Assignment

International Business
MGT2133

Submitted by:
Name: Md. Shakil Khan
Batch: 44
ID: 2016210000035
Section: 3
Program: BBA

Submitted to:
Aruna Anwar
Southeast University
 Letter of Transmittal

Date: 31 May, 2020

Dear Madam,

1. This is my truthful declaration that our assignment on “Standard Chartered Bank”

which we have prepared is not a copy of any other assignment made by any other
students.

We also express our honest confirmation in support to the fact that the said assignment has
neither been used before to fulfill to any other course related purpose not it will be submitted to
any other persons or any authority in future.

Yours Truly,

Md. Shakil Khan

ID: 2016210000035
Batch: 44
Section: 3
Department of Bachelor of Business Administration
School of Business Studies
Southeast University

Southeast University, Dhaka – 1213

 Table of Contents

 Introduction

 Background of Standard Chartered Bank

 International Business and its Components

 Standard Chartered Bank’s Organizational Structures

 The PESTLE Analysis of Standard Chartered is given

below

 Market Analysis

 International Market Analysis

 Recommendations

 Conclusion
 Introduction

Overview of Standard Chartered Bank (SCB): Standard Chartered is a leading international

banking group committed to building a sustainable business over the long-term. They operate in
some of the world's most dynamic markets and have been for over 150 years. They mainly
provide a wide-range of products and services for personal and business customers across 70
markets.1 More than 90 per cent of our income and profits are derived from Asia, Africa and the
Middle East. In the last nine years Standard Chartered Bank has reported record income and
profits. Twenty-four of our markets now deliver over US$100 million of income, fourteen over
US$100 million in profit. Listed on the London, Hong Kong and Mumbai stock exchanges, we
rank among the top 20 companies in the FTSE-100 by market capitalization.

Standard Chartered Bank in Bangladesh: The first branch of the Chartered Bank was
established in Chittagong in 1948, followed by another branch in Dhaka in 1966. Since the
formation of Standard Chartered Bank in 1969, the bank has gone for expansion in the country.
According to SCB’s Bangladesh website, in 2000, SCB acquired Grindlays Bank’s business in
Bangladesh and in 2006 it acquired American Express Bank’s commercial banking business,
which has allowed the bank to become the biggest foreign bank operating in Bangladesh. SCB
has invested heavily in people, technology and infrastructure to sustain the growth of the bank.
The bank provides both consumer banking and wholesale banking services in Bangladesh and
uses market knowledge and experience to serve institutional and corporate clients in the best way
possible. SCB focuses on improving technology and this has allowed the bank to offer customers
services such as Phone Banking, i-Banking and e-Lending. Standard Chartered currently has 26
branches, 57 ATMs and 7 financial kiosks and employs over 1300 people. The bank has
branches in six cities-Dhaka, Chittagong, Khulna, Sylhet, Bogra and Narayanganj as well as
branches in Dhaka EPZ and Chittagong EPZ.

Background of Standard Chartered Bank: Standard Chartered Bank was formed in 1969
through the merger of two separate banks, the Standard Bank of British South Africa and the
Chartered Bank of India, Australia and China. These banks had capitalized on the expansion of
trade between Europe, Asia and Africa.

The Chartered Bank: The Chartered Bank was founded by James Wilson following the grant of
a Royal Charter by Queen Victoria in 1853. The bank opened in Mumbai (Bombay), Kolkata and
Shanghai in 1858, followed by Hong Kong and Singapore in 1859. The traditional trade was in
cotton from Mumbai, indigo and tea from Kolkata, rice from Burma, sugar from Java, tobacco
from Sumatra, hemp from Manila and silk from Yokohama. The bank played a major role in the
development of trade with the East following the opening of the Suez Canal in 1869 and the
extension of the telegraph to China in 1871. In 1957 Chartered Bank bought the Eastern Bank,
together with the Ionian Bank's Cyprus Branches and established a presence in the Gulf.
The Standard Bank: The Standard Bank was founded in the Cape Province of South Africa in
1862 by John Paterson, and started business in Port Elizabeth in the following year. The bank
was prominent in financing the development of the diamond fields of Kimberley from 1867. It
later extended its network further north to the new town of Johannesburg when gold was
discovered there in 1885. The bank expanded in Southern, Central and Eastern Africa and had
600 offices by 1953. In 1965, it merged with the Bank of West Africa, expanding its operations
into Cameroon, Gambia, Ghana, Nigeria and Sierra Leone. In 1987 Standard Chartered Bank
sold its stake in the Standard Bank, which now operates as a separate entity.

Standard Chartered Bank’s Organizational Structures Bank is conservative by nature and

activities. Since it is financial institution, conservativeness is important here. Standard Chartered
Bank follows top down approach in communication. The hierarchical ladder of the chain of
command of Standard Chartered Bank is shown below:
Chain of command of selected departments is given below:

Mission and Vision of Standard Chartered Bank:

Mission of Standard Chartered Bank

Leading the way (Being proactive).Standard Chartered Bank wants to be proactive in the sense
that they want to exceed customers’ expectations, that is they want to come up with products and
services having such features, before customers can start expecting them from SCB.

Vision of Standard Chartered Bank

The vision of Standard Chartered Bank is TO BUILD A WORLD CLASS BANK.

Beside this they also have the following vision:
• To be trusted and respected around the world.
• To deliver services that will continuously delight our customers.
• To treat every customer with respect and integrity.
To share a vision of the future and work together to realize it.
Goals of Standard Chartered Bank
Goals are numerical targets, which are financial goals.
• Translate financial goals into activity goals.
• Ensure the ownership of your goals.
• Set daily and weekly goals.
• How much, what and when.
• Manage goals daily

Values of Standard Chartered Bank

Standard Chartered Bank has five values and these values are key to their success. These values
determine how the employees achieve their goals, the way they work together and how it feels to
be a part of Standard Chartered Bank.

SWOT Analysis

The SWOT analysis comprises of the organization’s internal strength and weakness and external
opportunity and threats. SWOT analysis gives an insight of what they can do in future and how
they can compete with their existing competitors. This tool is very important to identify the
current position of the organization to others, who are playing in the same field and also used in
the strategic analysis of the organization.

Let’s see the SWOT of Standard Chartered Bank in Bangladesh:

S = Strength

 SCB is the largest MNC Bank operating in Bangladesh. It has a very strong wide range
of client base and is operating efficiently in this country.
 SCB enjoys the first mover advantage because of its entrance in Bangladesh for over 50
years. SCB has already established a satisfactory financial standing and is far ahead
from the new and existing entrants in the banking industry of Bangladesh. Their growth
rate was quite impressive in the recent past which was due to the increase in number of
deposits and the loans and advances.
  SCB is the first bank in Bangladesh to issue Money link (ATM) card. As the market
leader, they showed the most substantial corporate strength among the foreign banks by
grabbing the opportunity that exists in the market.

W = Weakness

 After the acquisition of Grindlays and American Express the customer of these three
banks become the customers of just one bank and that is Standard Chartered Bank. The
numbers of employees are not enough to give proper services to this huge number of
customers.
 SCB at present is one of the few banks that offer a very low rate on deposits. Banks, who
is offering better prospects, now enjoys customers switching to them as SCB offers low
deposit rates and has set the minimum balances too high.
 Standard Chartered Bank has more and high fees and charges compared to its rivals.
Less promotional activities for both new and existing products.

O = Opportunity

 The banking sector in Bangladesh is growing very fast, which is a big opportunity for
Standard Chartered Bank to expand their business. More Branches around Dhaka
specially and all over Bangladesh will enable SCB to capture more market share, and
hold a stronger competition against local banks.
 Standard Chartered Bank can expand their product line to meet broader range of customer
needs.
 The bank increases their number of employees to give prompt services to the customers
and can improve the service quality of Consumer Banking service.
 The Bank can arrange some training sessions to teach their employees about the services
of other departments of SCB so that can guide the customers properly.
Standard Chartered Bank can increase the number of their offset ATMs in Khulna,
Bogra, Sylhet, Narayanganj and Chittagong to make their services available to most their
customers.
T = Threats

 Because of the restriction imposed by government on expansion of the bank despite of

their keenness SCB cannot increase their number of branches.
 The interest rate on a loan is much higher than other banks (i.e. Eastern Bank Limited,
Dhaka Bank etc). As a result people are reluctant to take loan from Standard Chartered
Bank, which can be a great threat for this bank.
 People do not feel comfortable with the high charges of SCB. The service charges of this
bank are much higher than other banks and this can cause them to lose their valuable
customers.
National and global political unrest can be another threat for the bank. In today’s
economy, substantial amount of savings is remaining idle.

The PESTLE Analysis of Standard Chartered is given below:

Political
1. Impact of Brexit
2. Geopolitical instabilities in Korea and Middle East
Economical
1. Impact of interest rate and inflation
2. Impact of economic growth
3. The rise of renminbi (RMB) to change market dynamics
Social
1. Growing social acceptance of online and card payments
2. Favorable demographics to increase online payment
Technological
1. Technological Advancements to supplement growth
2. Opportunities in Digital Banks
Legal
1. Legal & Regulatory compliance
2. Money laundering charges and involvement in risky diamond business
Environmental
1. Minimal impact on environment
2. Positive outlook for sustainable investing in Asia

Market Analysis
There are four types of banks in Bangladesh- public banks (i.e. state owned banks), private
commercial banks (privately owned banks), foreign commercial banks (subsidiaries of
multinational banks) and specialized banks. According to Bangladesh bank, there are 53 banks in
the country with funds under management of $ 32 billion.

Out of the banks, 4 are public banks, 32 are local private banks, 9 foreign banks, and 8 are
specialized banks. SCB currently holds a 4% market share in the industry based on funds under
management.

Sonali Bank is the largest public commercial bank while Pubali Bank is the largest private bank
and Standard Chartered is the largest amongst the foreign banks. As of June 2000, there were
almost 6,038 branches of commercial banks all over the country with around 40% situated in
urban areas and 60% situated in rural areas. All scheduled banks of the country are regulated by
Bangladesh Bank.

Currently the market is deemed to be oversaturated with banks according to many experts, and
this they feel had a large impact on high inflation in the country through their effect on money
supply. Bangladesh Bank has not provided permission for setting up of new banks since 2001 to
tackle this problem, but recently many new applications have been made to Bangladesh Bank for
permission to set up new banks.

Because of the high number of banks, competition is rather fierce in the industry. Although all
banks provide a wide range of services to a wide range of clients, within the industry, different
classes of banks have tried to create niches for themselves. For example, the public banks have
significantly more branches than other banks and therefore have a stronghold in providing
banking services in rural areas. On the other hand local businessmen and local corporate clients
prefer banking with local private banks and thus local private banks have emphasized on serving
such clientele as well as professionals. Most of the multinationals in Bangladesh carry out their
banking relationship solely with foreign banks. Thus serving global corporate has been the
stronghold for foreign banks operating in Bangladesh.
Standard Chartered has emphasized on providing corporate banking services, enjoying a great
reputation among both local and foreign corporate clients and is one of the leading corporate
banks in the country. However it has also invested the most among foreign banks in consumer
banking and has much more branches compared to other foreign banks. But still it is lagging
behind local public and private banks when it comes to consumer banking.

Segmentation
Marketing segmentation is the process of divide customers into different groups, within which
customers possess similar characteristics and requirements (McDonald and Dunbar, 1998). The
bank segments their customers as follows:

Individual customers: the main services provided to this segment are savings and account
services, mortgages, credit cards etc…

SMEs: this sector has grown rapidly in the footprint countries of the bank in Asia, Africa and the
Middle East, but most of them have not enjoyed the global standard banking services (SCB,
2009). The most suitable services for the segment are cash management, trade finance; lending…

Corporate & Institutional customers: these are large customers with extensive financial needs.
In this segment the bank provides wholesale banking services i.e. clearing and collection
services, liquidity management, treasury, advisory services…

Islamic customers: this group of customers uses financial services in line with Islamic law
(Shariah). Therefore the bank provides financial services that are in conformity with Shariah.
(SCB)

The segmentation enables the bank to understand each segment’s needs, thus design the most
appropriate marketing mix for each segment. Positioning is the next stage after segmentation and
targeting. Positioning is about how a company wants the customers to perceive its brand and
products (Ennew and Waite, 2007). The position of the bank in the global marketplace is as in
Figure 1.

The bank has a high quality of services in comparison with those of other international financial
institutions. However the accessibility is lower than other global rivals (HSBC, CitiBank,
Deustche Bank…), since the bank does not have strong presence in Europe and the US, but has a
strategy to focus in Asia, Africa and the Middle East (SCB).
The Marketing Mix for Consumer banking
Ennew and Waite (2007) define Marketing mix as the elements determining customers’
experience. Those elements include “4Ps”: Product, Price, Promotion and Place. They illustrate
the process of how firms design 4Ps to encourage purchase decisions as in Figure 2.

Different from tangible goods, services are intangible, inseparable, variable, perishable and
unable to own. Therefore in service sector it is necessary to add 3 more “P”: People, Physical
Evidence and Process to form the 7Ps of service marketing mix (Booms and Bitner, 1981). In
this paper, the marketing mix of Standard Chartered Bank for consumer banking segment
(serving individual and SME customers) will be investigated.

Product

The bank provides a wide range of consumer banking services which is divided into 3
components: wealth management, retail products and SME products (SCB). The well known
brand name in consumer banking in the main countries where the bank operates has been
affirmed by prominent accolades granted by international organizations e.g. the Best Retail bank
of the year in Singapore (Asia Banking and Finance Award 2009) (SCB, 2009)

Price

Pricing for institutional customers is decided on a case by case basis based on customer
behaviour and risk. The bank makes attempts to provide optimal payment solutions to the
customers by applying advanced payment systems, reducing processing time, eliminating manual
tasks… In 2009 the bank adopted Employee Banking Program (EBP), offering competitive
pricing of banking services to the employees of corporate clients, which has delivered impressive
results of 600 clients of wholesale banking and 3,750 SME clients registered for EBP (SCB,
2009).

Promotion

The bank has allied with hotels and travel corporations throughout the footprint regions (i.e. IHG
hotels, Best Western, Octopus Travel…) to offer a lot of promotion programs for the Standard
Chartered Visa card. Card holders can enjoy a 3rd night free in the many luxurious hotels in
tourism centers in India, Dubai, Vietnam, Singapore, Japan and Australia (SCB).

Place – Network and Branch distribution

The bank’s organization structure is divided into two main units: the Consumer banking unit and
the Wholesale banking unit. The consumer banking unit serves 14 million individual customers
via nearly 1,700 branches and 5,679 ATMs in Hong Kong, Singapore and Malaysia… (SCB,
2009). The acquisition of banking units of American Express in 2008 provided the bank with an
access to 10,000 private individual and institutional customers. The deal also helped the bank
open more branches in India, Taiwan (SCB, 2009). The bank also provides online banking
services for both individual and corporate customers to save their time and resources. Intensive
distribution is applied for simple and traditional banking services, while more complicated
products are distributed selectively in some branches.

People

The bank has over 77,300 employees of whom only 2,000 are UK based. To manage and
maintain staff efficiency, the bank adopted an online system which allows each employee to
update their annual objectives, thus managers and employees can easily agree and supervise
performance just at a click. Opportunities for promotion are in the spotlight to attract talented
employees. There are many training programs offered to emerging leaders. Bonus and reward
scheme are applied across the globe with homogeneity (SCB, 2009).

Physical Evidence

The bank has a strong presence with nearly 1700 branches worldwide. All the branch buildings
and transactions materials like check books, statements… are well designed with the green and
blue logo, thus make the clients bear in mind the brand image of the bank.

Process

In consumer banking, a Consumer Charter is adopted to deliver fast and accurate service, provide
best solutions to clients’ financial needs, and the final goal is to be the bank customers
recommend to their friends and colleagues (SCB). One example of efficient process in consumer
banking is the investment advisory service of the bank. A customer-focused process with 6 steps
is applied in the bank as in the chart.

Recommendations:
Challenges and recommendations for improvement

Every work has to face some limitations. There was no exception in the case of mine while I was
pursuing my internship program. I had to come across many challenges to acquire the exact
outcome from my activities. Basically the challenges I faced could be categorized in two types.
 • Problems identified in the organization.
• Problems due to lack of adequate and appropriate academic preparation

Problems identified in the organization

• Sometimes Branches do mistake in the application form for which we have to bother our
customer several time,

• Sometime Branches use to send application form without checking the customer’s
account for which we have to hold that application processing due to insufficient fund.
• Sometime different departments send their application form without following the proper
process which causes double issue.
• Kiosks are very less.
• Sometime prior customer used to call in BTPO dept. directly to know current status of
their application’s which is huge time consuming.

Recommendations for improvement:

• They should arrange more training for the employees of their branches.
• They should update a new system by which customers will get to know their applications
current situation by online rather than calling in BTPO dept.
• They should set up more Kiosks.
• They should introduce some requirement to apply for Bonds.(like keep enough balance
in account.)
Conclusion:

Presently SCB is doing excellent business in Bangladesh. It is arguably the leader in providing
banking services to global corporate clients but facing some competition from the likes of HSBC
and Citibank. Although HSBC and Citibank are globally much bigger banks, SCB’s history,
experience and relationships in Bangladesh will help retain leadership position in this segment in
the future as well. When it comes to serving local corporate clients, SCB is still one of the top
banks in Bangladesh. However it is facing much stiffer competition in this regard not only from
foreign banks but also from local private banks. Indeed, there is a trend among local corporate
clients to switch to local banks as they are being offered more personal attention, higher
flexibility and better services at lower rates and charges from local banks. SCB will have to focus
more on this segment in order to hold on to its market position by coming up with more
competitive products and services and building up healthier relationships with customers.
When it comes to consumer banking, SCB is leader among foreign banks but lagging far behind
local banks. SCB has to set up much more branches, cut down charges and fees and provide
more competitive products to gain a stronger foothold in this segment.
Overall it is observed, that SCB will continue to focus on corporate banking in the future just as
other foreign banks, it will simultaneously invest hugely in consumer banking and go for
expansion through branch openings and mergers to create a strong market position in that
segment as well.