An Assignment

On
Approaches of Strategic management in Dhaka bank

Submitted to:
Md. Kamrujjaman
Assistant Professor in MGT
Department of Business Administration
Manarat International University
Gulshan-2, Dhaka-1212
jeweldu57@yahoo.com

PREPARED BY:

SL NAME ID Remark
NO
1 Jannatun Nisa Tazree 1439BBA03011
2 Zannatul mawoa Rafi 1439BBA02929
3 Nur Jannatul Bindu 1439BBA02957

MANARAT INTERNATIONAL UNIVERSITY

Submission of Date: 06-08-2017

 DHAKA BANK LI M I T E D

Introduction
In the recent years banking industry is flourishing more rapidly than any other industry. So the
numbers of banks are increasing in this industry. As a result the competition is also increasing
so the companies are being so much dependent on strategic management to survive in the
competition.  In the assignment we will see the strategic management process of Dhaka Bank.

Company profile

Dhaka Bank Limited

DHAKA BANK LIMITED was incorporated as a public limited Company on 6 th April 1995
under the company act. 1994 and started it’s commercial operation on June 05, 1995 as a
private sector bank. The bank started its journey with an authorized capital of Tk. 1,000.00
million and paid up capital of Tk. 100.00 million.
The strength of a bank depends on its management team. The Employer in Dhaka Bank is
proud to have a team of highly motivated, well-educated and experienced executives who have
been contributing substantially in the continued progress of the bank.

The marketing activities at the Dhaka Bank are very implicit and vast comparing to that of
other bank in the country today.

The Philosophy of the bank is “EXCELENCE IN BANKING”. Dhaka Bank is always willing
to offer new product features to the client. Besides the applications of these products or
services are prepared in a very modern way so that the service can be provided in least time
required.

The Credit facilities approved by Dhaka Bank are increasing day by day because of its well-
organized and trained management and also well-equipped facilities. In recent time banking
sector becomes very competitive and without giving good and attractive facilities and service
no bank can survive in this time. Dhaka Bank is also trying to provide good service to keep
going with this competition.

Dhaka Bank has truly cherished and brought into focus the heritage and history of Dhaka and
Bangladesh from Mughal outpost to modern metropolis. Most of its presentation, publications,
brand initiatives, delivery channels, calendars and financial manifestations bear Bank’s
commitment to this attachment. The Bank is widely recognized today for its exceptional service,
simplicity, proximity and cutting-edge way of delivery& operational craftsmanship marking its
position as the potential market player in all core areas of banking in the country. It got listed in
DSE and CSE in 2000. Alongside a lasting bond with the corporate world, Dhaka Bank has got
hold of a countrywide reach through a larger network of Branches, ATMs, ADMs, SME
channels and SMS banking. As on December 2016, Dhaka Bank has made its vibrant presence at
96 Branches including 2 Islamic Banking Branches, 3 SME Service Centers, 56 ATMs, 20
ADMs, 1 Business Kiosk and 2 Offshore Banking Units across the country. Catering to the needs
of Capital Market, the Bank has established a subsidiary company named Dhaka Bank Securities
Limited having 6 countrywide Branches.

They expect to rise from the heart of Bangladesh as a stronger force in the market we serve. We
are committed to our goals to create superior shareholder value in our quest for excellence as we
grow and mature into a banking veteran.

Vision
Dhaka Bank draws their inspiration from the distant stars. Their vision is to assure a standard
that makes every banking transaction a pleasurable experience. Their endeavor is to offer one’s
supreme service through accuracy, reliability, timely delivery, cutting edge technology and
tailored solution for business needs, global reach in trade and commerce and high yield on one’s
investments. Their prime objective is to deliver a quality that demonstrates a true reflection of
their vision-Excellence in Banking.

Mission
“To be the premier financial institution in the country providing high quality products and
services backed by latest technology and a team of highly motivated personnel to deliver
Excellence in Banking.

Core value
•Customer Focus
•Integrity
•Quality
•Teamwork 
•Respect for the Individual
•Responsible Citizenship

Objective of DBL as a shariah based Islamic Bank

•To ensure appropriate procedure for investment of fund under Shariah Principles to safeguard
the interest/benefit of the depositors.
•To establish Riba/Interest free Islamic Financial system for ensuring justice and avoid
uncertainty in Financial Sector.
•To avoid risk & uncertainty in the society and to make easy the livelihood of citizen improving
financial strength of distressed people with more confidence standing on Islamic Financial
System.
•To free the society from the burden of interest and financial ailing.
•To help the distressed people to improve their financial standings with more
confidence on profit sharing.
•To provide interest free financial services to the mass people ensuring justice in the society.
•To meet the emerging demands of customers preferring Islamic mode of operations in business.
•To create various products derivatives considering modern economy’s demands

Customer charter
DBL seek to build long-term, sustainable beneficial relationship with all the customers based on
the service-commitments and on their underlying values of mutual respect, the pursuit
of excellence and integrity in all their dealings.

• Primary concern is to understand and satisfy customer’s needs and expectations.

Promise to use all means open to establish and understand these needs which are both mutually
beneficial and respect the values and principles in all aspects.

• Promise to deal quickly, courteously and accurately with all correspondence.

• Should disagreement arise between customer and bank they undertake to seek as speedy and
equitable solution, which takes account of the rights and obligations, both parties and is framed
in the context of a long term and enduring relationship.

• Believe in openness, integrity, transparency and accountability and provide highs standard of
services to the valued customers .Create customer value, loyalty and equity, which create
customer delight over a lifetime of patronage.

Technologies, Products and Services

The business policy of Dhaka Bank is to reach the global through a win-win
situation with the client .Dhaka bank believes in promoting the business through personalized
services and perpetual relationship. It has strong commitment to stay competitive and serve the
clients of different strata in the society as well as to accelerate the pace of economic operation.

Dhaka Bank’s products and services are regularly upgraded and realigned to fulfil customer
expectation. Their delivery standards are constantly monitored and improved to assure the
highest satisfaction. The bank specially emphasizes on the service base on technologies.
Because the life became very fast and people want take service within sort time. The
consumer-banking sector of the Bank deals with number of tasks related to various services.
The products that are recently being offered by the bank are as follows –

 Accounts: Dhaka Bank provides the Savings Account; Current Account; Short Term
Deposit; Fixed Deposit Receipt etc. for the customers.
 ATM (Automated Teller Machine): Dhaka Bank ATM Cards enable their valued
customers to carry out a variety of banking transactions 24 hours a day.
 Credit Cards: Dhaka Bank Credit Card has earned wide acceptability and reputation within
a very short time. The Bank has developed the process such that it can deliver the Credit
Card within only 7 days against security; for unsecured cards it takes only 10 days.
 Phone banking: Dhaka Bank phone banking service allows customers to conduct a variety
of transactions by simply making a phone from anywhere. Customers can inquire about the
balance in their account, check transaction details or request for account statement by fax or
e-mail.
 Locker: By this facility customers can put their valuable things such as jewelry items,
valuable papers etc. for the safety reason.
 Consumer Credit: Dhaka Bank also provides consumer credit facilities with very attractive
terms and conditions.
 Industrial Loan: Loans issued for purchasing equipment, inventories, plants, payrolls etc. 
 Any Branch Banking: By this customers can transact from any branch insight the country.
 Utility Bill Payment: Customers can pay different utility bill such as phone bill, credit card
bill etc.

Customer charter
DBL seek to build long-term, sustainable beneficial relationship with all the customers based on
the service-commitments and on their underlying values of mutual respect, the pursuit
of excellence and integrity in all their dealings.
Primary concern is to understand and satisfy customer’s needs and expectations.
Promise to use all means open to establish and understand these needs which are both mutually
beneficial and respect the values and principles in all aspects.

Promise to deal quickly, courteously and accurately with all correspondence.

Should disagreement arise between customer and bank they undertake to seek as
speedy and equitable solution, which takes account of the rights and obligations, both
parties and is framed in the context of a long term and enduring relationship.

Believe in openness, integrity, transparency and accountability and provide highs

standard of services to the valued customers .Create customer value, loyalty and
equity, which create customer delight over a lifetime of patronage.

Types of Bank Loans

The banks make a wide variety of loans to a wide variety of customers for many different
purposes-from purchasing automobiles and buying new furniture, taking dream vacations and
pursuing college education to constructing homes and office buildings. Bank loans may be
divided into the following broad categories of loans, delineated by their purpose:
1.       Real Estate Loans, which are secured by real property-land, buildings, and other
structures- and include short-term loans for construction and land development and longer-term
loans to finance the purchase of farmland, residential, and commercial structures etc.
2.       Financial institution Loans, including credit to banks, insurance companies, finance
companies, and other financial institutions.
 3.       Agricultural Loans, extended to farm and ranch operations to assist in planting and
harvesting crops and to support the feeding and care of livestock.
 4.       Commercial and Industrial Loans, granted to business to cover such expenses as
purchasing inventories, plant, and equipment, paying taxes, and meeting payrolls and other
operating expenses.
5.       Loans to Individuals, including credit to finance the purchase of automobiles, homes,
appliances and other retail goods to repair and modernize homes, cover the cost of medical care
and other personal expenses, either extended directly to individuals or indirectly through retail
dealers.
6.       Lease Financing Receivables, where the bank buys equipment or vehicles and leases
them to its customers. Among the categories, the largest volume is in the real estate loans. The
next largest category is commercial and industrial loans.
7.       Asset-based Loans, loans secured by a business firm’s assets, particularly accounts
receivable and inventory.
 8. Installment Loans, credits that is repayable in two or more consecutive payments, usually
on a monthly or quarterly basis.
9.       Letter of credits, a legal notice in which a bank or other institution guarantees the credit
of one of its customers who is borrowing from another institution.
10.   Retail Credit, smaller-denomination loans extended to individuals and families as well as
to small business.
11.   Term loans, credit extended for longer than one year and designed to fund longer-term
business investments, such as the purchase of equipment or the construction of new physical
facility. Term Loans are designed to fund long-and medium-term business investments, such as
the purchase of equipment or the construction of physical facilities, covering a period longer
than one year. Usually the borrowing firm applies for a lump-sum loan based on the budgeted
cost of its proposed project and then pledges to repay the loan in a series of installment.
12.   Working Capital loan, provide businesses with short-run credit, lasting from a few days
to about one year. Working Capital Loans are most often used to fund the purchase of
inventories in order to put goods on shelves or to purchase raw materials; thus, they come
closest to the traditional self-liquidating loan described above. Frequently the Working Capital
Loan is designed to cover seasonal peaks in the business customer’s production levels and
credit needs.     
          

Company Activities and Performances

Paid up Capital
The paid up capital of Dhaka Bank Limited amounted to Tk. 1,547 million as on December 31,
2008 which was Tk. 100 million when the Bank started its operation. The total equity (capital
and reserves) of the Bank as on December 31, 2008 stood at Tk. 3125 million.
Deposits
A strong deposit base is critical for success of a bank. During the years the Bank has mobilized
a substantial amount in deposits in transactional and savings account. The deposit base of the
bank continued to register a steady growth and stood at Tk. 48,731 million excluding call as of
31 December 2008 compared to Tk. 41,554 million of the previous year registered a 17%
growth.
Investment
Dhaka Bank has diversified its investment portfolio through Lease Financing, Hire Purchase,
and Capital Market Operations besides the investment in treasury bills and Prize Bonds. The
emphasis on high quality investment has ensured the bank to maximize its profit.
Dhaka Bank Limited is a member of the Dhaka Stock Exchange and Chittagong Stock
Exchange. A specialized unit of the Bank, the Investment Division manages the Bank’s
portfolio and actively participates in the screen-based on-line trading of both the Stock
Exchanges.
Profit
Dhaka Bank Limited registered an operating profit of Tk. 2,010 million in 2008 compared to
Tk. 1,183 million in 2007 making a growth of 70%. After all provisions including general
provisions on unclassified loans, profit before tax stood at Tk. 1,531 million. Provision for tax
for the year 2008 amounted to Tk. 827 million. The net profit of the bank as on 31 December
2008 stood at Tk. 704 million compared to previous year’s Tk. 580 million making growth of
21%. Earning per share (EPS) was Tk. 46.06 in 2007 compared to Tk. 45.17 in 2007.
Loans and Advances
The Bank implemented the system of credit risk assessment and lending procedures by stricter
separation of responsibilities between risk assessment, lending decisions and monitoring
functions to improve the quality and soundness of loan portfolio. The Bank recorded a 17 %
growth in advances with a local loans and advances portfolio of Tk. 39,972 million at the end
of December 2008 compared to Tk. 34049 million at the end of December 2007.

Customer types
An eligible customer for DBL SMEF could be of any of the following except a Public Limited
Company:

 Proprietorship Firm having valid trade license issued by any City Corporation/Municipal
Corporation/Regional Office of City or Municipal Corporation/Upozilla Parishad/Union
Parishad.

 Partnership firms formed under the Partnership Act- 1932 and registered with the Registrar of
Firms or notarized with the Notary Public.

 Private Limited Companies formed under the Companies Act- 1913/1994 and registered with
the RJSC

SME Financing
Inclusive finance has become a strong force for a change towards sustainable development.
Blending business with more rural and SME finance is another way of achieving sustainability.
Since inception, the Dhaka Bank has held socio-economic development in high esteem and was
among the first to recognize the potentials of SMEs.
Recognizing the SME segment’s value additions and employment generation capabilities quite
early, the Bank has pioneered SME financing in Bangladesh in 2003, focusing on stimulating the
manufacturing sector and actively promoting trading and service businesses. To support Small &
Medium Enterprises, Dhaka Bank has widened its network up to the rural frontiers with a
country-wide reach of Branches, SME & business centers, alternative delivery channels (ADC)
and so on. With as many as 17 products, they have blended together small  businesses, medium
enterprise, women entrepreneurs, cottage industry, agricultural farmers, renewal energy and eco-
friendly brick kilns among more than 5,000 entrepreneurs.
Although the effort started with the help of some donor agencies in 2001, Dhaka Bank Limited
has been actively involved in financing SMEs since early 2003. The SME Credit Program for
Dhaka Bank Limited has been designed in the light of the terms & conditions by USAID, as it
was the first advising agent for SME Credit Program.

Corporate Social Responsibility

DHAKA Bank always keeps itself associated with the various activities toward the benefit of the
society as well as the nation. In order to facilitate & smooth execution of its activities, it has
already established a foundation named “
DHAKA Bank Foundation”. The bank allocates sat least 2% of annual profit for the DHAKA
Bank foundation to conduct CSR each year. The mainstream CSR activities that are carried out
through this foundation are:

Scholarship program for brilliant poor student

DHAKA Bank started their CSR activities DHAKA Bank Scholarship Programmed
with the theme of-“Promotion of education among all” in the year 2006. The bank has taken
around 1200 meritorious students from all corners of the country to take care their educational
expenses until their completion of educational life. So far Tk. 72.9 Million (BDT 729,00,000)
has been disbursed as scholarship under this programmed including Tk. 20.6 Million(BDT 206,
00,000) in 2011.

 Education Promotion Scheme

Under Education Promotion Scheme, interest free loan is provided for poor but meritorious
student to help them bear monthly educational expenses including food, accommodation etc .The
students are required to repay the principal amount in long-term monthly installments after they
have joined a confirmed job after accomplishing their education properly. By 31stDecember
2011, Tk. 25.7 Million (BDT 257,00,000) was sanction to take care of around 200poor but
meritorious student from reputed educational institutions in our country.

 Helping people affected by natural calamities

Another vital area we are dealing with as part of our CSR activities is helping people survive
natural calamities. Under this welfare program ,DHAKA Bank provides relief in
cash and kind for flood, fire or cyclone victims and cold-stricken people. The aim of these CSR
activities is to help the target group overcome their provisional handicap and contribute to the
socio-economic growth as soon as possible. Not on the above, but also the bank was donate to
Prime
Minister’s Relief Fund for bereaved family members of the Army Officers during
the carnage in 2009 at BDR Head Quarter (Pilkhana , Dhaka).

Helping people in slum areas

Besides natural calamities, fire breaks out sometimes in slum areas that guts the shanties and
renders the affected people very helpless. In that situation, we help the victims fight against the
hard days and return to normal life.
 Beautification of Dhaka City
In response to the call of the Dhaka City Corporation ,DHAKA Bank has been
sharing a good portion of the mammoth task of beautifying the capital since 2005. To make
the capital a modern city enriched with adequate urban amenities, DHAKA Bank always joins
hands with the government.

Strategic Management process in Dhaka Bank

Company’s strategy is an important and secret subject. All the time the company doesn’t want
to disclose the information. So it is very difficult to know about the strategy of the company.

But when we finding the information about our subject we see that there is not any fixed
strategy, the market condition and the competition rapidly change so the strategies are also
changes, though there does not happen any massive change in the corporate level strategy.

The corporate strategy there had used formal strategic management process.

Such as defining the organization’s guiding philosophy, purpose, mission, establishing long
range objectives to achieve the mission, selecting the strategy to achieve the long range
objectives, development of organizational structure, selecting leadership and providing
motivational system, establishing short range objectives, developing budgets and developing
functional strategy  and establishing standards to evaluating the performance, monitoring
progress in the execution, initiating corrective actions etc.

When we visit more their websites for want to know about the strategy process model we find
that any strategy is not formulated based on model but when any strategy is goon to formulate
the model is automatically followed.

When their corporate level members are going to formulate any strategy for business unit and
function unit—

FIRSTLY, They identify the reason which indicates the guiding philosophy, purpose and the
mission. Then they analysis all the factors relevance to the strategy which may be inside of the
organization and outside of the organization.

SECONDLY, After find out the best way to do the job and then they set factors to implement
or to get done the job.

THIRDLY, In case of formulating business unit and functional unit strategy the company gives
priorities on competitors.

This over all process actually indicates the model. Out of corporate level they use two models:
 1. Product-Market (Ansoff) Matrix if Dhaka Bank
2. Customized Porter’s Five Forces Dhaka Bank

Product-Market (Ansoff) Matrix

Product

Market Present New

Present Market Penetration: Product Development:

Corporate Banking SME and Agriculture

New Market Development: Diversification:

Bonds and Derivatives
Retail Banking

Table 1: Product-Market (Ansoff Matrix) (Source: Adopted from “Strategies for Diversification” by Igor
Ansoff)

The Ansoff growth matrix depicts the alternative growth strategies that a firm can exercise by
leveraging its present and potential products and markets.

Market penetration Market penetration involves increasing market share in present markets
using existing products. This is the least risky since the firm's existing resources and capabilities
are generally sufficient.

Market development Market development The bank will try to grow by selling existing
services in new markets. Despite the proliferation of retail banking products, consumers’
awareness is very low. Therefore consumer awareness has to be cultivated to develop the market.

Product development The development of new markets for the product may be a good strategy
if the firm's core competencies are product-specific rather than in a specific market segment.
However, the firm's strengths may be its ability to operate in a particular market segment rather
than a specific product. In this situation, it can engage in product development which is the
launch of new products targeted to existing customers.

Diversification A diversification growth strategy is adopted by firms launching new products in

new markets and willing to undertake the high risk involved. A bond market is in the
development stages and bond trading and underwriting have the potential to be a lucrative source
of revenue.
Customized Porter’s Five Forces Dhaka Bank

The Porter’s five forces model can be customized to explain the reality in the banking industry in
Bangladesh. The five forces shaping and reshaping the industry are namely: central bank,
Depositors, borrowers, substitute capital market sources and potential entrants as shown in the
diagram below. The depositors and the borrowers are two main components of the model.
Their importance lies in the fact that they provide the necessary dynamics in the banking flow.
The deposits kept by small and medium savers are used to disburse off loans to borrowers which
include business, government or consumers. The depositors have minimal power because they
are not unified, therefore cannot dictate interest rates for their deposits. Borrowers have gained
some power over the years, mainly due to increased competition in the industry as a whole.
Borrowers taking out larger loans have more power than smaller ones because they enjoy the
benefit of bulk

Substitute: Capital
market, NBFI, PCB Potential Entrants

Borrowers Industry competitors:

Rivalry among existing Depositors
firms

Central Bank

The competition level among the foreign and local banks is very intensive. Banks such as
Standard Chartered Bank, Eastern Bank Ltd, Standard Bank and Premier Bank are coming up
with new banking products and services to compete and even make better products and services
than one another. Therefore, there is intense competition in the banking industry. By analyzing
the rivalry among existing banks we can say that the threat of new entrants is considerable
and there is intense competition and rivalry. It would be very difficult to survive in a market
where almost every bank – foreign and local, is waiting to grab market share away with the
slightest of chances. Therefore, DBL must strive to be more innovative and competitive in order
to protect its customer base, and expand it.

There are several substitutes of the banking industry for both depositors and borrowers which
include capital market, non-bank financial institutions (NBFI), and public commercial banks.
Higher return on these options will encourage depositors to move.
Borrowers can also shift to these options if these turn out to be viable in terms of cost.
The central bank plays a passive role in the operation of banking industry although they have
the capacity to exert significant influence on all the stakeholders. They have great influence
in deciding whether new banks will be given license to operate in the market.
New entrants may pose as a big threat for incumbents but for the last seven years Bangladesh
bank hasn’t issued a single license.

The relative powers of the five stakeholders define the way the banking industry will behave.
The balance of power among stakeholders is of paramount importance to ensure effective
functioning of the banking industry.

Recommendation

The first step for a bank embarking on the strategic management process is stating the
mission and vision. To achieve the vision, the bank must analyze the environment and take
stock of available resources and determine future resource requirements and constraints. This
would lead the bank to recognize its core competencies. The core competencies of the bank
would have to be aligned with the bank’s mission and vision statements as well as resource
requirements, availabilities and constraints.
Then, the bank would define the strategically important activities based on its core
competencies and then focus on successfully performing these activities. In the process, the
firm will be able to identify the critical success factors that are essential to thriving in the
industry and achieving its business objective.
Then the bank would undertake a strategic planning process. This involves anticipating
different possible scenarios and the possible outcomes in each case. This would provide the
bank with a framework to plan around. Then the bank would formulate the overall strategic
direction for itself: prospector, analyzer, defender and reactor. The role that the bank would
choose for itself would depend on the following: the bank’s mission and vision, core
competencies and resource constraints.
At this stage the bank is ready to accumulate resources. It will then allocate these resources
as needed based on its role decision and strategically important activities that it had identified
in step 4.
 At this stage, the bank is ready to develop its competitive advantage. These should be derived
from the bank’s core competency, since there is a high possibility that the bank will perform
these tasks or activities better than its competitors. However, a core competency does not
automatically translate into a competitive advantage, since anything a bank does better than
its rivals (and possibly even the market) can become a competitive advantage for itself. For
example, a bank might have corporate banking as its core competency, but it might also cite
customer satisfaction as its competitive advantage.
Once the bank has built competitive advantage over its rivals, it can differentiate itself and
deliver superior value to its customers. This would ideally lead to customer satisfaction,
retention and consequently, profitability.
The last step would be the continuous and regular monitoring, evaluation and revision of the
bank’s strategic management processes and decisions to reflect sudden or anticipated
changes in the environment and other factors.

Conclusions

The over all attempts in the assignment were to find out and to give a clear idea about the
practical practice of strategic management in a company. In the assignment we tried out best to
do so. For doing this job we have given details of the company and speech of the management
about the strategic management. And presented a competitive scenery of the company.
 By analysis the data we find that strategic management is not usually practiced formally in the
organization but it is true elements or steps of strategic management are followed automatically
and unconsciously in the company. We also find that only in the corporate level the strategic
management process remain fixed. It is not usually changed but in the business and functional
level strategy changed frequently. And it is so complex and important job for the company to
survive in the competition