Benazir Bhutto Shaheed university lyari, Karachi

Term Report Of: strategic

management

Submitted By: Shamsa Akbar

Mehwish Hakeem
Nida Abdul Haq
Shahrukh Khalid

Submitted To: Sir Mudsir

Department Of: Business Administration

Date of Submission:

TABLE OF CONTENTS
1. Introduction of national bank of Pakistan (NBP)
2. Vision and mission
3. Business profile
 Location
  Financial position
 Board of Directors
 products portfolio
4. Competitors of NBP
5. SWOT analysis
STARTEGY FORMULATION
6. External factor evaluation (EFE)
7. Internal factor evaluation (IFE)
8. Competitive profile matrix (CPM)
9. Internal – External (IE) Matrix
10. Grand strategy matrix
11. The quantitative strategic planning matrix (QSPM):

1. NATIONAL BANK OF PAKISTAN

It is one of the largest commercial bank operating in Pakistan. It has redefined its role and has
moved from a public sector organization into a modern commercial bank. The Bank's services
are available to individuals, corporate entities and government. While it continues to act as
trustee of public funds and as the agent to the State Bank of Pakistan (in places where SBP does
not have presence). It has diversified its business portfolio and is today a major lead player in the
debt equity market, corporate investment banking, retail and consumer banking, agricultural
financing, treasury services and is showing growing interest in promoting and developing the
country's small and medium enterprises and at the same time fulfilling its social responsibilities,
as a corporate citizen.
The National Bank of Pakistan (NBP) is a major Pakistani commercial bank with headquarters
in Karachi. The bank provides both commercial and public sector banking services. It is a lead
player in the debt equity market, corporate investment banking, retail and consumer banking,
agricultural financing, treasury services.
National Bank of Pakistan has developed a wide range of consumer products, to enhance
business and cater to the different segments of society and meet its social responsibilities. Some
schemes have been specifically designed for the low to middle income segments of the
population. It has implemented special credit schemes like small finance for agriculture, business
and industries, administrator to Qarz-e-Hasna loans to students, self-employment scheme for
unemployed persons, public transport scheme. The Bank has expanded its range of products and
services to include Shariah Compliant Islamic Banking products. It has also put in place
a remittance service for overseas Pakistanis to send their money back to Pakistan.
National Bank of Pakistan has so many branches all over the world like in
Canada, Egypt, Bangladesh, Hong Kong, Turkmenistan, Kyrgyz Republic, South
Korea, Germany, France, Bahrain, Kazakhstan, Uzbekistan, Azerbaijan,
Japan, Afghanistan, and Saudi Arabia  USA. There are uncountable numbers of ATM machines
of NBP found in almost every next city of Pakistan it also provides Islamic banking system
which is most preferable.
With more than 1300 branches across the country and 23 international branches, NBP has won
the award of bank of the year recently. This is one old working bank in Pakistan, with the
passage of time they updated their system and now few year ago they started Islamic banking.
Because of its old working bank most of government schemes are lunched under this platform
like.
 Prime minister business youth scheme
 Agriculture farm program
 Home financing scheme

2. Vision of National Bank of Pakistan:

"To be recognized as a leader and a brand synonymous with trust, highest standards of service
quality, international best practices and social responsibility."
Mission Statement of National Bank of Pakistan:
NBP will aspire to the values that make NBP truly.
3. BUSINESS PROFILE
Location:
Head Office NBP Building I.I. Chandigarh Road, Karachi, Pakistan.

Financial position:
Revenue: 50.569 billion
Net income: 19.034 billion
Total assets: RS.447 billion

Board of Directors:
NBP, Board of Directors list consist the following members and their
designation.

NAME DISIGNATION

Ali Raza Chairman & president

Dr.waqar masood Director

Ifthikhar ali malik Director

Iskandar hayat jamali Director

Azam faruque Director

Ibrar A. Mumtaz Director

Mian kausar hameed Director

Products NBP offers:

1. Demand Drafts
2. Mail Transfers
3. Pay Order
4. Traveller’s Cheques
5. Foreign Remittances
6. SWIFT System
7. Short Term Investments
 8. National Income Daily Account (N.I.D.A)
9. Equity Investments
10. Trade finance and other business loans
 Agriculture Finance
 Agricultural Credit:
 Production Loans:
 Corporate Finance
 Cash Management Services

4. COMPETITORS OF NBP:

5. SWOT ANALYSIS:
Strength (S):
1. The bank acts as the agent to the state bank of Pakistan for handling provincial/federal
government receipts and payments on their behalf.
2. NBP one of the largest financial institutions of Pakistan with 8 million of customer base
3. NBP holds 24.6% share of time and demand deposits in the country
4. NBP has an extensive domestic branch network of 1254 branches located all over
Pakistan.
5. NBP is working as right arm government of Pakistan.
 6. Leading bank in agriculture financing with the market share of 15%.
7. In Top 5th banks of Pakistan
8. The NBP performs additional services for its customers as well as the other bank
customer in the absence of SBP.
9. Employees are very much loyal to NBP. Employee’s turnover is very low in NBP.
10. NBP has the relative competence in having more deposits than the other bank.
11. The national bank of Pakistan (NBP) recently won the globally recognized "the bank of
the year in Pakistan 2015" award.
12. A national bank brand image is its major strength.
13. Another competitive edge that the bank has on the rest of the competitors is its expanding
business worldwide catering for a large and vast group of customer and maintaining
standards of excellence globally.
14. The bank also has a presence in 23 international locations including the USA, United
Kingdom, Europe and the Far East.
15. The bank also provides services as trustee to National Investment Trust (NIT), Long-
Term Credit Fund (LTCF) and Endowment Fund for student loans scheme.
16. Intellectual commitment to change.
17. There is also strength of NBP that 130 branches are online. It helps the speedy services
giving to the customers. There is also help in checking the balances and daily transactions
just at one key press.
18. It has a diversified business portfolio and is today a front end player in the debt equity
market, agricultural financing, corporate investment banking, retail and consumer
banking, treasury services.
19. Taking growing interest in developing the country's small and medium enterprises.
20. Leading bank in agriculture financing amongst commercial banks with the market share
of 15%.

Weakness (W):
1. There is no concept of job rotation.
2. Award and promotion policies are not implemented in all branches.
3. Inefficient counter services in the rush hours.
4. NBP under political pressure.
5. Poor environment of NBP.
6. In many branches management is not up to date.
7. In small area’s branches employees have less education.
8. Favouritism and Nepotism.
 9. Public dealing is not effective.
10. Lowest Internal Control
11. Unsatisfactory corporate culture of the Bank.
12. Physical environment and atmosphere compare to other banks is not meeting the
standard.
13. Less number of Online Branches.
14. Ineffectively use of technologies i.e. Information technology.
15. Shortage of staff- per employee customer is very high side.
16. Technical education and training of staff is insufficient.
17. Lack of marketing effort.
18. Inefficient counter services in the rush hours.
19. Lack of modern equipment.
20. Lack of coordination among employee.
Opportunities (o):
1. Being a Government Bank NBP having wide scope in economic market.
2. Trust and reliability creates chances to enhance deposit and profitability.
3. As a result of the different steps taken by the Government regarding the betterment of
the economy, small borrowers are attracted to get the financing and start small
businesses.
4. Bank’s deposit is increasing rapidly so there is a great opportunity to enhance its
investment and financing.
5. Being an agent of State Bank of Pakistan it can play vital role in local economy.
6. Earning commission/exchange on Government transactions.
7. I.T and HR are important factors for development in any organization, NBP continue
struggle to achieve this target.
8. Can gain profitability through improved Electronic banking.
9. Its vast network of domestic and overseas branches can help to expand business.
10. New marketing strategies to invest money in new projects.
11. Investment can increase with the rate deposits increasing
12. Expansion in the rural area of the country
13. International expansion through joint ventures or merger and acquisition.
14. Can enter in Consumer banking.
15. As per repute of NBP they must enter in personal & car financing products.
16. Market penetration available in local as well as in foreign market.

17. HR is developing into central system of all human administration.

18. Because of the need for micro financing in the market, there are lot of opportunities in
this regard.
19.    Advance salary for employees.
20.  Pensions.

Threats (T):
1. SBP penalties due to low internal control and compliance.
2. Government, SBP and Prudential Rules and Regulations.
 3. Schedule banks and Multinational/International bank’s profit rates.
4. Its staff switching over to other private banks due to more facilities.
5. Other bank’s charming atmosphere and relaxation in documentation.
6. SBP rated just “Marginal” in respect of System & Control which is alarming for the Bank
to survive its license.
7. NBP staff code of ethics and practices.
8. High number of complaints regarding staff behaviour.
9. Payments and FBR Collections create heavy workload.
10. Merger of some of financial institutions
11. Political pressure
12. 265% increase in borrowings
13. Operating fixed assets increased 163%
14. New products from private Pakistani and Foreign Banks.
15. Quality of human resources.
16. More customer oriented approach, it may give us hard time if we drive our focus from
govt. to customer.
17. Mostly the brand of competitors too popular in the market.
18. The opponents enjoy a better reputation in the market.
19. The skilled workforce prefer to be employed in other organization.
20. The change in technology too abrupt so the organization is quite gradual.

STRATEGY FORMULATION:
6. External factor evaluation (EFE):
National bank of Pakistan
Key external factors Weight Rating Score
Opportunities
 0.08 4 0.32
1. Being a Government Bank NBP having wide scope in
economic market.
2. Trust and reliability creates chances to enhance deposit 0.04 3 0.12
and profitability
3. As a result of the different steps taken by the Government 0.03 3 0.09
regarding the betterment of the economy, small borrowers
are attracted to get the financing and start small businesses.

4. Bank’s deposit is increasing rapidly so there is a great 0.04 2 0.08

opportunity to enhance its investment and financing.

0.05 3 0.15
5. Being an agent of State Bank of Pakistan it can play vital
role in local economy.

6. Earning commission/exchange on Government 0.04 2 0.06

transactions.
7. I.T and HR are important factors for development in any 0.03 3 0.09
organization, NBP continue struggle to achieve this target

8. can gain profitability through improved Electronic 0.06 2 0.12

banking
9. Its vast network of domestic and overseas branches can 0.05 3 0.15
help to expand business.

10. New marketing strategies to invest money in new 0.05 3 0.12

projects
Threats
1.Its staff switching over to other private banks due to more 0.07 2 0.14
facilities
2. Mostly the brand of competitors too popular in the 0.08 3 0.24
market.

3. The opponents enjoy a better reputation in the market. 0.07 3 0.21

4. Payments and FBR Collections create heavy workload. 0.09 3 0.27

5. SBP penalties due to low internal control and compliance. 2 0.06

0.03

0.05 3 0.15
6. More customer oriented approach, it may give us hard
time if we drive our focus from govt. to customer.
7. NBP products specifications are not changing too rapidly. 0.04 4 0.16
8. Always there are serious internal financial human 0.03 2 0.04
resources or technological threats.
9. The national economic condition affect the organization 0.03 4 0.12
project.
10. Other external threats that may affect the organization 0.04 4 0.04
like: Govt. policies, country economics, inflation, GDP,
GNP, exports, imports.
Total 2.41

7. Internal factor evaluation (IFE):

National bank of Pakistan
Key internal factors Weight Rate Score
STRENGTHS
1. The bank acts as the agent to the state bank of Pakistan 0.10 4 0.40
for handling provincial/federal government receipts and
payments on their behalf.
2. NBP one of the largest financial institutions of Pakistan 0.08 3 0.24
with 8 million of customer base
3. NBP holds 24.6% share of time and demand deposits in 0.04 4 0.16
the country
4. NBP has an extensive domestic branch network of 1254 0.04 3 0.12
branches located all over Pakistan.
5. NBP is working as right arm government of Pakistan 0.06 4 0.24
6. Leading bank in agriculture financing with the market 0.04 3 0.12
share of 15%.
7. In Top 5th banks of Pakistan 0.04 3 0.12
8. The NBP performs additional services for its customers 0.05 4 0.20
as well as the other bank customer in the absence of SBP.
9. Employees are very much loyal to NBP. Employee’s 0.03 3 0.09
turnover is very low in NBP.
10. NBP has the relative competence in having more 0.03 3 0.09
deposits than the other bank.
WEAKNESSES
1.There is no concept of job rotation 0.05 2 0.10
2. Award and promotion policies are not implemented in all 0.04 2 0.08
branches.
3.Inefficient counter services in the rush hours 0.06 1 0.06
4. NBP under political pressure 0.06 1 0.06
5. Poor environment of NBP 0.06 2 0.12
6. In many branches management is not up to date. 0.04 2 0.08
7. In small area’s branches employees have less education. 0.04 1 0.04
8.Favouritism and Nepotism 0.05 1 0.05
 9. public dealing is not effective 0.04 1 0.04
10. Less number of Online Branches. 0.05 1 0.05
Total 1.00 2.46

8. Competitive profile matrix (CPM):

Based on the general management perspective
Key success factors Weightings

Financial Position 0.10

Management 0.10
Local Branches 0.10
Customer Loyalty 0.10
Foreign Branches 0.05
Employee 0.15
E-Commerce and Technology 0.10
Advertisement 0.05
Product And Price Competition 0.15
Market Share 0.10
Total 1

HBL MCB UBL SCB

Rating Score Rating Score Rating Score Rating Score
3 0.30 3 0.30 3 0.30 3 0.30
4 0.40 3 0.30 3 0.30 3 0.30 9.
2 0.20 2 0.20 2 0.20 2 0.20
3 0.30 3 0.30 3 0.30 3 0.30
3 0.15 2 0.10 2 0.10 2 0.10
1 0.15 1 0.15 1 0.15 2 0.30
4 0.40 4 0.40 3 0.30 3 0.30
4 0.20 2 0.20 2 0.10 1 0.10
3 0.45 3 0.45 2 0.30 2 0.30
3 0.30 3 0.30 2 0.20 2 0.20
2.85 2.30 2.25 2.40

Internal – External (IE) Matrix:

THE IFE TOTAL WEIGHTED SCORE
 4.0 3.0 2.46 2.0 1.0

1 2
3.7 3

THE EFE 3.0

TOTAL
4 5 6
WEIGHTED
SCORE
2.0
7 8 9
1.0
OR

I II III

IV V VI

VII VIII IX

The division where NBP is falling is the first division in IE matrix. Which can be described as
grow and build. Intensive (market penetration, market development, and product development)
or integrative (backword integration, forward integration, and horizontal integration) strategies
can be most appropriate for these divisions.

10. The grand strategy matrix:

RAPID MARKET GROWTH
Quadrant 1

 Market development
  Market penetration
 Product development
 Horizontal integration
 Forward integration
 Backward integration
 Related diversification

WEAK COMPETITVE STRONG COMPETITIVE

POSITION POSITION

SLOW MARKET GROWTH

NBP located in quadrant 1 of the grand matrix are in excellent strategic position. For these the
strategies NBP have is concentration on current markets (market penetration and market
development) or product (product development). If the NBP has excessive resources, then
backward, forward, or horizontal integration may be effective strategies.

11. The quantitative strategic planning matrix (QSPM):

Strategic alternatives
National bank of Pakistan Extension in Acquiring
existing small banks
product(Product (Horizontal
development) integration)
Key factors Weight AS TAS AS TAS
OPPORTUNITIES
1. Being a Government Bank NBP 0.10 4 0.40 4 0.40
having wide scope in economic
market.
2. Trust and reliability creates chances to 0.08 3 0.24 3 0.24
enhance deposit and profitability.
3. Earning commission/exchange on 0.10 _ 3 0.30
Government transactions
4. I.T and HR are important factors for 0.10 _ -
development in any organization, NBP
continue struggle to achieve this
target.
5. Can gain profitability through 0.12 4 0.48 -
improved Electronic banking.
THREATS
0.12 _ -
1. Operating fixed assets increased
163%.
2. Government, SBP and Prudential 0.14 _ -
Rules and Regulations.
3. More customer oriented approach, it 0.10 3 0.30 4 0.40
may give us hard time if we drive our
focus from govt. to customer.
4. Its staff switching over to other private 0.09 3 0.27 3 0.27
banks due to more facilities.
5. Political pressure. 0.05 _ - -
TOTAL 1.00
STRENGHTS
1. NBP is working as right arm 0.11 _ _
government of Pakistan.
2. The NBP performs additional services 0.14 _ -
for its customers as well as the other
bank customer in the absence of SBP.
3. NBP has the relative competence in 0.07 3 0.21 3 0.21
having more deposits than the other
bank.
4. A national bank brand image is its 0.10 _ 3 0.30
major strength.
5. Taking growing interest in developing 2 0.16 3 0.24
the country's small and medium
enterprises.

WEAKNESSESS
1. Physical environment and atmosphere 0.09 _ -
 compare to other banks is not meeting
the standard.
2. Less number of Online Branches. 0.13 4 0.52 2 0.39
3. Lack of marketing effort. 0.11 3 0.33 3 0.33
4. Inefficient counter services in the rush 0.12 _ -
hours.
5. Public dealing is not effective. 0.05 2 0.10 -
TOTAL 1.00 3.01 3.08

TWO alternative strategies, 1. Extension in existing product (Product development) and 2.

Acquiring small banks (Horizontal integration) are being consider by NBP. By sum total
attractiveness score 3.01 vs 3.08 that the analysis indicates the business should Acquire small
banks (Horizontal integration).

Strategy implementation:
Strategy implementation including many perspectives like management perspective, annual
objectives, policies, resource, managing conflict and matching structure with strategy.

MANAGEMENT PERSPECTIVE:
After strategy formulation move to strategy implementation NBP is required to shift
responsibility from strategy to divisional and functional managers but implementation problems
can arise because shift in responsibility. NBP need to develop a competitor focus at all
hierarchical level by gathering and widely distributing competitive intelligence and every
employee should be able to bench mark her or his efforts again best in class competitor so that
challenges becomes personal.

ANNUAL OBJECTIVE:
The annual object of National Bank of Pakistan is part of Pakistan’s struggle for economic
independence. National Bank of Pakistan was established on November 9, 1949under the
National Bank of Pakistan Ordinance, 1949 in order to cope with the crises conditions which
were developed after trade deadlock with India and devaluation of Indian Rupee in 1949.
Initially the Bank was established with the objective to extend credit to the agriculture sector.
The normal procedure of establishing a banking company under the Companies Law was set
aside and the Bank was established through the promulgation of an Ordinance, due to the crisis
situation that had developed with regard to financing of jute trade. The Bank commenced its
operations from November 20, 1949 at six important jute centres in the then, East Pakistan and
directed its resources in financing of jute crop. The Bank’s Karachi and Lahore offices were
subsequently opened in December 1949.
MANAGING CONFLICT:
Modern management acknowledges human resources as one ‘of the most important assets of an
organization. But by their very nature, human beings are also the most unpredictable. Where a
number of persons work together, interactions among them, of necessity, will lead to conflicts
and NBP is no exception. Most interpersonal conflicts in NBP can be traced back to the
following major heads.
‘Lack of Communication
Lack of communication is for the biggest reason for conflicts. Not only it is due to the failure to
send a massage but to an interpretation given to the massage by the receiver is different from that
intended.

Diversity in Values
Diversity in values, perceptions, cultural background and life-style is another reason responsible
for inter personal conflicts in NBP. Different values and perceptions about the same issue, event
or personality hinder understanding. When things come to such a pavement, therefore,
interpersonal conflicts are generated.
The dominant trend in all modern industrial societies of the world is merit and expertise, which
helps promote cohesion and reduce conflicts. But the feudalistic mind-set is still very strong in
our set up and there is no tradition of tolerance for differing viewpoints. Hence, interpersonal
conflicts are generated.

Corruption:
Our social acceptance of corruption gives rise to corruption at every level of social and
organizational set up. Corruption involves financial embezzlement, favouritism, nepotism,
cronyism and other number of such practices. All these cause resentments that keep building up
and lead to conflict sooner or later.

SBU ORGANIZATIONAL CHART:

 ORGANIZATIONAL HIERARCHYCHART
Sutructure

PRESIDENT

BOARD OF DIRECTOR

MEMBER EXECUTIVE BOARD

REGIONAL CHIEF

ZONAL CHIEF

BRANCH MANAGER

EVALUATION OF STRATEGY:

A STRATEGY EVALUATION FRAM WORK:

The NBP approached by developing a revised EFE matrix and IFE matrix. A revised IFE matrix should
focus on changes in the organization management, marketing, finance accounting .R&D and management
information system strengths and weaknesses.

A STRATEGY EVALUATION ASSASSMENT MATRIX:

Changes occurred in Changes occurred in Satisfactorily toward Result
internal strategic external strategic achieving its stated
 position position objectives
NO YES NO Take correct action
NO YES YES Take correct action
YES NO YES Take correct action
YES YES YES Take correct action
NO NO YES Take correct action

The external opportunities and threats and internal strength and weaknesses that represent the
bases of current strategies which should be continually be monitored for changes.

CONCLUSION:
The economy of the country is booming and with the investment favourable policies
And their smooth implementation, the role of banks in today’s economy have become an
important one. The banking industry is also reaping the fruits of this economic boom by growing
rapidly over the past few years. There are a number of mergers happening in the economy with
foreign investments coming into the banking sector.NBP have aimed to become the leading bank
of Pakistan by that provides outstanding services to its customers. The bank has seen
phenomenal growth in the past year by opening more branches in the country, increasing the
deposit base, while also increasing the assets and profits of the bank. The services that provides
have a great market penetration not only because of their features but also the profit and mark-up
rates that they charge. Also the products that NBP provides cater to sector of the economy.
The National Bank of Pakistan plays a key role in the strategic national development. The bank
has historically been the financial arm of the government and has enjoyed
The blessings of state support in the form of huge public sector funds and deposits.
National Bank of Pakistan is the second largest bank of Pakistan by all means;
National Bank of Pakistan is widely used as an agent for State Bank of Pakistan and
Is also involved in commercial banking. National bank of Pakistan has a vital role in
Pakistan’s banking history as well as in the economy of Pakistan, so it has a great
Significance. At present the national bank of Pakistan has improving its internal and
External conditions, but due to the largest operations in Pakistan (because this is
Only bank which must cover the backward regions of the country where no any other
Commercial bank want to go) it still faces many problems,