CHAPTER #6

SWOT ANALYSIS

SWOT analysis is an acronym that stands for strengths, weakness, opportunities, and threats

SWOT analysis is careful evaluation of an organization’s internal strengths and weakness as well

as its environment opportunities and threats.

“SWOT analysis is a situational which includes strengths, weaknesses, opportunities and threats

that affect organizational performance.”1

“The overall evaluation of a company strengths, weaknesses, opportunities and threats is called

SWOT analysis.”2

In SWOT analysis the best strategies accomplish an organization’s mission by:

1. Exploiting an organizations opportunities and strength.

2. Neutralizing it threats.

3. Avoiding or correcting its weakness.

SWOT analysis is one of the most important steps in formulating strategy using the organization

mission as a context, managers assess internal strengths distinctive competencies and weakness

and external opportunities and threats. The goal is to then develop good strategies and exploit

opportunities and strengths neutralize threats and avoid weaknesses.

6.1 STRENGTHS:

6.1.1 OLDEST INSTITUTION:

NBP in one of the oldest bank of Pakistan and first nationalized bank Hence its customer base is

strength from this plus point as customers have more confidence in the bank. The additional

value services as the privilege for the bank.

6.1.2 ALTERNATE DUTIES IN SBP ABSENCE

The NBP performs additional services for its customers as well as the other bank customer in the

absence of SBP.

6.1.3 MORE DEPOSITS THAN OTHER BANK

NBP has the relative competence in having more deposits than the other bank. This is because of

the confidence the customer have in the bank. The bank being the privileged and oldest bank in

banking sector of Pakistan enjoys this edge over all others, lacking it.

6.1.4 EMPLOYEE BENEFITS

The employers at NBP are offered reasonable monetary benefit. Normally two bonuses are given

Eid-Ul-Fitar & Eid-Ul-Azha. This serves as an additional benefit and competency for the bank

and a source of motivation for the employees.

6.1.5 BROAD NETWORK

The bank has another competency i.e. it has broad-basses network of branches throughout the

country also more than one branch in high productive cities. The customers are provided services

at their nearest possible place to confirm customer satisfied.

6.1.6 STRICTLY FOLLOWED RULES &REGULATION:

The employees at NBP are strict followers of rule & regulation imposed by bank. The disciplined

environment at NBP bolsters its image and also enhances the over all out put of the organization.

6.1.7 PROFESSIONAL COMPETENCE

The employees at NBP here have a good hold on their descriptions, as they are highly skilled

Professionals with back ground in business administration, banking, economics etc. These

professional competencies enable the employees to understand and perform the function and

operation in better way.

6.1.8 HEALTHY ENVIROMNMENT

The working condition in the NBP branch here is very conductive and favorable for better

output. The informal environment affects the performance of the employees in a positive way.

6.1.9 RELATION BETWEEN STAFF AND OTHER EMPLOYESS

The bank enjoys a good plus point when it comes to the employee manager relationship the

hearing as removing of discrepancies if any, between the employees, and between the manager

and employees.

6.2 WEAKNESSES

6.2.1 LACK OF MARKETING EFFORT:

The bank does not promote its corporate image, services, etc on a competitive way. Hence lacks

far behind in marketing effort .A need for aggressive marketing in there in the era marketing in

now becoming a part of every organization.

6.2.2 NBP UNDER POLITICAL PRESSURE

The strong political hold of some parties and government and their dominance is affecting the

bank in a negative way. They sometime have to provide loan under the pressure, which leads to

uneven and adjusted feeling in the bank employees.

6.2.3 FAVORITISM AND NEPOTISM

The promotions and bonuses etc in the bank are often powered by senior’s favoritism or depends

upon their wills and decision. This adds to the negative factors, which denominate the employees

thus resulting in affecting their performance negatively.

6.2.4 LACK OF FINACIAL PRODUCT

The bank falls far behind when the innovative and new schemes are considered. It has not been

involved in the tug of war between the competitors to the accounts and strengthens the existing

customer base. This stands out to be the major incompetence and weakness of the banks.

6.2.5 INEFFICIENT COUNTER SERVICES IN THE RUSH HOURS

During the rush hours, the bank is founded out to be a total flop to handle the mob of people

peaking from windows and doors. The bank has deficiency to operate in the stages of rush hours

where the people find them services entangled in a situation of nowhere because they are not

well served.

6.2.6 LACK OF COMPUTERIZED NETWORK

The bank lack the strength of being powered by the network of computers, which have saved

time, energy and would have lessened the mental stress, the employees have currently. This

would add to the strength if it were powered by network of computers.

6.2.7 LACK OF MODERN EQUIPMENT

The bank lacks the modern Equipment that is note counting machine computers. Even if there is

any equipment they lack to fall in the criteria of being rearmed as update and upgraded

6.2.8 UNEVEN WORK DISTIBUTION.

The workload in NBP is not evenly distributed and the workload tends to be more on some

employees while others abscond away from their responsibilities, which server as a demotivation

factor for employees performing above average work.

6.3 OPPORTUNITIES

6.3.1 ELECTRONIC BANKING

The world today has become a global village because of advancement in the technologies,

especially in communication sector. More emphasis is now given to avail the modern

technologies to better the performances. NBP can utilize the electronic banking opportunity to

ensure on line banking 24 hours a day. This would give a competitive edge over others.

6.3.2 MICRO FINANCING

Because of the need for micro financing in the market, there are lot of opportunities in this

regard. Other banks have already initiated, now the time has arrived when the NBP must realize

it and take on step to cater an ongoing demand.

6.4 THREATS

6.4.1 EMERGENCE OF NEW COMPETITORS

The bank is facing threats with the emergence of new competitors especially in terms of foreign

banks. These foreign banks are equipped with heavy financial power with excellent and

innovative ways of promoting and performing their services. The bank has to take initiative in

this regard or will find itself far back in competition.

6.4.2 POLITICAL PRESSURE BY ELECTED GOVERNMENT

The ongoing shift in power in political arena in the country effects the performance of the bank

has to forward loans to politically powerful persons which create a sense of insecurity and

demoralization in the customer as well as employees.

6.4.3 DOWNSIZING

The bank is currently acting upon the policy of downsizing which threaten the environment of

the bank Employees feel insecurity in doing their jobs and work, hence affecting the over all

performance of employees negatively.

6.4.4 CUSTOMERS COMPLAINTS

There exists no regular and specific system of the removal of customer complaints. Now a day a

need for total customer satisfaction is emerging and in their demanding consequences customer's

complaints are ignored

6.5 COMPETITIVE ANALYSIS

Porter’s five forces model: 3

This approach is widely used for competitive analysis. It is because of the high intensity of

competition among companies there five main competitive forces.

6.5.1 Rivalry among competitive firms:

It is a very powerful force among the competitive forces the strategies pursued by one firm

can be successful only to extent that they provide competitive advantages over the

competitor. These competitive strategies may be lowering prices, best quality series. The

NBP offering very low charges an demand draft, telegraphy transfer, mail transfer and give

other additional services to the customers and to the Nation. Because NBP is a “Nation’s

Bank”.

6.5.2 Potential entry of new competitors:

Whenever new firms ca easily enters a particular industry, the competition increases. The

gout restriction, tariffs, patents etc can stop new firm to enter into the business as per

Banking industry is concerned this market is already very situated in Pakistan and there are

banks with quality services and low charges. So there is no threat to NBP from potential

entry and NBP is also a public sector bank because of that no other new bank not takes over

it.

6.5.3 Potential Development of substitute products:

This is the third factor affecting the competitions. There may be some other product can be

substitute the product of that industry. For example banks offering sawing schemes in

Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete them

in this field. If they offer low rates than GPOs so people will go to deposit in GPOs. People

concentration high rates so that’s why sawing PLS accounts are more then current accounts.

The next examples will ATM which substitute presenting cheques at counter and encash it.

The NBP is lacking in this field. It must improve in this field to compete the competitors.

6.5.4 Bargaining Power of Suppliers:

The bargaining power of supplier affects the intensity of competition, especially when there

are a large number of suppliers. In case of banks the suppliers are customers they supply the

money to banks. Now they must offer good services, quality, and safety. Low charges etc to

customers. In this field NBP is very good. B/C at offers good quality services to customers.

They charge low charges on remittances. So that’s it is competitions other banks.

6.5.5 Bargaining Power of Consumers:

When customers are concentrated or large, or buy in volume, their bargaining power

represents a major force affecting intensity of competition. Now the number customers in

Pakistan for banks are very high. Banks offering variety of products and services to their

customers. NBP have a large number of customs. Now it must offer good services and

products to their customers to attract them to come to NBP.

References

1. Daft l Richerd “Management” 4th Edition Pages 254, 256, 269.

2. Kottler Philip “Marketing Management” Millennium Edition Page 76.

3. Fred R. David “Strategic Management Concepts Cases” 7th edition.