KOLEJ UNIVERSITI ISLAM SULTAN AZLAN SHAH

MGT 6034
INTERNATIONAL BUSINES

GROUP MEMBERS:

NAME COURSE MATRIC NUMBER

NUR AFIQAH BINTI NOR BBA(ENT) I14100169

HAZLAN

ANIDA BINTI AHMAD BBA(ENT) I14100056

NUR FATIN FARAHAIN BBA(MKT) I14100125

BINTI ROSLAN

LECTURER NAME:

DR ANAS BIN TAJUDIN

SEMESTER 4 SESSION 2016/2017 MGT 6043

 Strategies Of OCBC BANK In International Business
Anida Ahmad, Nur Afiqah, Nur Fatin Farahain
BBA(ENT), BBA(ENT), BBA(MKT)
Faculty Management and Information Technology
Kolej Universiti Islam Sultan Azlan Shah
Bukit Chandan, 33000 Bandar Diraja Kuala Kangsar
Perak Darul Ridzuan, Malaysia.
Anidaahmad94@gmail.com, fikahhazlan@gmail.com, farahain@gmail.com

Abtract

Strategic planning is the process of deciding which programs will be implemented by the
organization and the estimated amount of resources to be allocated to each program over the next
few years. The purpose of this report is to evaluate the OCBC BANK BERHAD company based
on the case study and comprehend how the company develop strategic intent for their company
organisations following the analysis of external and internal business environments. Researchers
will analyse the strategic management process as firm used to achieve strategic competitiveness
and earn above-average returns. Researchers will discuss the strategy formulation that includes
business-level strategy and corporate-level strategy. It also aims to identify market place
opportunities and threats in the external environment and to decide how to use their resources,
capabilities and core competencies in the firm’s internal environment to pursue opportunities and
overcome threats. By the end of this assignment, future strategy will be mentioned as well as my
recommendations about Nestle that will fit into strategic orientation in order to perform better in
their business world. And continue to develop and implement its learning approach as the chosen
large company by using different strategies
Introduction

OCBC Bank offers a comprehensive range of innovative financial solutions in consumer

banking, business banking, international banking, global treasury and investment management.
In addition, the OCBC Group has diverse subsidiaries that are involved in insurance, financial
futures, regional stockbroking, trustee, nominee and custodian services, property development
and hotel management.

OCBC Bank is the longest established Singapore bank, formed in 1932 from the merger
of three local banks, the oldest of which was founded in 1912. It is now the second-largest
financial services group in Southeast Asia by assets and one of the world’s most highly-rated
banks, with an Aa1 rating from Moody’s. Recognised for its financial strength and stability,
OCBC Bank has been ranked Asean’s strongest bank and among the world’s five strongest banks
by Bloomberg Markets for five consecutive years since the ranking’s inception in 2011.

OCBC Bank and its subsidiaries offer a broad array of specialist financial and wealth
management services, ranging from consumer, corporate, investment, private and transaction
banking to treasury, insurance, asset management and stockbroking services.

OCBC Bank’s key markets are Singapore, Malaysia, Indonesia and Greater China. It has
over 620 branches and representative offices in 18 countries and regions. These include the more
than 330 branches and offices in Indonesia under subsidiary Bank OCBC NISP and more than 90
branches and offices in Hong Kong, China and Macau under OCBC Wing Hang. OCBC
Bank’s private banking services are provided by its wholly-owned subsidiary Bank of Singapore,
which operates on a unique open-architecture product platform to source for the best-in-class
products to meet its clients’ goals.

OCBC Bank's insurance subsidiary, Great Eastern Holdings, is the oldest and most
established life insurance group in Singapore and Malaysia. Its asset management subsidiary,
Lion Global Investors, is one of the largest private sector asset management companies in
Southeast Asia.

After being actively involved in offering Islamic banking products and services since
1995, OCBC Bank launched its wholly-owned Islamic banking subsidiary, OCBC Al-Amin
Bank Berhad, on 1 December 2008. OCBC Al-Amin offers products and services which are
developed based on the applicable Shariah contract and with the endorsement of the Shariah
Advisory Committee to meet the requirements of both Muslims and non-Muslims alike. Features
such as fixed financing rates and profit sharing have attracted a growing group of loyal
customers who wish to draw from the Islamic principles of fairness, caring and accuracy.

OCBC Bank has been operating in Malaysia for more than eight decades and is today
among the leading foreign banks in the country. Incorporated in 1994 as OCBC Bank (Malaysia)
Berhad, the bank has grown to become one of Malaysia’s largest foreign banks. Its Islamic
banking subsidiary, OCBC Al-Amin Bank Berhad (OCBC Al-Amin), established in Malaysia in
2008, is the country’s first Singapore-based Islamic Bank. OCBC Malaysia’s total branch
network currently stands at 41, comprising 31 conventional and 10 Islamic banking ones as at 1
November 2014.

BANK ABILITY

Purpose

We help individuals and businesses across communities achieve their aspirations by

providing innovative financial services that meet their needs.

Customers

We listen to our customers and understand their needs. We build enduring relationships with
them by delivering superior products and quality service.

People

We treat each other fairly and with respect. We support our colleagues and invest in their
development to help them realise their full potential. We recognise and reward outstanding
performance.

Teamwork

We, as team members, actively support each other across the organisation as we work
towards our common purpose. As individuals, we expect total responsibility from ourselves.
Integrity

Fair dealing is the basis of our business. We assume everything we do is in full public view.

Prudent risk taking

We are prudent risk takers because our customers rely on us for safety and soundness.

Effectiveness

We actively invest in infrastructure, process improvement and skills to lower our delivery
costs. We do the right things right the first time, on time, every time.

Fair Dealing

At OCBC, we understand that our continued success as a financial services group is

dependent on our ability to build enduring relationships with our customers. This involves
treating our customers with respect and integrity, and consistently dealing with them in a fair
and professional manner. That is why the element of Fair Dealing features prominently in our
core values. Specifically, our value of ‘Integrity’ underscores Fair Dealing as the basis of our
business.

We seek to deal fairly with our customers by:

- providing them with clear, relevant and timely information to help them make informed
decisions

- recommending only products that are aligned with their financial objectives and risk
profiles

- training and certifying our sales employees so that they are equipped to give appropriate
advice and recommendations

- treating their feedback and complaints seriously, and ensuring that issues are addressed in
an effective and prompt manner
 Our employees are constantly reminded on the importance of Fair Dealing, which is further
reinforced through their performance and compensation review framework. In addition, the
other Fair Dealing-related processes, systems and policies across the organisation are
periodically reviewed and enhanced to ensure their continued effectiveness in helping us
deliver the desired customer outcomes.

2.0 PRODUCT
OCBC Bank is to help individuals and businesses across communities achieve their
aspirations by providing innovative financial services that meet their needs.to understand OCBC
Bank’s below the line marketing processes and requirements and implement the appropriate
Marketing Resources Management suite to achieve the following :
Centralise the entire marketing processes – right from the initiation of the brief to the
final delivery of the communication.
Integrate Marketing Resource Management with OCBC Bank’s campaign management.
Create a digital Asset Management library for OCBC Bank’s digital assets seamlessly
integrate OCBC Bank’s marketing divisions spread across China , Malaysia And
Singapore.
Offer robust security controls at all levels of the process and create customised templates
to capture and audit all processes.
Analysis Strategies of Company in International Business
INTERNAL ANALYSIS
Here, discuss about the nature of OCBC Bank’s internal environment analysis including
Pest analysis and Swot analysis. Evaluate the role of resources and capabilities in developing
core competencies, which are the sources of the bank’s competitive advantages. In this section,
researched will discuss the techniques bank can use to identify and evaluate resources and
capabilities and the criteria for selecting core competencies from among them. It also discusses
the value chain concept and examines four criteria to evaluate core competencies that establish a
competitive advantage to OCBC Bank’s Company.

1.0 RESULT AND ANALYSIS

PEST analysis is an analysis of the external forces that can affect business processes.
External factors include Political, Economic, Social and Technological By identifying and
evaluating external opportunities and threats, the company will be able to develop a vision and
mission as a basis for appropriate strategies to achieve long-term goals. Here are the results of
PEST analysis at Bank OCBC :

PEST ANALYSIS
POLITICS
Bank OCBC NISP has never been involved in political activities and has never provided
support for political activities. On the other hand, in accordance with its vision and mission to be
recognized as a Bank that is known for being caring, Bank OCBC consistently contributes to
social activities in line with the Company’s Social Responsibility policy.
ECONOMICS
Bank OCBC’s view on the outlook of the banking industry in Indonesia in 2012 is to
remain relatively stable in terms of asset growth, capital and profits, in consideration of the
industry having adequately strong resistance to the global economic fluctuations. Prolonged
economic crisis in Europe and the U.S. economy still yet to recover, the Bank felt compelled to
pay attention to its credit portfolio more closely, as well as anticipating if the global recession
would affect the Bank’s portfolio. One of the anticipatory strategies was splitting Commercial
Credit Risk Division into Corporate Credit Risk Management Division and Commercial Credit
Risk Management Division. Hence, credit portfolios can be monitored more thoroughly and
effectively. Additionally, credit decisions can be made quicker, whether for preventive measures
or for capitalizing on potential business opportunities.
SOCIAL
Corporate social responsibility (CSR) programs undertaken by the Bank focus on
improving the quality of education. Activities are primarily carried out to neighbouring
communities to Bank offices and other areas as needed. Implementation of CSR programs takes
the form of granting scholarships, introduction of banking activities, and increasing children’s
motivation to learn science. CSR activities are also held in collaboration with various
organisations having clear and proven track record in other CSR related programs.
TECHNOLOGY
Advances in information technology, globalization, and financial market integration
combined with emerging cases and issues, render banking as a complex business. The
Information Technology Steering Committee is authorized to determine and monitor the Bank’s
IT strategic plan, including monitoring the direction of IT development in line with the Bank’s
IT strategic plan and Business Plan.

SWOT ANALYSIS
STRENGTH
Power of Good Corporate Governance.
Bank OCBC (which focus on consumer and SME customers), and strengthened by the
power of the implementation of good corporate governance and risk management
measures, generating a strong new force.
WEAKNESS
Weaknesses in internal control, including the results of a review of the internal controls
over information technology.
Weaknesses in risk reporting process and implementation in some units.
GCG self assessment results in 2011 indicate that there are minor flaws in the
implementation of GCG in Bank OCBC NISP does not have a significant impact and can
be corrected immediately.
OPPOTURNITY
Strengthen and equip the sales force personnel to support the growing number of
customers.
There are commercial segment is a segment with a high sustainability and has a broad
market opportunity.
Trade finance.
Make an investment in the wider business network.
API implementation.

THREATS
Target for Bank OCBC Bank Private to be the 5th largest (Top 5).
The development of the global economy slowed in 2012 due to the financial crisis,
especially in Europe and the United States.
The increase in risk faced by the banking system due to the complexity of the bank’s
activities.
Price competition and the number of "new players" in the mortgage (Housing Credit).
API implementation.

Position of company is quadrant IV, namely the relationship between strength and threat.
That means is companies must optimize the company’s internal strengths to avoid threats from
outside the company. Although the main focus of the company is in quadrant IV, it does not
mean quadrant I, II, and III does not mean not being addressed. The company also had to
optimize the strength to take chances, take the opportunity to fix weaknesses and avoid threats.
 Figure 1: Cartesian IFE and EFE Matrix Diagram
　　　　

Value Chain of OCBC Bank

Primary activities
Operations
The customer service officers conduct anti-money laundering searches to check whether new
customers are eligible to open an account with the Bank. It is necessary to conduct this check so
to ensure that there are no criminal records or any ongoing litigation. These requirements are set
by Monetary Authority of Singapore (MAS) to ensure that there are transparency in the daily
transactions.
The deposits that a bank received can be used to make loans and investments in order to
earn profit (Burton and Brown 2009). This is one way that OCBC Bank makes its profit over the
year.
According to Securities Investors Association Singapore (2011), OCBC Bank was a
runner-up of Most Transparent Company Award in Finance category. Information such as
annual reports, financial results, internal business review, researches are all clearly stated in
their official website. This allows its shareholders and stakeholders to be informed of its various
information easily.

Marketing and Sales

The competition in banking industry in Singapore is intense. Other than the other two local
banks, DBS and UOB, OCBC Bank has to be aware of foreign banks like Citibank and HSBC as
well (Vandenbrink and Hew 2005). OCBC Bank has to differentiate itself from the competitors.
OCBC Bank leverages on social media to connect to customers directly as this is a
way to promote themselves. For example, OCBC Bank uses twitter or facebook to send first-
hand news to its customers’ mobile.
According to OCBC Bank (2011), they conducted intensive market research through
surveys with customers. After the market research, Frank by OCBC was released to attract the
Generation Y with its new cards with 130 over cool designs.OCBC Bank conducts events to
promote their financial products. Example is the upcoming OCBC Cycle Singapore April 2013
that aim to attract more customers to sign up for credit cards.
Service
Service is the key success factor for a bank to strive in the environment. Educated customers
want good customer service being provided to them. By providing good customer service,
OCBC Bank can have the competitive advantage against other competitors. One of the
competitive advantages is OCBC Bank has 20 branches opened on Sunday for full banking
services which provides convenience for customers (OCBC Bank 2013)
The after-sales service is to follow up with customers whether the financial products and services
being provided to them are satisfactory. This way, it makes customers feel important and OCBC
is able to receive feedback from them to make further improvements.
Secondary activities
Human Resource
Customer service is essential for a banking industry. A well-trained staff is able to deliver good
customer experience for the customers. It is essential to provide the adequate training for front
line staff, so that they are able to handle customers, and satisfy their needs. According to OCBC
Bank (2011), they increased training-related expenditure by 35% to focus on providing the best
training skills to its staff. Other than gaining product knowledge and providing good customer
service, these front-line staff are trained to collate these feedback and report to the management
for further improvements.
OCBC Bank offers career advancement opportunities for different talents across different entities
and regions (OCBC Bank 2011). This shows that OCBC Bank values its employee through
employee engagement and assist as much as possible for these employees
Technology development Customers are able to do money transaction through internet banking
or mobile banking nowadays. There is no need to be physically at the ATM machine or at the
branch. OCBC Bank introduced a “Scan and Pay” function for Android users in March 2011.
Thus technology is important for OCBC as this will ensure smooth transaction for customers to
execute, and at the same time ensure customers that the transactions are successful.

Conclusion of value chain

OCBC Bank should focus on its operations, marketing and sales, human resource and technology
of both primary and activities in the value chain in order to maximise its profit margin. There is a
linkage between the primary activity, Service and the secondary activity, Human Resource
Management. For example, customer service officers are the front line staff. Human Resource
Department has to provide training programmes to educate the customer service officers to
execute excellence customer service and relevant product knowledge to the customers
CONCLUSIONS

Based on the analysis conducted in the previous chapter, we can conclude some of
results as follows:
1. Using strategic planning and information technology, the company can identify and
evaluate key indicators needed to perform the development of a system that is aimed at
creating a strategic planning firm. These indicators can be seen from the results of the
SWOT analysis, Value Chain, CSF and KPI and PEST were investigated in Bank OCBC
NISP.

2. Based on the results of the SWOT analysis in Bank OCBC NISP at the opportunity
suggests that the company has a great opportunity to achieve the vision and mission as
well as meet the needs of customers of Bank OCBC NISP through the implementation
of strategies that have.

3. been planned. It can be seen from the results of the analysis of value chain that
shows the achievements of Bank OCBC NISP after applying a predetermined strategy
planning.

4. Through the results of the SWOT analysis, analysis of CSF and KPI (Esteves de
Sousa, 2001) also known that the company can capture every opportunity and make it
into a goal and a new business plan.

REFERENCE

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Competitiveness and globalisation (Asia-Pacific 4th Edition). South Melbourne: Cengage
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Zainal Abidin Mohamad, Ho Jo Ann and Wong Foong Yee. (2014). Strategic Management .
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