You are on page 1of 33

Dedication

Dedicate to

My Respected teachers who have taugt

us well and has helped us in making us a better


person and have shapped us to compete in the
business world
The deep hearted thanks to Almighty Allah, the most gracious and
generous, who blessed me with potential to complete this project report
successfully. I am especially thankful to our respected teacher “Sir
Shahid Yaqoob”, the main source of indoctrination of our minds.

He provided me his kind guidance; whenever i approached him with any

problem he guided me for the project. Much regards to my beloved

parents and family members whose guidance and encouragements

accompanied

me at each and every step.


EXECUTIVE SUMMARY

MCB (muslim commercial bank) has solid foundation in pakistion of


over 50 years, with a network of over 941 branches, over 750 of
which are automatedbranches,over 222 mcb ATMs in 42 cities
nationwide and anetwork of over12 banks on the MNET ATM switch.

In this projest I have conducted different matix on MCB to know


about the 3 stages of strategy management i.e input stage I which I
have conducted EFE and IFE matrix to know about the banks
response toward its external and internal factor, which are
identified during SWOT analysis. Then in strategy formulation stage
I have conducted space,BCG,grand martix to match the strategies
with the MCB. For MCB it is found through matrix that penetration
(increasing the employess) and diversification strategy(adding new
software house) are attractive. To quantitatively measure these
strategies I have used QSPM (quantity strategy planning matrix) .
and I have finally concluded that although penetration and
diversification is attractive but retranchment and diverstiture is
approriate for the current condition of MCB.

ABOUT MCB

MCB is one of the leading banks of Pakistan with a deposit base of Rs. 368
Billion and total assets over Rs.500 Billion. Incorporated in 1947, MCB soon
earned the reputation of a solid and conservative financial institution managed by
expatriate executives. In 1974, MCB was nationalized along with all other private
sector banks.

The Bank has a customer base of approximately 4 million, a nationwide


distribution network of over 1,000 branches and over 450 ATMs in the market.

During the last fifteen years, the Bank has concentrated on growth through
improving service quality, investment in technology and people, utilizing its
extensive branch network, developing a large and stable deposit base.

History

MCB Bank Limited (Formerly Muslim Commercial Bank Limited) has a solid foundation of over 50 years
in Pakistan, with a network of over 900 branches, over 750 of which are Automated Branches, over 222
MCB ATMs in 41 cities nationwide and a network of over 12 banks on the MNET ATM Switch, which as a
combination is considered to be the core competence of MCB.

MCB has become the only bank to receive the Euromoney award for the fourth time in the last five years.
MCB won the "Best Bank in Pakistan" in 2005, 2004, 2003, 2001, and in 2000 the "Best Domestic Bank in
Pakistan" awards. In addition, MCB also has the distinction of winning the Asia Money 2005 & 2004
awards for being "The Best Domestic Commercial Bank in Pakistan".

Ten years after privatization, MCB is now in a consolidation stage designed to lock in the gains made in
recent years and prepare the groundwork for future growth. The bank has restructured its asset portfolio
and rationalized the cost structure in order to remain a low cost producer.

MCB now focuses on three core businesses namely Corporate, Commercial and Consumer Banking.
Corporate clientele includes public sector companies as well as large local and multi national concerns.
MCB is also catering to the growing middle class by providing new asset and liability products. MCB looks
with confidence at year 2005 and beyond, making strides towards fulfillment of its mission, "to become
the preferred provider of quality financial services in the country with profitability and responsibility and to
be the best place to work".

VISION & MISSION


Vision Statement
To be the leading financial services provider, partnering with our customers for a
more prosperous and secure future.

Mission Statement
We are a team of committed professionals, providing innovative and efficient
financial solutions to create and nurture long-term relationships with our
customers. In doing so, we ensure that our shareholders can invest with
confidence in us.

VALUES

INTEGRITY
We are the trustees of public funds and serve our community with integrity. We
believe in being the best at always doing the right thing. We deliver on our
responsibilities and commitments to our customers as well as our colleagues.

RESPECT
We respect our customer’s values, beliefs, culture and history. We value the
equality of gender and diversity of experience and education that our employees
bring with them. We create an environment where each individual is enabled to
succeed.

EXCELLENCE
We take personal responsibility for our role as leaders in the pursuit of
excellence. We are a performance driven, result oriented organization where
merit is the only criterion for reward.

CUSTOMER CENTRICITY
Our customers are at the heart of everything we do. We thrive on the challenge
of understanding their needs and aspirations, both realized and unrealized. We
make every effort to exceed customer expectations through superior services
and solutions.

INNOVATION
We encourage and reward people who challenge the status quo and think
beyond the boundaries of the conventional. Our teams work together for the
smooth and efficient implementation of ideas and initiatives.

Products and Services

1. Personal Banking
Deposit Accounts

• Khushali Bachat Account


• Mahana Khushali Bachat.
• Pak Rupee Savings Account
• Pak Rupee Current Account.
• Pak Rupee Term Deposit
• Saving 365
• Foreign Currency Savings Account
• MCB Foreign Currency Term Deposit
• Dollar Khushali Account.

Loan Products

• MCB Business
• MCB Car4u
• MCB Pyara Ghar
• Easy Personal Loan

MCB Master Card

MCB Rupee Traveler's Cheques.

2)Corporate Banking

• Cash Management Services


• Working Capital Loans
• Term Loans
• Trade Finance Services

3)Online Services

MCB ATM Services

MCB Mobile Banking

MCB Call Center

MCB Smart Card

MCB Debit Card

4.Virtual Banking
MCB Virtual Internet Banking offers you the convenience to manage and control your banking and
finances – when you want to, where you want to. MCB’s Virtual Internet Banking facility is simple and
secure. And its free of cost. With MCB Virtual Internet Banking you can access any of the banking
services, 24 hours a day, 7 days a week and throughout the year.

MCB Virtual Internet Banking offers a wide range of online services which makes your banking accessible
anytime and from anywhere.

• Detailed Account Summary of all listed accounts.


• Mini-statements of each of the listed accounts showing recent transaction history
for that account(s).
• Statement-by-Period of each of the listed accounts, based on the period
specified.
• Immediate or Scheduled Transfer of Funds between your own accounts, as well
as to third-party accounts setup as beneficiaries, maintaining accounts with
MCB.
• Scheduling of ‘One-Time’ as well as ‘Recurring’ Funds Transfers.
• Payment of utility bills for registered Utility Companies.
• Immediate or Scheduled Bills Payment. Scheduling of ‘One-Time’ as well as
‘Recurring’ bill payments. Option for ‘Full’ or ‘Partial’ payment based on the
payment conditions specified by a particular Utility Company.
• Bulk Salary Transfer for Corporate Customers, to facilitate them in paying salary
to the corporate employees, who maintain accounts with MCB.
• Bulk Funds Transfer for Corporate Customers.
• Cheque Book Request for any of your listed accounts.
• Payment/Transfer Alerts for reminding, in advance, prior to the processing of
specified payments and transfers.
• Personal Alerts for reminding of pre-specified events and occasions.

.5. Islamic Banking

 Deposit Schemes

For customers who are looking for a deposit opportunity where they can purse
their funds and reap halal returns on it, we offer the following products:

· Al-Makhraj Saving Account


· Al-Makhraj Ianat Account
· Al-Makhraj Term Deposit
 Fund Based Facilities
 Ijarah Products

MCB’s Islamic Ijarah, analogous to the English term 'leasing’, is based on the ‘Ijarah wa
Iqtina’ concept which means the sale of the asset to the lessee after the Ijarah has matured.
Types of Ijarah ;Car Ijarah and Equipment Ijarah.
swot analysis

SWOT has a long history as a tool of strategic and marketing analysis. No one knows who first
invented SWOT analysis. It has features in strategy textbooks since at least 1972 and can now be found
in textbooks on marketing and any other business disciplines. It advocates say that it can be used to
gauge the degree of "fit" between the organisation's strategies and its environment, and to suggest ways
in which the organisation can profit from strengths and opportunities and shield itself against weaknesses
and threats (Adams, 2005). However, SWOT has come under criticism recently. Because it is so simple,
both students and managers have a tendency to use it without a great deal of thought, so that the results
are often useless. Another problem is that SWOT, having been conceived in simpler times, does not cope
very well with some of the subtler aspects of modern strategic theory, such as trade-off

Strength

Determine an organisation's strong points. This should be from both internal and external customer.. It is a

distinctive competence when it gives the firm a comparative advantage in the marketplace. Strengths arise from the

resources and competencies available to the firm.

Weakness

. A weakness is a "limitation or deficiency in one or more resources or competencies relative to

competitors that impedes a firm's effective performance"

Opportunities

An opportunity is a major situation in a firm's environment. Key trends are one source of opportunities.
Identification of a previously overlooked market segment, changes in competitive or regulatory
circumstances, technological changes, and improved buyer or supplier relationships could represent
opportunities fro the firm.

Threats

A threat is a major unfavourable situation in a firm's environment. Threats are key impediments to the firm's current

or desired position. The entrance of new competitors, slow market growth, increased bargaining power of key

buyers or suppliers, technological changes, and new or revised regulations could represent threats to a firm's

success.
Swot of MCB

Strengths Weakness
• Largest private sector • Customers having
bank with a network of accounts,with small
941 domestic and 5 amount are not given
foreign branches. some services and
• First bank to dealing as large account
privatize,which has now holders.
become the leader in • Number of branches
market with largest online decreasing because of
ATM network in pakistan. low profitability.
• Pioneer in intriduction of • Job insecurity among
MCB master card and employees because of
RTC. downsizing.
• Good brand name • Experienced but old staff
• Introduction of mobile who are not aware of
banking made easy for know how of modren
customer. technologies.
• Easy access to • A very small foreign
customers at their investment
residential localities • Political pressure from
through large number of vested interest group.
branches.
• Financial weakness
• 24 hour cash access
through ATM. • Internal political issues
• Bank’s emphasis on
consumer banking by • No marketing of advances
providing them with
innovative saving • Low moral in epmloyess
schemes,products and due to low
services suiting there life compensation,no
styles. database.
• Large number of
customers and deposits. • Not many advances to
• First bank to launch agriculture and SMEs.
comprehaensive bil
payment facilities like • Very small foreign
internet banking,ATMs network.
and MCB call centres.
• Attention and sensitivity
to competition in country.
• Mcb instant financing
products for customer
wanting instant loan
facilities.
• Extension and
improvement in services
in domestic as well as
foreign.

opportunities SO WO
• Focus on small • Due to its good brand • By providing same
business,export/impr name MCB can type of services and
ot. attract new dealings to both small
• The formation of new customers and can as well as large
and energatic earn shares in stock account holders it can
marketing teams can exchange. increase customer
increase disbursment • As MCB is the pineer loyalty and number.
of loans and attract bank it can attract • By making sound
new customers investment and policies it can
• Expand islamic loyalty from overcome internal
banking customer\=. politics and can grow
• As it is first to launch in market
• Expansion in foreign internet banking and • By providing good
countries ATMs it can give 24 compensation and job
• Stronger position to hr service in differsnt positions and secirity
recover bad debt. cities and countries. it can get its
• Information • Due to its long time in emploees to work
technology business ,experience productively
• Increase focus on it has strong position • By introducing
diferent types of to recover bad debts. modern technology
customers like for storing data it can
opening women save its important
banking. information for years
• Growing policies of • Recruitment of freash
government for and innovative staff
business provide can help MCB to
MCB with oopertunity grow and compete
to effectively meet effectively.
with busniess people • By following good
requirements marketing strategies it
can in crease its
• Increase ATM market share.
withdrawal limit and • By good resorce
24 hr service to allocation and
remote areas as well increasing investment
• they can capture it can recover its
alarge portioin of financial position.
market is they
expand their branch
network and ATMs to
other countries

Threats ST WT
• Increasing inflation • MCB is pioneer bank • Training and
rates and it can use it to development of
• Privatization of other minimize threats from existing employess
domestic banks new banks. • Hiering fresh staff and
• Highly specialized • Due to its long make new
services provided by duration in banking compensation
foreign banks. sector it has gained policies to motivate
• Inconsistancy of goodwill and loyalty employess.
government policies. which can be used to • Introducing
• Uneven treatment compete new foreign information
with customers. banks in country. technology to
• Growing • Experienced staff compete with new
technological know more tactics entries
advancement. about business by • Increase in number of
• Rising customer providing them new branches in foreign
expectations traing it can grow in countries to compete
• Return on deposit is market with others.
very low • As it is pioneer in
• Slower economic rate introducing master
of country cards,internat
banking and call
• It has threat from
cantre it can use
ALFALAH ,UBL and
innovation to meet
NBP
rising customer
expectations.

Strategy formulation
1)Input stage

EFE MATRIX

External Factor Evaluation (EFE) matrix method is a strategic-management tool often used for
assessment of current business conditions. The EFE matrix is a good tool to visualize and prioritize the
opportunities and threats that a business is facing.

Below given is an EFE matrixof MCB where rating is assigned to each external factor to indicate how
effectively MCB respond to the factor where:

1 = the response is poor.

2 = the response is below average

3 = above average.

4 = superior

OPPORTUNITIES Weight rank weighted score


Focus on small business,export/improt. 0.02 2 0.04
The formation of new and energatic marketing teams
can increase disbursment of loans and attract new
customers
0.04 2 0.08
it can expand its islamic banking
0.06 3 0.18
Expansion in foreign countries 0.07 2 0.14
Stronger position to recover bad debt 0.04 2 0.08
infromation technology 0.05 3 0.15

Increase focus on diferent types of customers like


opening women banking. 0.03 1 0.03

Growing policies of government for business provide


MCB with oopertunity to effectively meet with busniess
people requirements 0.06 2 0.12

they can capture alarge portioin of market is they


expand their branch network and ATMs to other
countries 0.07 4 0.28
Increase ATM withdrawal limit and 24 hr service to
remote areas as well. 0.04 3 0.12

Threats
Increasing inflation rates 0.04 3 0.12
Privatization of other domestic banks 0.06 3 0.18

Highly specialized services provided by foreign banks. 0.04 3 0.12


Inconsistancy of government policies. 0.05 4 0.2
Uneven treatment with customers. 0.06 2 0.12
Growing technological advancement. 0.03 3 0.09
Rising customer expectations 0.05 3 0.15
Return on deposit is very low 0.06 3 0.18
Slower economic rate of country 0.06 2 0.12

It has threat from ALFALAH ,UBL and NBP 0.07 3 0.21


Total 1 2.67

Interpretation

By external evaluation matrix we realize that MCB is perfectly working and making strategies
properly.MCB got weighted score of 2.67 for its external opportunities and threat from its
competitors,economically,socioaly and politically in all these factors MCB is working in better position and
is aware of its threats and opportunities and sorting them out. Besides this score MCB can do better in
future and can survive in industry.

IFE MATRIX

Internal Factor Evaluation (IFE) matrixis a strategic management tool for auditing or evaluating major
strengths and weaknesses in functional areas of a business. IFE matrix also provides a basis for
identifying and evaluating relationships among those areas. The Internal Factor Evaluation matrix or
short IFE matrix is used in strategy formulation.

1= MAJOR WEAKNESS

2=MINOR WEAKNESS

3=MINOR STRENGTH

4=MAJOR STRENGHT

weighted
strenghts weights rank score

Largest private sector bank with a network of 941 domestic and 5 foreign
branches 0.06 4 0.24
First bank to privatize,which has now become the leader in market with
largest online ATM network in pakistan. 0.08 4 0.32

Pioneer in introduction of MCB master card and RTC. 0.05 4 0.2


Good brand name 0.06 3 0.18
24 hour cash access through ATM. 0.03 3 0.09

Bank’s emphasis on consumer banking by providing them with innovative


saving schemes,products and services suiting there life styles. 0.07 4 0.28

Attention and sensitivity to competition in country 0.04 4 0.16

Mcb instant financing products for customer wanting instant loan facilities. 0.04 3 0.12

Extension and improvement in services in domestic as well as foreign. 0.04 3 0.12


Large number of customers and deposits. 0.07 4 0.28

Easy access to customers at their residential localities through large


number of branches. 0.03 4 0.12
Weakness

Customers having accounts,with small amount are not given some services
and dealing as large account holders. 0.03 2 0.06

Number of branches decreasing because of low profitabilit 0.03 2 0.06

Job insecurity among employees because of downsizing 0.05 2 0.1

Experienced but old staff who are not aware of know how of modren
technologies. 0.05 1 0.05
A very small foreign investment 0.04 1 0.04

Political pressure from vested interest group. 0.06 1 0.06


Financial weakness 0.05 1 0.05
Internal political issues 0.03 1 0.03

Low moral in epmloyess due to low compensation,no database. 0.05 1 0.05


Not many advances to agriculture and SMEs. 0.04 2 0.08
untapped markets due to HR and marketing 0.03 1 0.03
Total 1 2.67

Interpretation
In internal evaluation matrix I conclude that MC is also doing better for its strengths and weakness and
trying to work on its weakness and make it opportunities. MCB planning and strategies for its internal
factors need more intention and need to be maintained.

SPACE MATRIX

The SPACE matrix is a management tool used to analyze a company. It is used to determine what type
of a strategy a company should undertake. TheStrategic Position & ACtion Evaluation matrix or short
a SPACE matrix is a strategic management tool that focuses on strategy formulation especially as related
to the competitive position of an organization.

The SPACE matrix can be used as a basis for other analyses, such as the SWOT analysis, BCG
matrix model, industry analysis, or assessing strategicalternatives (IE matrix

The SPACE matrix is broken down to four quadrants where each quadrant suggests a different type or a
nature of a strategy:

o Aggressive
o Conservative
o Defensive
o Competitive
MCB SPACE MATRIX

Financial Strength Rating Average Economic stability Rating Average


Banks revenue increased
by 70% 3 Technological changes -4

Banks profits increased Risk involved in


by 45% 4 business -2

Return on assets has


also increased showing
effectiveness of bank in
proper utilization of
assets. 3 Demand variability -2

Return on equity has also


increased 4 Competitive pressure -3

Political instability -4

High inflation -4

Total 14 3.5 -19 -3.17

Competitive Industrial
advantage Rating Average strength Rating Average
Market share -3 Growth potential 4

Product quality -3 Profit potential 4

Customer loyalty -2 Resource utilization 3

Becoming increasingly Increase in


competitive -3 competition 3

Total -11 -2.75 14 3.5

Total= FS+ ES

3.5+-3.17=0.33
= CA+IS

-2.75+3.5=0.75

Conservative strategy Financial strength


Aggressive
strategy

-6 Industrial
Competitive
0.33
advantage

-6 Defensive Strategy 0.75 strength

Diversification strategy

-6 -6
Boston consultation group matrix

The BCG matrix or also called BCG modelrelates to marketing. The BCG model is a well-known portfolio
management tool used in product life cycle theory. BCG matrix is often used to prioritize which products
within company product mix get more funding and attention.

he BCG model is based on classification of products (and implicitly also company business units) into four
categories based on combinations of market growth andmarket share relative to the largest competitor.

BCG STARS (high growth, high market share)

- Stars are defined by having high market share in a growing market.


- Stars are the leaders in the business but still need a lot of support for promotion a placement.
- If market share is kept, Stars are likely to grow into cash cows.

BCG CASH COWS (low growth, high market share)

- Cash cows are in a position of high market share in a mature market.


- If competitive advantage has been achieved, cash cows have high profit margins and generate a lot of
cash flow.
- Because of the low growth, promotion and placement investments are low.
- Investments into supporting infrastructure can improve efficiency and increase cash flow more.
- Cash cows are the products that businesses strive for.

BCG DOGS (low growth, low market share)

- Dogs are in low growth markets and have low market share.
- Dogs should be avoided and minimized.
- Expensive turn-around plans usually do not help.

BCG QUESTION MARKS (high growth, low market share)

- These products are in growing markets but have low market share.
- Question marks are essentially new products where buyers have yet to discover them.
MCB DATA

Relative market
Division share Industry growth rate BCG Matrix
MCB HIGH LOW CASH COW
Coprate banking HIGH LOW CASH COW
Islamic banking HIGH LOW CASH COW
Online services HIGH HIGH STARS
Personal banking HIGH LOW CASH COW
Virtual banking LOW HIGH ?

Interpretation

The mcb bank made substation progress, recording strong growth in revenue and earnings. Mcb is one of
the leading banks in Pakistan with the market share of 12.5% in industry. Mcb was once in stars but it
didn’t utilize its profits there was a chance of horizontal integration by purchasing RBS shares which
wasn’t available due to the problem in rates of the shares. Hence mcb lies in the cash cows. Product
development and diversification may be attractive strategies for MCB however retrenchment and
divestiture are appropriate.

The Grand Strategy Matrix for MCB

Rapid market growth

Quadrant I Quadrant II

Strong

weak competitive competitive

position Quadrant III Quadrant IV position

slow market growth

The model defines the situation of business through the market growth and their competitive position in
the market. There are four quadrants that the business can be categorized into.

Quadrant I indicates that the firm is in rapid market growth and strong competitive position. Firm can
continue concentrating on their current business. However, firm with excess resources may consider
vertical integration.

Quadrant II indicates that the firm is in rapid market growth and weak competitive position. Firm needs to
evaluate their present approach to the market and identify why the current strategy is not effective. The
firm will then adopt the grand strategy options accordingly.

Quadrant III indicates that the firm is in slow market growth and weak competitive position. Firm should
decrease resources used by the particular business. Another way is that firm should diversify resources
by investing in other businesses in order to expand.

Quadrant IV indicates that the firm is in slow market growth and strong competitive position. Firm have
excellent position and can chose to diversify into more highly profitable areas
INTERPRETATION

As MCB is having strong competitive position but the growth rate of banking sector is low in Pakistan, so
MCB lies in quadrant IV

REASON

MCB had gotten award of ‘the best bank of Asia’ on providing best services. Govt employees get their
salaries from MCB i.e most of govt companies have accounts in MCB. It issues prize bond in local
market.

IE MATRIX

The Internal-External (IE) matrix is another strategic management tool used to analyze working
conditions and strategic position of a business. TheInternal External Matrix or short IE matrix is based on
an analysis of internal and external business factors which are combined into one suggestive model

This IE matrix tells us that our company should hold and maintain its position. The company should
pursue strategies focused on increasing market penetration and product development
I.E MATRIX FOR
MCB 1 2 3

IFE TOTAL 4 5 6

WEIGHTED
SCORE
7 8 9
STRONG(3.0-4.0)
AVERAGE(2.0-1.99)
WEAK(1.0-1.99)

THE 4.0

EFE HIGH(3-4)

TOTAL MEDIUM

(2-2.99) 2.0

WEIGHT

ED LOW

(1-1.99) 1.0

SCORE

INTERPRETATION

AS Mcb EFE Score is 2.67 and IFE score is 2.67 so MCB lies in the V block of the table. Which is hold
and maintain. And MCB should implement incentives strategy this include market penetration and product
development to do futher better and perfectly and again to move in stars by increasing its growth rates
also.

Competitive profile matrix

Competitive profile matrix is an essential strategic management tool to compare the firm with the major
players of the industry. Competitive profile matrix show the clear picture to the firm about their strong
points and weak points relative to their competitors. The CPM score is measured on basis of critical
success factors, each factor is measured in same scale mean the weight remain same for every firm only
rating varies. The best thing about CPM that it include your firm and also facilitate to add other
competitors make easier the comparative analysis.

IFE matrix only internal factors are evaluated and in EFE matrix external factors are evaluated but CPM
include both internal and external factors to evaluate overall position of the firm with respective to their
major competitors.

CPM OF MCB WITH ALFALAH BANK

CPM MCB Alfalah bank

Wtg Wtg
weight rating score rating score

Market share 0.15 3 0.45 2 .3

Advertisement 0.10 2 .2 3 .3

Financial position 0.15 2 .3 3 .45

Varity of products 0.05 3 .15 2 .1

International
network 0.10 1 .1 2 .2

Online banking 0.15 3 .45 3 .45

Customer loyalty 0.10 2 .2 2 .2

Environment 0.05 1 .05 3 .15

Brand recognition 0.05 3 .15 2 .1

Efficiency of staff 0.10 2 .2 3 .3

total 1 2.33 2.55


INTERPRETRATION

The total weighted score of mcb is 2.35 and that of bank alfalah is 2.55 which is average,which is mainly
due to low growth of banking sector in pakistan. The reason for MCB low rate than alflah is due to its
dissatisfied employees and old staff who are not updated and hence decrease the productivity.its
environment is also not friendly and rigid. Customers are not treatd equally.large account holders are
given more services and dealing. On the other hand bank Alfalah has fresh staff and good environment.

3)Decision stage

The quantitative strategic planning matrix

Quantitative Strategic Planning Matrix(QSPM) is a high-level strategic management approach for


evaluating possible strategies. Quantitative Strategic Planning Matrix or a QSPM provides
ananalytical method for comparing feasiblealternative actions. The QSPM method falls within so-called
stage 3 of the strategy formulation analytical framework.

When company executives think about what to do, and which way to go, they usually have a prioritized
list of strategies. If they like one strategy over another one, they move it up on the list. This process is
very much intuitive and subjective. TheQSPM method introduces some numbers into this approach
making it a little more "expert" technique

The Quantitative Strategic Planning Matrix or a QSPM approach attempts to objectively select the
best strategy using input from other management techniques and some easy computations. In other
words, the QSPM method uses inputs from stage 1 analyses, matches them with results from stage 2
analyses, and then decides objectively among alternative strategies.

Stage 1 strategic management tools...

The first step in the overall strategic management analysis is used to identify key strategic factors. This
can be done using, for example, the EFE matrix and IFE matrix.

Stage 2 strategic management tools...


After we identify and analyze key strategic factors as inputs for QSPM, we can formulate thetype of the
strategy we would like to pursue. This can be done using the stage 2 strategic management tools, for
example the SWOT analysis (or TOWS), SPACE matrix analysis,BCG matrix model, or
the IE matrix model.

Stage 3 strategic management tools...

The stage 1 strategic management methods provided us with key strategic factors. Based on their
analysis, we formulated possible strategies in stage 2. Now, the task is to compare in QSPM alternative
strategies and decide which one is the most suitable for our goals.

QSPM FOR MCB

STRATEGIC
ALTERNATIVES
Market
penetrati
on relative
increase diversificat
number ion
of formation
employe of software
e house
OPPORTUNITIES Weight AS TAS AS TAS
Focus on small business,export/improt. 0.02 2 0 - -
The formation of new and energatic marketing teams can increase
disbursment of loans and attract new customers

0.04 3 0.1 2 0.08


it can expand its islamic banking
0.06 3 0.2 2 0.12
Expansion in foreign countries 0.07 4 0.3 3 0.21
Stronger position to recover bad debt 0.04 . - _ _ _
infromation technology 0.05 4 0.2

Increase focus on diferent types of customers like opening women


banking. 0.03 3 0.1

Growing policies of government for business provide MCB with


oopertunity to effectively meet with busniess people requirements 0.06

they can capture alarge portioin of market is they expand their branch
network and ATMs to other countries 0.07 3 0.2 4 0.28
Increase ATM withdrawal limit and 24 hr service to remote areas as
well. 0.04 4 0.16
Threats
Increasing inflation rates 0.04 3 0.1 2 0.08
Privatization of other domestic banks 0.06 1 0.06

Highly specialized services provided by foreign banks. 0.04 2 0.1 4 0.16


Inconsistancy of government policies. 0.05
Uneven treatment with customers. 0.06 2 0.12
Growing technological advancement. 0.03 4 0.12
Rising customer expectations 0.05 2 0.1 3 0.15
Return on deposit is very low 0.06 3 0.2
Slower economic rate of country 0.06 2 0.1 2 0.12

It has threat from ALFALAH ,UBL and NBP 0.07 2 0.1 2 0.14
Total 1 1.7 2

strenghts weights

Largest private sector bank with a network of 941 domestic and 5


foreign branches 0.06 4 0.2 3 0.18

First bank to privatize,which has now become the leader in market


with largest online ATM network in pakistan. 0.08 2 0.2 4 0.32

Pioneer in introduction of MCB master card and RTC. 0.05 1 0.1 2 0.1
Good brand name 0.06
24 hour cash access through ATM. 0.03 3 0.09

Bank’s emphasis on consumer banking by providing them with


innovative saving schemes,products and services suiting there life
styles. 0.07 3 0.21

Attention and sensitivity to competition in country 0.04 2 0.1 3 0.12

Mcb instant financing products for customer wanting instant loan


facilities. 0.04 2 0.08

Extension and improvement in services in domestic as well as foreign. 0.04 3 0.1 3 0.12
Large number of customers and deposits. 0.07 2 0.1 3 0.21

Easy access to customers at their residential localities through large


number of branches. 0.03 2 0.06
Weakness

Customers having accounts,with small amount are not given some


services and dealing as large account holders. 0.03 3 0.09
Number of branches decreasing because of low profitabilit 0.03 2 0.1 2 0.06

Job insecurity among employees because of downsizing 0.05 3 0.2

Experienced but old staff who are not aware of know how of modren
technologies. 0.05 3 0.2 3 0.15
A very small foreign investment 0.04 3 0.1 3 0.12

Political pressure from vested interest group. 0.06


Financial weakness 0.05 3 0.15

Low moral in epmloyess due to low compensation,no database. 0.05 3 0.2 2 0.1
Not many advances to agriculture and SMEs. 0.04 2 0.1 2 0.08
untapped markets due to HR and marketing 0.03 2 0.1 1 0.03
Total 1 1.6 2.18
sum total 2 3.3 4.18

Attractiveness Score

Since related diversification (formation of software houses) has greater total attractiveness score, so mcb
SHOULD FOLLOW related diversification strategy.

Related diversification strategy

A related diversification strategy seeks to add new but related products and services.

MCB is following related diversification strategy because:

MCB has already excess cash which needs to be invested some where

As the growth of banking sector in Pakistan is low due to many factor i.e inflation,GDP,GNP rates etc,so,it
needs to be diversified, to increase market share.

Suggestions
1. Training can be providedwith job rotation so each of employee is capable of
doing others work in their absence and in case of emergency.
2. As MCB is earning a lot of profit stock options should be given to employees.
3. Workers need more computer training.
4. MCB needs to invest more in technology and bring all banking procedure up to
date.
5. ATM network needs to be up to dated more to handle transfer,deposite bills,bill
payment and print statements. This will free up a lot of staff work.