Question 01- Why the Look for a strategic management?

Question 02- How important is strategic management?

Question 03- What is the process of strategic management in

your organization?

Question 04- You are expected to formulate growth strategy

for your organization.

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 Question 01- Why the Look for a strategic management?
The term ‘strategic management’ is used to denote a branch of management that
is concerned with the development of strategic vision, setting out objectives,
formulating and implementing strategies and introducing corrective measures
for the deviations (if any) to reach the organization’s strategic intent. It has two-
fold objectives:

 To gain competitive advantage, with an aim of outperforming the

competitors, to achieve dominance over the market.
 To act as a guide to the organization to help in surviving the changes in
the business environment.

Here, changes refer to changes in the internal environment, i.e. within the
organization, introduced by the managers such as the change in business
policies, procedures etc. and changes in the external environment as in changes
in the government rules that can affect business, competitors move, change in
customer’s tastes and preferences and so forth.

1. Defining the levels of strategic intent of the business:

Establishing vision

Designing mission

Setting objectives

2. Formulation of strategy

Performing environmental and organizational appraisal

Considering strategies

Carrying out strategic analysis

Making strategies

Preparing strategic plan

3. Implementation of strategy

Putting strategies into practice

Developing structures and systems

Managing behavioural and functional implementation

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 4. Strategic Evaluation and Control

Performing evaluation

Exercising control

Recreating strategies

Strategic Management is all about specifying organization’s vision, mission and

objectives, environment scanning, crafting strategies, evaluation and control.

Question 02- How important is strategic management?

• Strategy management can help organizations that struggle to achieve their
projected strategic outcomes by focusing on the details of planning

• Provides solid guidance for creating clear, simple and understandable

plans that are well structured and achievable

• Capture critical information and establishing consistent ways to represent,

analyze and review the quality of a given plan

• Provides standardized approaches to evaluating potential strategic

initiatives, providing consistent information to leadership for prioritization and
selection of strategic initiatives

• Manages the transition between design and implementation using the

information captured during the design phase.

• Provides implementation management oversight, tracking progress,

monitoring health, and addressing emerging risks

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• Provides dynamic off-cycle review of ad-hoc events and requests,
leveraging the same standardized prioritization assessment and applying change
management rigors to the process

• Monitors key performance indicators, leading indicators predicting risk,

lagging indicators tracking performance outcome, and external triggers that
indicate potential market changes

• Provides consistent stakeholder engagement and review processes, fully

supported by detailed informatics and analytics that provide status, alerting, and
recommendations

Strategy management provides the rigor required to manage across the entire
plan, with automated services that reduce the added burden of rigorous
management processes. Organizations can use their planning approach and
their own processes, even add their own business rules. Strategy management
leverages:

• detailed information collection

• standardized processes

• management tools to support each phase of the process, including the

transitions between phases

• analytics that process plan, prioritization and implementation data and

provide quality, health, and status assessment

• reporting and review tools that generate easy to understand and interpret
reports

• adaptable solutions that evolve with the organization.

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Question 03- What is the process of strategic management
in your organization?

In any organization there are six steps of strategic management process:

 Defining the mission and vision

 SWOT Analysis in internal and external environment.
 Establishing objectives
 Strategic Fomulation
 Strategic Implementation
 Strategic Evaluation

My Organization: HABIB BANK LIMITED

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Introduction

 HBL was the primary banking company established in West Pakistan

in 1947.
 Over the years, HBL maintained its position because the largest non-
public sector bank with over 1750 branches and 2000 ATMs globally.
 The Government of Pakistan privatized HBL in 2004.
 AKFED acquired 51% of the bank shareholding and internal control.
 The remaining 41.5% property by the govt of Pakistan was divested in
April 2015.

History

 Originally established in 1941.

 HBL enraptured its operations to Islamic Republic of Pakistan in 1947
at the request of Muhammad Ali Jinnah.
 The bank initial international branch opened in Colombo, Sri Lanka in
1951.
 Habib Bank Plaza was completed in 1972, the year that additionally
marked the commemoration of HBL twenty fifth anniversary.
 International operations of HBL currently operates in over twenty
countries across four continents.

Vision Statement

“Enabling people to advance with confidence and success.”

Mission Statement

“To make our investor(s) prosper, our staff excel and to create value for our
stake holders.”

Values of HBL

HBL’s values are primarily based upon the 5 basic principles that outline our
culture and are brought to life in our perspective and behavior.

 Excellence.
 Integrity.
 Customer Focus.
 Meritocracy.
 Progressiveness.

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HBL STRATEGIES

HBL PSL
To take a further step for marketing, HBL purchased the legal license of
Pakistan’s 1st cricket league named PSL, HBL takes credit for the sponsorship
of Pakistan Super League, which later was renamed to HBL PSL which enabled
the HBL to gain a lot of fame globally.

Discounts/Global Alliances
HBL has alliances with different brands of different areas of life, be it lifestyle,
dine in, accessories, traveling or anything HBL’s debit card and credit card
offers different discounts on those listed brands those are revised semiannually.

Products and Services

HBL provides a large range of products and services to its business and
individual customers some of which are as follows.

PRODUCTS
 HBL Muhafiz Rupee Traveler’s Cheques
 HBL Auto Finance
 HBL Flexi Loans for salaried personnel
 HBL Lifestyles Financing Scheme
 HBL i-Card
 HBL House Financing Loans
 HBL Easy Access
 HBL Fast Transfer
 Haryali Agricultural Loans
 HBL E-Bank
SERVICES
 Retail banking
 Commercial banking
 Corporate banking
 Phone banking
 Islamic banking
 Cash management
 Asset management
 Agriculture loans
 Commercial banking
 Corporate banking
 Islamic banking
 Investment banking

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 Working capital
 Procurement of inventory
 Procurement of machinery
 Expansion of production facilities
 Import of raw materials
 Exports
 Guarantees
 Project finance
 Debt capital markets & syndications
 Equity capital markets & advisory.

Management Functions

Management involves coordinating and overseeing the work activities of

others, so their activities are completed efficiently and effectively. The
management process involves four functions to describe manager’s work:

 Planning.
 Organizing.
 Leading.
 Controlling.
 Planning

“Setting goals, establishing strategies and developing plans to coordinate

activities is known as Planning’’

Objectives of HBL

 Planning is the first and main managerial role of a bank to perform.

 The long-term objective of Habib Bank Ltd is to become top priority
to the customers in banking sector and finance. To achieve their long-
term objective, they are giving as much facilities to their employees
and customers as they can.
 The short-term objective of HBL is to cope well with the challenges of
banking market and perform well not only in local market but also
international market.

Planning in Departments

 There are approximately 8-10 departments in every HBL branch and

each branch works on different plans and strategies.

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  Decision making is highly centralized because all the decisions and
plans are made at the top level of management.
 For internal working there is case to case planning by manager with
the coordination with employees.
 Branch also make extra plan for contingency conditions.
 Strategies are made to attract customers.

Organizing

“Organizing is arranging and structuring work to accomplish the

organization’s goals’’

Organizing in HBL

 Managers are responsible for arranging and structuring work that

employees do to accomplish the organization’s goals.
 In HBL there is a chain of reporting.
 Division of labor.
 Operational workers for public dealing.
 HRM (Human Resource Manager) department for management.
 Work is allotted as per skills.
 No autonomy is provided to HBL staff.
 There is additionally a high degree of interaction among department
managers.

Leading

“Management function that involves working with and through people to

accomplish the organization’s goals’’

Leading in HBL

 In HBL the leaders handle unmotivated employees with strictness.

 HBL have team leadership styles.
 Leader gives guideline to workers the way to work with efficiency.
 Staff is intended by cash Rewards and Promotion.
 Staff is updated with new policies through:

i. Line of work conferences.

ii. Signing circular.

iii. Telling orally.

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 Controlling

“Management function that involves monitoring, comparing and correcting

the work performance is known as Controlling’’

Controlling in HBL

 In Habib Bank Ltd. the activities of workers ought to be controlled

with the standards of the work appointed to them.
 In Habib Bank the customers are main priority to be controlled.
 Turnover of the staff must be controlled. To regulate the turnover
HBL is giving additional facilities to the staff in form of Job security,
incentives, bonuses, etc.
 Task is split in quarters.
 Evaluation of completion of Task on monthly bases.
 Conflicts are settled through coordination and communication.

SWOT Analysis

Strengths:

 The staff of the bank is skilled, well trained and competent.

 HBL is having Centralized decision making.
 Pioneer of ATM
 Highest Bank reserves
 HBL has the fastest mode of home remittance of 3 days.
 Every 10th Pakistani is the account holder of HBL.
 Brand Name
 Strategic Alliance
 Largest private bank
 Largest Network
 Largest Foreign branches network
Weaknesses:

 Marketing department of HBL is not so effective.

 Poor system of recovery.
 HBL has become victim of political, legal and socio cultural pressure.
 Unsatisfied Staff
 Lacks in Customer service
 Non Compliance with SBP
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  Untrained staff
 Slow processes
 No new innovation
 Non popularity of travelers cheques, deposits of having a large network
of branches.
Opportunities:

 Government reforms to uplift economy

 Fast cash transfer as compare other local markets
 Diversification towards Islamic Banking Services
 Providing premium and priority banking services
 Agriculture finance and Micro Finance Facility to farmers and
households
 SME financing
 Personal Loans and Consumer Banking
 Expansion in Rural areas
 International Expansion Plans
THREATS

 Political interference in Banking Activities

 Economic Downfall
 High discount rates by SBP
 Law and order situation affecting economic activities
 High Inflation rate due to deficit financing by Government
 Power shortage affecting industries overall performance
 High interest rates and strict monetary policy
Main Problems

 There is noticeable communication gap between higher level

management and operational employees.
 There is additionally over staffing.
 There is large distinction in approaches of old employees & young
employees.
 Experienced employees are demotivated and dissatisfied because of
following 2 reasons:
1) Salaries haven't been revised from last ten years.
2) Experienced Habibians are neither glad by the privatization of bank
nor they were taken into confidence at that times.

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 Recommendations

 Employees coaching programs should be introduce on continuous

basis.
 Mismanagement of resources should be avoided.
 Bank should facilitate the society by providing interest free loans to
the talented students.
 Banks totally different schemes must be conveyed to the targeted
customers.
 Fresh graduates should be recruited.
 Improves friendly relations are required between the top and middle
management.

Conclusion

“HBL is clearly the primary selection of everybody who believes in

qualitative approach of banking an environment of extremely responsible
folks. Bank is enjoying a healthy market share and taste of excellent standing
in terms of its operative features support. HBL is clearly the most effective
bank operating in Pakistan. Corporate and business functions are
distinguished options of HBL experiencing an honest name and cheap price
with reference to prevailing market price with assurance of satisfaction and
support. HBL has additional customers as compare to other banks, if they
give correct attention to each client then in few years it’ll be the leading bank
of the Pakistan.

Question 04- You are expected to formulate growth

strategy for your organization.
Six Ways A Bank Can Grow Earnings

 Add Customers:

This is usually what banks think about when they imagine growth. Selling your
existing bank products to more customers is usually a sure fire way to grow.
Unfortunately, it is the riskiest as likely you are adding volume to your existing
platform. If done correctly, banks can create the most franchise value in this
manner. The trick is to make sure your risk/reward ratio is in your favor.

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  New Products:

One of the most underutilized tactics is to add new products to your existing
customer base. Finding new customer problems and finding ways to solve them
can add equal franchise value as adding customers. Like adding customers,
banks need to make sure that the risk-adjusted return is above their cost of
capital.

 New Business Models:

This tactic is almost always overlooked, but it involves in selling the same
products but in a different manner to create value. Charging an annual fee in the
form of a subscription instead of a monthly charge for a valuable set of banking
services is an example. Delivering credit through partnerships is another. This
usually involves keeping risk relatively constant but create a new delivery
channel or method to pay for banking services.

 Cross-Sell:

Selling more products to your existing customers is often the easiest way to
grow both assets and prices. Since you don’t have to acquire the customer, this
is one of your lowest risk options. Banks can market their existing customers to
grow loans, deposits, and fees.

 Up-Sell:

Similar to cross-selling, banks can take existing customers in existing products

and move them to a more expensive product with a wider margin. This is often
a lower risk option, as you are keeping the products and volume the same but
adding a layer of service to improve margins. Refinancing your existing loans
into long-term fixed rates earning a hedging fee in the process is a great
example how you can up-sell a product, reduce credit risk by stabilizing the
borrower’s payments while receiving a floating rate plus a fee.

 Make Your Platform More Efficient:

Cut processing costs, increase productivity, and enhancing risk-adjusted

margins are all the fastest way to grow profits. The best part about this growth
tactic is that it usually decreases operational risk and so banks can get an added
risk-adjusted return boost.

 Putting This Into Action

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How you grow your bank should be intentional and not based on what happened
last year. To get the most out of growth, banks need to define what growth they
want, how much-increased risk they are willing to take and how to allocate
resources to accomplish that required growth.

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