8/11/17

Political-Legal Technological

EXTERNAL FACTOR
EVALUATION OPPORTUNITIES AND THREATS

ADULTA, KIM GIESON

MINA, ALLIQUE PENN R.

Economical Socio-Cultural

Strategic Management
Case Study : Allied Bank
Limited
Presented by: Rizwan Qamar M. Phil

Fellow at Faculty of Contemporary Studies,

National Defence University, Islamabad

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LIST FACTORS

ASSIGN WEIGHTS

STEPS IN RATE FACTORS

CREATING AN LIST FACTORS
EFE MATRIX
MULTIPLY WEIGHTS
BY RATINGS

TOTAL ALL
WEIGHTED SCORES

OPPORTUNITY OPPORTUNITY

So, the ABL has an opportunity to attract the customers

The policies of the new government to uplift the
by giving them attractive schemes.
economy and pursue financial sector reforms are
They have wide area network in all over the Pakistan, if
expected to yield positive results in the banking industry
ABL can make it possible the fast delivery of fund from
of the country.
abroad through online banking, it can cover the major
As a result of the different steps taken by the
market of Pakistan which still is capturing by Hundi.
Government regarding the betterment of the economy,
Diversification towards Islamic Banking Services
small borrowers are attracted to get the financing and
Provide Privileged or Preference banking like MCB and
start small businesses.
UBL

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THREAT THREAT

First threat is that of political influence. Three boards of

The Law and order situation disturb the economic
directors are of government. So that they can influence
situation and hence the Banking Industry
on the decisions of the ABL. The biggest threat in the
Power shortage brutally hinders the performance of
banking sector is the continuous downfall of the
Industrial sector which get loans from Banks.
countrys economy since the last few years.
Tight monetary policy and high interest of 15% by the
New Privates Bank coped with emerging new Technology
SBP reduce the interest of people to get expensive loans
of IT and with huge investments.
from Banks.
Increase in the withholding tax by the Govt. on
The high inflation rate due to deficit financing by the
transactions.
Govt. is also a big threat to ABL.
The higher discount rates offered by the SBP

Assign a rating to each factor. Rating should be

between 1 and 4.
It indicates how effective the firms current
strategies respond to the factor.
1 = the response is poor. 2 = the response is
ASSIGN below average. 3 = above average. 4 =
WEIGHTS TO RATE FACTORS superior.
EACH FACTOR Each key factor should be assigned a weight
Weights are industry-specific. Ratings are
ranging from 0.0 (low importance) to 1.0
company-specific.
(high importance).
The ratings in external matrix refer to how
The number indicates how important the
effectively companys current strategy responds
factor is if a company wants to succeed in an
to the opportunities and threats.
industry.
The sum of all the weights must equal 1.0.

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Add all weighted scores for each factor..

Total weighted score is simply the sum of all
individual weighted scores.
The total score of 2.5 is an average score.
In external evaluation a low total score
MULTIPLY Multiply each factor weight with its rating. TOTAL ALL indicates that companys strategies arent well
This will calculate the weighted score for each designed to meet the opportunities and
WEIGHTS BY factor.
WEIGHTED defend against threats
RATINGS SCORES

KEY SUCCESS FACTORS WEIGHT RATE WEIGHTED KEY SUCCESS FACTORS WEIGHT RATE WEIGHTED
SCORE SCORE
OPPORTUNITIES THREAT
Govt. reforms to up lift economy 0.10 4 0.4 Political influence on the Banks activities 0.07 1 0.07

Can Capture Hundi market by providing fast cash 0.07 3 0.21 Continuous downfall of the economy 0.08 2 0.16
transfer
The higher discount rates offered by the SBP 0.05 1 0.05
Diversification towards Islamic Banking Services 0.06 4 0.24

Law & order situation damaging economic 0.08 2 0.16

Provide Privileged or Preference banking like MCB 0.07 3 0.20
activities
and UBL
Tight monetary policy and high interest of 0.06 2 0.12
Micro Finance to the farmers and house hold 0.07 3 0.21
15%by the SBP
industry
The high inflation rate due to deficit financing 0.04 1 0.04
SME Financing 0.05 4 0.20
bythe Govt.
Personal loans and consumer banking 0.04 3 0.12 0.06 2 0.12
Power shortage brutally hinders the
performance of Industrial sector
Expansion in the rural area of the country 0.06 4 0.24
TOTAL 1.00 2.66
International expansion through joint venture 0.04 3 0.12

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A total weighted score of 2.66

indicates that Allied Bank Limited is
responding well to opportunities and Phil, RQM. (2013). Allied Bank Limited: A Strategic Management Study.
Retrieved from: https://www.slideshare.net/mrrizwanqamar/allied-bank-
threats above the average in its limited

industry. David, F.R. (2009). Strategic Management: Concepts and Cases. 12th ed.

Sources: FT Prentice Hall

It also indicates that ABL has more Bhandari, A. (2013). Strategic management: A Conceptual Framework.
McGraw Hill Education. New Delhi, India
opportunities than threats.