It is the first stage of Strategy-Formulation Analytical Framework the following techniques are used to gather information:    EFE

Matrix IFE Matrix CPM Matrix

THE EXTERNAL FACTOR EVALUATION (EFE) MATRIX OF HABIB BANK LIMITED

KEY EXTERNAL FACTORS: OPPORTUNITIES
1 WEIGHT RATINGS WEIGHTED SCORE

Develop value added services combined with corporate banking relationships, cash management services to large and medium sized corporate clients. Expand its new technological advancement like; tele-banking and internet banking facilities in order to serve the customer more efficiently. Further reduction in intermediation costs possible, with improving technology. Improve and expand its foreign operations successfully. Simplifying procedures and policies will help reduce waste of time. HBL needs to focus on the untapped segments in its target market such as:  Educational institutes.  Telecommunication. Proper training of staff can help in capturing a larger market by providing excellent customer services. To strengthen its Human Resource Policy in order to increase job satisfaction of its employees.

0.10

4

0.3

2

0.05

3

0.15

3 4 5 6

0.025 0.025 0.05 0.05

2 2 3 2

0.05 0.05 0.15 0.1

7

0.10

4

0.4

8

0.10

4

0.4

10 1 4 0. that opportunity is considered less important and rated as 4.05 0.10 0. in the present date. Consolidation in the banking sector resulting in increased competition.05 2 0.1 0.  Expansion of foreign operations is definitely considered a great opportunity but HBL has already become international quite largely therefore. New standards of customer services resulting in the provision of outstanding customer services by other banks in the market.1 14 0.  Reducing costs through technology is also essential but technology improvement alone is a better opportunity.THREATS 9 10 Growing global technological advancement The threat of inconsistency and government policy regarding to political and regional situation which makes the environment uncertain.  Expanding its technological base is yet another important opportunity as no organization can stay long in the market without advancing its ways of doing business therefore it is rated as 3 which is reasonably important.4 13 0.3 11 12 0. and HBL already has tried to reduce costs through technology therefore it is a comparatively less opportunity and has been rated as 2.2 EXPLNATION: Opportunites:  Developing value added services is crucial for the survival of HBL as is the case with any service organization. Economic instability and worldwide recession.10 2 4 0.4 3.3 0. . The Rupee Travelers Cheque (RTC) sales volumes may be affected on account of regulatory restriction imposed by SBP on issuance of large value denominations.10 3 3 0. Continuous changes and improvements is the need of the day and therefore it has been rated 4 which shows that it has been considered the most appropriate opportunity for HBL to strive at. TOTAL 0.

 Economic instability and worldwide recession are acting as a major threat to any industry therefore its rated as 4.  HR policy’s revision is highly required now a days as job motivation and satisfaction are crucial to the success of any firm therefore this is an important opportunity and is rated as 4.  Targeting untapped market segments is a fair enough opportunity but not very essential for HBL right now as it has already touched certain market segments and is in no need for extensive penetration in diversification so its rated as 2. better services by competitive banks and changing government policies with technological advancements are most feared and should be confronted and overcome by providing better services and competencies The weighted score from 1 (weakest) to 4 (strongest) is 3.  Training is very important in today’s world as every aspect of a service organization lies in the hands of front desk representatives therefore it is rated as 4 being the most important opportunity.  Consolidation in the banking sector resulting in increased competition but competition is already fairly large in the banking sector so it is a less intense threat and rated as 2.2.  Customer services by other banks are improving that attracts a large customer base so it a very important threat and rated as 4. processes and procedures is very important for the easy running of the bank. providing value added services to customers and motivating employees through improved HR policy. . Simplifying tasks. therefore it is rated as 3.  The Rupee Travelers Cheque sales volumes is affected on account of regulatory restriction imposed by SBP but there are bigger threats than affected sales volumes of RTCs therefore it is rated as 2. Threats faced by HBL show that economic instability. These opportunities show that HBL should focus more on training employees.  Government policies fluctuate greatly and simultaneously affect the firm’s success greatly therefore it is rated as 3. Threats:  Growing global technology is imperative and a very significant threat and therefore its rated as 3 because technology is a lethal weapon if used in the right way.

10 3 0. both locally and Internationally.45 3 0.15 2 0.THE INTERNAL FACTOR EVALUATION (IFE) MATRIX OF HABIB BANK LIMITED KEY INTERNAL FACTORS: STRENGTHS 1 WEIGHT RATINGS WEIGHTED SCORE The brand name ‘HBL’ has a well established credibility associated with it. 0.30 . textile and cement industry.30 7 Sense of insecurity in the employees serving at low profitable branches due to the down sizing.15 2 0.05 3 0.15 3 0.05 8 Lack of proper training has resulted in a nonprofessional attitude in some employees. 0. 0.05 1 0. 0. HBL is the oldest and is the richest in experience. 0.30 2 Being the pioneer of banking in Pakistan. 0.10 4 0. The Bank’s Rupee Traveler Cheques have been market leaders for the past six years.15 5 HBL has forged strategic alliances with international banks for expanding its network further. 0.10 4 0.40 WEAKNESSES 6 HBL follows complex procedures which are not only wastage of time for the bank itself but also for the consumers.40 4 Veteran and experience private management group also involved in other interests like.

and proper maintenance of branches. HBL training programs for its employees and same working conditions among branches are an important indicator which needs a lot of attention by its management.05 10 Highest number of branches effecting the proper maintenance and difficulty in providing same working environment at the each branch TOTAL 0.6 total weighted score which on a 1 to 4 scale shows more than average.05 1 0.10 2 0.20 1 2. HBL’s oldest and richest experience in banking has positively impacted a large range of customers. The ratings are given to each critical success factor.6 EXPLANATION: By analyzing above factors it is noted that HBL’s credibility due to its brand name is an important factor to consider. Moreover.9 Now as it is a privatize bank that is why government support to HBL decreased as it was in past. 0. COMPETITIVE PROFILE MATRIX OF HBL: As we know that this matrix identifies a firm’s major competitors and its particular strengths and weaknesses in relation to the firm’s strategic position. Overall HBL receives a 2. indicating HBL’s strong internal position but needs some considerations on part of employees training. where  1 = major weakness  2 = minor weakness  3 = minor strength  4 = major strength . customer services.

17 0.16 0.6 0.  Market share: HBL have market share of more than 50% where as UBL have approximately 9% and Al Falah 7% of the market share.08 0. UBL and Al Falah don’t have sufficient online facilities even in big cities.3 2.1 2.15 0.3 0.4 0.2 0.15 Bank Al Falah Ratings Scores 3 4 2 1 3 1 3 0. As compared to HBL.3 0.6 0.  Electronic Commerce: HBL have the facility of online banking almost in every branch in big cities and much of this facility in smaller cities as well.6 0.08 0.15 0.3 0.45 0.3 0.68 0.17 0. Competitive Profile Matrix Habib Bank Weights Ratings Scores 0.3 2.1 1 2 3 4 4 2 2 3 0. . their major critical success factors we came up with the following matrix.After analyzing HBL and its 2 competitors United bank limited and Bank Al Falah.17 0.15 0.6 0. HBL have a satisfactory product base.45 0.5 Critical Success Factors Customer Service Product Diversification Electronic Commerce Market Share Global Expansion Profits Offered Advertising EXPLANATION:  Customer service: Customer service of HBL is not that satisfactory and they need to improve on this aspect.08 0. the service of competitors is good and their customers are happier with them.91 United Bank Ratings Scores 3 4 2 1 2 1 1 0. But it still have room for improvement.  Product diversification: The variety of products being offered to customers is more impressive of UBL and Al Falah.6 0.

. That is why people recognize them.e. that are United bank limited and Bank Al Falah. form the total we can see that HBL have more score than its competitors.  Advertizing: HBL and Al Falah have many advertising campaigns going on (i. And so. it is performing more successfully than its competitors. UBL doesn’t stress that much on advertizing. Global expansion: Global expansion of HBL and UBL are relatively just ok but Al Falah is an international bank so it have more global expansion than others. commercials. newspaper adds etc). Thus.  Profits offered: HBL offer higher profits than its competitors that is how it is able to attract higher customer base. But UBL and Al Falah offer lower rates that’s why it’s their major weakness.

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