levels unparalleled in the banking industry.

Expansion into the North & East provinces

Focus will be to maximise the business potential in these provinces for deposit mobilisation,

small to medium credit, remittances and pawning.

The Bank will positively explore non-organic growth opportunities - such as friendly mergers and

strategic investments in the financial and insurance sector, to strengthen the Group.

Enhanced service links with our customers would be a key driver in our strategy to generate more

fee-based and exchange income to supplement profit growth.

Stay on course over the next few years to become a solid financial service provider and a driving

force in a vibrant Sri Lanka


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Branch & ATM Spread

2005 2006 2007 2008 2009 2010November

Branches &

Extension

Offices

83 96 105 114 133 169

No of

Sampath

ATMs

109 131 150 162 186

Growth Strategy


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Differentiation Strategy

To reposition the Banks image as The Bank for Deposits in the Country

To provide the most competitively priced products in the market with

appeal to all customer segments

As the pioneer in the Credit Card Business, the entire card segment will be

energised to become the leading player in the card industry, in the

country.

Product & service innovation.

Companys Compititive Strategies


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Differentiation Strategies

Contingent

Enhanced

Generic

Basic

Sampath Bank strategy is to take

more of their product portfolio into

the Contingent category.


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Functional Strategy

Financial

To maximise recoveries and further improve the NPL ratio.

In an environment of rapidly decreasing interest rates, focus more on Assets and Liability

management and product re-pricing mechanisms, which are vital to minimise any adverse

impacts on Net Interest Margins

Marketing

To drive product promotion and branch expansion with vigor, to maintain growth momentum

HR

To inculcate a target driven culture within the Bank and invest in developing and motivating

our staff to achieve targets.

ITC

Continuously add value to products. Ground breaking technology by highly acclaimed IT

team. Bank to become the nations payment gateway for an e-government initiative by the

national ICT Agency.


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HEAD OFFICE

NUGEGODA

KATUNAYEKA PAY OFFICE

KIRIBATHGODA

FORT

BAMBALAPITIYA

KURUNEGALA

KANDY

MATARA

CARD CENTRE

MAHARAGAMA

DENIYAYA

MORAWAKA

GAMPAHA

DEHIWELA

RATMALANA

PILIYANDALA

EHELIYAGODA

ANURADHAPURA

AVISSAWELLA

NEGOMBO

KULIYAPITIYA

MATALE

PANADURA

CITY OFFICE

OLD MOOR STREET

TISSAMAHARAMA

HEAD QUARTERS

WENNAPPUWA

WATTALA

MORATUWA

PETTAH

KATUGASTOTA

BORELLA

NAVAM MAWATHA

THIMBIRIGASYAYA

RATNAPURA

GALLE

WELLAWATTHA

KOTAHENA

KADURUWELA

MALABE

NARAHENPITA

KALAWANA

WARIYAPOLA

WELLAMPITIYA

MAIN STREET

EMBILIPITIYA

BANDARAWELA

UNICHELA

THAMBUTTEGAMA

DARANIYAGALA

KALUTARA

KOTTAWA

PERADENIYA

ALAWWA

NELUWA

VAVUNIA

MAHIYANGANAYA

HORANA

HARBOUR VIEW SPU

BANDARAGAMA

KADAWATHA

BATTARAMULLA

AMPARA

PELAWATTE

KEGALLE

MINUWNGODA

TRINCOMALEE

ATHURUGIRIYA

YAKKALA

HOMAGAMA

GREGORY ROAD

NITTAMBUWA

AMBALANGODA BRANCH

RAGAMA

MONARAGALA

WADDUWA

KANDANA

VEYANGODA

GANEMULLA

ALUTHGAMA

HATTON

WELIMADA

NAWALA

KIRINDIWELA

NUWARAELIYA

DIGANA

MIRIGAMA

LAUGFS SUNUP

NEGOMBO II

ATTIDIYA

DAMBULLA

PITAKOTTE

MAHARAGAMA SINGER MEGA

BADULLA

KOHUWELA

GIRIULLA

SINGER MEGA WATTALA

BALANGODA

BADDEGAMA

MANNAR

JAFFNA

CHENKALADY

RAJAGIRIYA

KANDY CITY CENTRE

ODDAMAVADY

KALUWANCHIKUDY

SAINTHAMARUTHU

GRANDPASS

CHUNNAKAM

NELLIADY

POTTUVIL

PLATINUM PLUS

NATTANDIYA

KUNDASALE

KOLLUPITIYA

GANGODAWILA

PELIYAGODA

HANWELLA

NOCHCHIYAGAMA

BATTICALOA II

INGIRIYA

KARAPITIYA

BORALESGAMUWA

ANAMADUWA

MARADANA

BUTTALA

PASSARA

MANIPAY

KILLINOCHCHI

KEKIRAWA

PILIMATALAWA

KESELWATTA

MATARA BAZAAR

PUSSELLAWA

ARALAGANWILA

MORATUMULLA

PUTTALAM

SOORIYAWEWA

MIDDENIYA

GALLE BAZAAR

MAWANELLA

BIBILE

KADUWELA

RIKILLAGASKADA

CHANKANAI

KOCHCHIKADE

PANNALA

DEHIATTAKANDIYA

ANURADHAPURA NEW TOWN

CHAVAKACHCHERI

JA-ELA

NARAMMALA

KANDY CORPORATE

GAMPOLA

NIKAWERATIYA

PELMADULLA

AMBALANTOTA

WATTEGAMA

PRIVATE BANKING

MATUGAMA

PASSPORT OFFICE

BATTICALOA

CHILAW

MAWATHAGAMA

HINGURAKGODA

AKKARAIPATTU

KALMUNAI

WELLAWAYA

MORATUWA LAUGFS SUNUP

EMBULDENIYA

KATTANKUDY

TANGALLE

KIRULAPONE

CORPORATE CREDIT

CORPORATE FINANCE

DEVELOPMENT BANKING

SAMPATH VISHWA

TREASURY DEPARTMENT

IMPORTS DEPARTMENT

COMMERCIAL CREDIT

EXPORTS DEPARTMENT

INTERNATIONAL DEPARTMENT

Companys Portfolio of SBUs

SBU : Branches & Departments


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Companys Portfolio of SBUs on A BCG Matrix

SINGER MEGA WATTALA

MARKET SHARE

HIGH LOW

YAKKALA

NITTAMBUWA

RAGAMA

KANDANA

VEYANGODA

GANEMULLA

KIRINDIWELA

MIRIGAMA

NEGOMBO II

KOCHCHIKADE

KATUNAYEKA PAY OFFICE

KIRIBATHGODA

WATTALA

GAMPAHA

NEGOMBO

KADAWATHA

KIRINDIWELA

MIRIGAMA

NEGOMBO

JA-ELA

MARKETGROWTH

LOW

HIGH

BCG Matrix for

Gampha

District

BCG Matrix for

Gampha

District


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How Well Is The Present Strategy Working


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How Well Is The Present Strategy Working (Cont..)


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Ten Years at a Glance



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Conclusion

Healthy performanceBank satisfied solvency test

The continuity of the business is guaranteed

Perceived values to the stake holders are high

Brand excellence

Cost Leadership

Recommendation

More into international market

Seek new market segments/applications for products

Marketing Marketing strategy promotional mix

Advertising, Sales promotion, Personal Selling, Direct Marketing

Enhance, Evaluate & Manage Service Quality

To achieve the market leadership position

Margin Trading

Conclusion and Recommendation


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Thank You !!!

MBS SM Group Presentation 2010 v.12

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