COURSE:

STRATEGIC MANAGEMENT

Submitted to:

Sir Salah-ud-din

(IoBM)

Prepared by:

Fatima Furqan (20059)

Hina Waseem Javed (21057)

Syed Ahsan Ali (21287)

Muhammad Umair Saleem (21096)

Salman Saleem (20316)

Leader: Moaz Mustaqeem (21012)

Date: April 11, 2018

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ACKNOWLEDGEMENT
As a matter of first importance, we offer our thanks to Allah the all-powerful, who helped us with His
quality, gave us intelligence and persistence to finish this research project.

We might want to express our most profound gratefulness to each one of the individuals who gave us
the likelihood to finish this report.

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Our Special appreciation goes out to our teacher, Salah-ud-din, whose commitment in empowering
recommendations and support, pushed us to organize our undertaking particularly in composing this
report. Additionally, it's implied that without the ideas given to us over the span of the undertaking are
the motivation behind why we could finish this report.

To wrap things up, an abundance of thanks go to our dearest guardians for their help and consolation.
And furthermore, to our schoolmates who helped us additionally fortify our ideas from numerous
points of view and keep our focused soul alive.

TABLE OF CONTENT
TITLES PAGE NO#
ACKNOWLWDGMENT 3

EXECUTIVE SUMMARY 5

INTRODUCTION 6

INDUSTRY BACKGROUND 8

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HISTORY OF BANKING IN PAKISTAN 9

PERFORMANCE OF BANKS IN PAKISTAN 11

PERFORMANCE IN 2017 13

PORTERS FIVE FORCES 13

ABOUT MEEZAN BANK 16

MEEZAN VISION 17

MEEZAN MISSION 17

VALUES OF MEEZAN BANK 18

PEROFORMANCE OF MEEZAN BANK 18

PRODUCT AND SERVICES OF MEEZAN BANK 19

KEY FEATURES OF MEEZAN BANK 20

SWOT ANALYSIS OF MEEZAN BANK 20

PAIN POINTS OF INDUSTRY 22

STRATEGY CANVAS 23

BUYERS UTILITY MAP 25

THREE TIERS OF CUSTOMER 26

SIX PATH FRAME WORKS 27

ERRC GRID OF MEEZAN BANK 32

TO BE CANVAS 33

DIVERGANCE, FOCUS, TAGLINE 34

CONCLUSION 34

EXCECUTIVE SUMMARY
The report contains information regarding Meezan bank and its current business structure, functions,
products and it’s in the overall banking industry as well as the Islamic banking sector. Meezan bank is
the first and largest Islamic Bank in Pakistan. It is also the 8 th largest bank in Pakistan with more than
550 branches in more than 140 cities of Pakistan with a share of 35% in Islamic banking sector.

The method of analysis used in this report includes studying the role of banking industry in Pakistan
in terms of the number of banks both local and foreign banks operating in the industry, the rate of
growth in the industry, analysis related to customers/non customers, applying the Porter’s five forces

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framework, SWOT analysis of Meezan bank and also evaluating the Pain points by which an
understanding related to the how the banking industry is performing and factors on which the banks
are currently competing with one another. The Blue Ocean Strategic framework has been applied on
the Pain points in which they are taken through a sequence that includes Buyer’s Utility Map, three
tiers of customers, ERRC grid, 6 Path Exploration Model, Strategy canvas to decide the new Focus,
Divergence and Tagline of Meezan Bank.

The report show that Meezan bank has many opportunities to grow and distinguish itself from its
competition. The main hurdle is that the State Bank of Pakistan (SBP) has put certain restrictions on
commercial banks so any new initiative first needs to be in accordance with the State Bank of
Pakistan.

It is recommended that:

 Meezan bank should go for their own E-wallets which can be used by their customers for the
modern way of online and physical modes of spending.
 Meezan bank can increase their customers by making alliance with other big industries like
airline industry and offering both airline and customers multi-currency accounts which will
lower the costs for both.
 Meezan bank can start entrepreneurial services and short financing for both students and
people working in cottage industry. Both these segments are not targeted by any banks yet.
 Meezan bank can partner with different ecommerce businesses in order to facilitate its
customers.
 Meezan bank can offer vending machines, small retail outlets in their branches and new
account opening process which currently is not a practice in banking industr y

INTRODUCTION
Banking is an industry that handles money, credit, and other monetary exchanges. Banks give a
protected place to store additional money and credit. They offer investment accounts, authentications
of store and financial records. Banks utilize these stores to make advances. These credits incorporate
home loans, business advances, and auto advances. Managing an account is one of the key drivers of
the every economy. Why? It gives the liquidity expected to families and organizations to contribute
for what's to come. Bank advances and credit mean families don't need to set aside before attending a
university or purchasing a house. Organizations can begin enlisting quickly to work for future request
and development.

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HOW IT WORKS?

Banks are a sheltered place to store overabundance money. That is on account of the Federal Deposit
Insurance Corporation protects them. Banks additionally pay a little percent, the loan fee, on the store.
Banks can transform each one of those spared dollars into $10. They are just required to keep 10
percent of each store close by. That control is known as the hold necessity. Banks loan the other 90
percent out. They profit by charging higher financing costs on their credits than they pay for stores.

Types of Banks:

The most well-known sort of keeping money is retail managing an account. This sort of bank gives
cash administrations to people and families. Online banks work over the web. There are some online-
just banks, for example, ING and HSBC.

Most different banks now offer online administrations. Investment funds and advances target
contracts. Credit associations give customized benefit yet just serve workers of organizations or
schools. Most retail banks likewise offer business keeping money administrations. Group banks are
littler than business banks.

They focus on the neighborhood showcase. They give more customized administration and fabricate
associations with their clients. Venture managing an account was generally given by little, exclusive
organizations. They helped companies discover subsidizing through introductory open stock offerings
or bonds. They likewise encouraged mergers and acquisitions. Third, they worked multifaceted
investment for high total assets people. After Lehman Brothers bombed in 2008, other venture banks

wound up business banks. That enabled them to get government bailout reserves. Consequently, they
should now hold fast to the directions in the Dodd-Frank Wall Street Reform Act.

Shariah keeping money fits in with the Islamic preclusion against financing costs. Additionally,
Islamic banks don't loan to liquor, tobacco and betting organizations. Borrowers benefit share with the
moneylender as opposed to paying premium. That is the reason Islamic banks kept away from the
unsafe resource classes in charge of the 2008 budgetary emergency. (Sources: "Partaking in Risk and
Reward," Global Finance, June 2007. "Islamic Finance Is Seeing Spectacular Growth," International
Herald Tribune, November 5, 2007.

STATE BANK:

Keeping money wouldn't have the capacity to supply liquidity without national banks.

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In the United States, that is the Federal Reserve. The Fed deals with the cash supply banks are
permitted to loan. The Fed has three essential instruments:

1-The save necessity gives a bank a chance to loan up to 90 percent of its stores.

2-The fed reserves rate sets an objective for banks' prime loan fee. That is the rate banks charge their
best clients.

3-The rebate window is a path for banks to obtain finances overnight to ensure they meet the hold
prerequisite.

As of late, saving money has turned out to be extremely muddled. Banks have wandered into refined
speculation and protection items. This level of advancement prompted the saving money credit
emergency of 2007.

INDUSTRY BACKGROUND
 The history of banking began with the first prototype banks where the merchants of the world,
who made grain loans to farmers and traders who carried goods between cities.
 This was around 2000 BC in Assyria and Sumeria. Later, in ancient Greece and during the
Roman Empire, lenders based in temples made loans, while accepting deposits and
performing the change of money.
 Archaeology from this period in ancient China and India also shows evidence of money
lending activity.
 Many histories position the crucial historical development of a banking system to medieval
and Renaissance Italy and particularly the affluent cities of Florence, Venice and Genoa.
 The Bardi and Peruzzi Families dominated banking in 14th century Florence, establishing
branches in many other parts of Europe.
 The most famous Italian bank was the Medici bank, established by Giovanni Medici in 1397.
 The oldest bank still in existence is Banca Monte dei Paschi di Siena, headquartered in Siena,
Italy, which has been operating continuously since 1472.

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  The development of banking spread from northern Italy throughout the Holy Roman Empire,
and in the 15th and 16th century to northern Europe.
 This was followed by a number of important innovations that took place in Amsterdam during
the Dutch Republic in the 17th century, and in London since the 18th century.
 During the 20th century, developments in telecommunications and computing caused major
changes to banks' operations and let banks dramatically increase in size and geographic
spread.
 The financial crisis of 2007–2008 caused many bank failures, including some of the world's
largest banks, and provoked much debate about bank regulation

HISTORY OF BANKING IN PAKISTAN

BEGINNINGS, 1947 – 1970

 Our financial sector evolved very differently from banks in the developed world.
 For nearly a year after partition, Pakistan had no central bank.
 Habib Bank – Originally established in 1941, HBL moved its operations to Pakistan
in 1947 at the request of Muhammad Ali Jinnah, hence becoming the first commercial bank to
lay its foundation in the country.
 The role of domestic banks was particularly limited at the time, accounting for only 25 of the
total 195 bank branches in the country.
 Therefore, the SBP was initially mandated to develop commercial banking channels and
maintain monetary stability so trade and commerce could flourish in the newly-created state.
 Subsequently, Habib Bank, Allied Bank and National Bank were amongst the first to start
operations with strong support from the central bank.

A LEGACY OF PUBLIC CONTROL, 1970 – 1980

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  Commercial banking grew favorably in Pakistan until 1974.
 Under the nationalization policy implemented by Zulfikar Ali Bhutto’s government, thirteen
banks were brought under full government control, and consolidated into six nationalized
banks.
 The Pakistan Banking Council was set up to monitor nationalized banks, marginalizing the
SBP’s role as a regulator.
 These measures were meant to improve lending to prioritized industries.
 However, while directed lending was viewed favorably at the time, little can be said of the
long-term gains that have been achieved.

BUSINESS AS USUAL, 1980-1990

 Over time, the financial sector grew to serve primarily large corporate business, politicians
and the government.
 Board of Directors and CEOs were not independently appointed.
 Lending decisions were not always commercially motivated, and many billions of rupees
were unsurprisingly funneled out of the financial system as “bad loans ”.

 Banks were essentially not in control of their destinies during this period.

PRIVATIZATION, 1990 – 1997

 By 1991, the Bank Nationalization Act was amended, and 23 banks were established – of
which ten were domestically licensed.
 Muslim Commercial Bank was privatized in 1991 and the majority ownership of Allied Bank
was transferred to its management by 1993.
 By 1997, there were still four major state-owned banks, but they now faced competition from
21 domestic banks and 27 foreign banks.
 More importantly, administered interest rates were streamlined, bank-wise credit ceilings
removed and a system of auctioning government securities was established, forcing the
government to borrow at market determined rates .

USHERING IN THE REFORMS, 1997 – 2006

 After privatization, transformational reforms were pushed through.

 The central bank’s regulatory powers were restored via amendments to the Banking
Companies Ordinance (1962) and the State Bank of Pakistan Act (1956).

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  Subsequently, corporate governance, internal controls and bank supervision was strengthened
substantially.
 Legal impediments and delays in recovery of bad loans were streamlined in 2001.
 Furthermore, the scope of prudential framework set up in 1989 was enhanced, allowing banks
to venture into hitherto untapped business segments.
 Lending to small and medium enterprise had previously been neglected, whereas consumer
and mortgage finance had not developed prior to reforms.

THE POST-REFORM ERA, 2006 – PRESENT

 Buoyed by the spirit of liberalization, the sector’s landscape has changed significantly.
 By 2010, there were five public commercial banks,25 domestic private banks, six foreign
banks and four specialized banks.

The Pakistan banking industry constitutes a total of around 31 banks, of which five are public-sector
and four are foreign, while there are 22 local private banks. The majority of thebanking business is
concentrated in a select few in the industry—six banks are the largest competitors in the economy and
hold a major stake of the banking assets in Pakistan. To be more specific, these banks collectively
make up more than 57 percent of deposits and 53 percent of advance in the economy. They are

 Habib Bank Limited (HBL),

 National Bank Limited (NBL),
 United Bank Limited (UBL),
 MCB Bank Limited,
 Allied Bank Limited (ABL) and
 Bank Alfalah Limited.

There are now 9,348 bank branches spread throughout the country, catering to the needs of some 28
million deposit account-holders.

PERFORMANCE OF BANKS IN PAKISTAN

In terms of general execution, the previous decade has regarded the managing an account industry,
with the numbers exhibiting a positive picture as far as monetary record development for banks. To
cite a couple, from 2009 to September 2016:

 Total resources expanded from PKR 6,516 billion to PKR 15,134 billion;
 Deposits ascended from PKR 4,786 billion to PKR 11,092 billion;
 Lending expanded from PKR 3,240 billion to PKR 5,025 billion; and

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  Investments exponentially bounced to PKR 7,625 billion from PKR 1,737 billion out of 2009.
 All of these positives have occurred in a period when the prudential control has been very
choking for the banks contending in the business.
 Over the previous decade, the State Bank of Pakistan has needed to make it extreme for the
banks to work, given the macroeconomic conditions.
 Moving on to the areas execution, 2017 might be a harsh year for banks, as their advantage
edges endure a shot.
 This is on account of back in the June/July time of 2016, an expansive piece of government
securities developed. These were the long haul ventures that banks purchased in 2011-12,
when the loan costs were high, gaining powerful yields of 9 to 14 percent on such securities
 Now, given the way that a substantial lump of these securities have really developed and have
left the market, it is normal that net-premium edges of banks will endure a shot in 2017, and
NFI (non-financed salary) will likewise go down because of diminished hidden additions of
securities winning higher returns than what is being offered in the market.

 However, income will in any case stay under tight restraints as a great deal of banks have
been tidying up their accounting reports these previous years.
 Limited provisioning costs will reinforce the future standpoint of the saving money area as
(GDP) development stays solid, in the 5-percent run.
 Given the low level of rebate rates, banks are currently anticipated that would return to their
loaning business, which they happily played Judas on in 2008-09 because of the substantial
number of nonperforming credits.
 The development of such a substantial piece of high-yielding ventures will mean an extensive
inflow of assets into the market, and given the solid macroeconomic states of the market, a
considerable measure of organizations will be anxious to get their hands on it to extend in this
day and age.
 Favorable government strategies will guarantee that banks do have a considerable measure of
loaning left in them.
 The China-Pakistan Economic Corridor (CPEC) is likewise anticipated that would have some
impact available as the expanded measure of framework improvement implies that industry
will develop.
 Although the loaning presentation of nearby banks in CPEC is constrained to a little part split
between HBL, UBL and Chinese banks, the impacts of such infrastructural development will
make life less demanding for banks later on.

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  In terms of rates, markdown rates in the economy have wound up in a sorry situation, and it is
the sentiment of numerous that a slight increment is likely to work out, however nothing that
will majorly affect the future viewpoint of the part; the administration might need to keep
away from unpalatable strategy changes as they head towards the decisions.
 The banks are likewise anticipated that would tilt more towards loaning and values as
opposed to settled rate ventures now.
 The general M2 cash supply development in the economy is relied upon to stay solid, as is the
store development, which will guarantee that banks have a lot of assets to loan and contribute .

Islamic banking institutions, which represent 12.4 percent of banking-sector assets, contributed 24.1
percent (Rs 188.6 billion) of asset growth during the quarter, compared with the same period a year
earlier. Year on year, they accounted for 16.7 percent (Rs 418.8 billion) of total asset growth

PERFORMANCE IN 2017
 Pakistan’s banking sector remained sound and stable in 2017, with total assets growing to
Rs18.34 trillion ($159.5 billion) from Rs15.83 trillion the previous year.
 Equity increased by Rs36.7 billion (2.7 percent) during the quarter, compared with Rs28.4
billion (2.1 percent) during the same period in 2016.
 Banks have added 305 branches and 416 ATMs during the fourth quarter of calendar year
2017, while 304 additional branches have been linked to the online network.
 There has also been a rise in point of sales machines and plastic cards.
 On a year-on-year basis, assets grew by 15.9 percent in 2017 compared with 11.9 percent the
previous year (2016). Net advances grew by 18.4 percent and net investments by 16.2
percent.

PORTER’S FIVE FORCES ON BANKING INDUSTRY

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THREAT OF NEW ENTRANTS:

 Despite the regulatory and capital requirements of starting a new bank, between 1977 and
2002 an average of 215 new banks opened each year according to the FDIC.
 With so many new banks entering the market each year the threat of new entrants should be
extremely high.
 However, due to mergers and bank failures the average number of total banks decreases by
roughly 253 a year.
 A core reason for this is, what is arguably, the biggest barrier of entry for the banking
industry, trust.
Because the industry deals with other people's money and financial information new banks
find it difficult to start up.
 Due to the nature of the industry people are more willing to place their trust in big name, well
known, major banks who they consider to be trustworthy.
 The banking industry has undergone a consolidation in which major banks seek to serve all of
a customer’s financial needs under their roof.

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  This consolidation furthers the role of trust as a barrier to entry for new banks looking to
compete with major banks, as consumer are more likely to allow one bank to hold all their
accounts and service their financial needs.

Ultimately the barriers to entry are relatively low for the banking industry. While it is nearly
impossible for new banks to enter the industry offering the trust and full range of services as a major
bank, it is fairly easy to open up a smaller bank operating on the regional level.

POWER OF SUPPLIERS:

 Capital is the primary resource on any bank and there are four major suppliers (various other
suppliers [like fees] contribute to a lesser degree) of capital in the industry.
1. Customer deposits.
2. Mortgages and loans.
3. Mortgage-backed securities.
4. Loans from other financial institutions.
 By utilizing these four major suppliers, the bank can be sure that they have the necessary
resources required to service their customers' borrowing needs while maintaining enough
capital to meet withdrawal expectations.

The power of the suppliers is largely based on the market, their power is often considered to
fluctuate between medium to high.

POWER OF BUYERS:

 The individual doesn't pose much of a threat to the banking industry, but one major factor
affecting the power of buyers is relatively high switching costs.
 If a person has one bank that services their banking needs, mortgage, savings, checking, etc, it
can be a huge hassle for that person to switch to another bank.
 To try and convince customers to switch to their bank they will often times lower the price of
switching, though most people still prefer to stick with their current bank.
 The internet has greatly increased the power of the consumer in the banking industry.
 The internet has greatly increased the ease and reduced the cost for consumers to compare the
prices of opening/holding accounts as well as the rates offered at various banks.
 ING Direct introduced high yield savings accounts to catch the buyers' attention, then they
went a step further and made it very easy for customers to transfer their money from their
current bank to ING.

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ING was successful in their attempt because they managed to make switching costs very low in terms
of time and capital.

AVAILABILITY OF SUBSTITUTES:

 Some of the banking industry's largest threats of substitution are not from rival banks but
from non-financial competitors.
 The industry does not suffer any real threat of substitutes as far as deposits or withdrawals,
however insurances, mutual funds, and fixed income securities are some of the many banking
services that are also offered by non-banking companies.
 There is also the threat of payment method substitutes and loans are relatively high for the
industry.
 For example, big name electronics, jewelers, car dealers, and more tend to offer preferred
financing on "big ticket" items. Often times these non-banking companies offer a lower
interest rates on payments then the consumer would otherwise get from a traditional bank
loan.

COMPETITIVE RIVALRY:

 The banking industry is considered highly competitive.

 The financial services industry has been around for hundreds of years, and just about
everyone who needs banking services already has them.
 Because of this, banks must attempt to lure clients away from competitor banks.
 They do this by offering lower financing, higher rates, investment services, and greater
conveniences than their rivals.
 The banking competition is often a race to determine which bank can offer both the best and
fastest services but has caused banks to experience a lower ROA (Return on Assets).

Given the nature of the industry it is more likely to see further consolidation in the banking industry.
Major Banks tend to prefer to acquire or merge with other banks than to spend money marketing and
advertising.

ABOUT MEEZAN BANK

Meezan Bank, Pakistan's first and biggest Islamic bank, is a freely recorded organization with a paid-
up capital of Rs. 10 billion. It is one of the quickest developing money related establishments in the
keeping money part of the nation. With its Vision of setting up 'Islamic keeping money as managing
an account of first decision ...' – the Bank initiated activities in 2002, in the wake of being issued the
primary ever Islamic business saving money permit by the State Bank of Pakistan.

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The Bank gives a far-reaching scope of Islamic keeping money items and administrations through a
retail managing an account system of in excess of 570 branches in excess of 140 urban communities
of the nation. Sponsored by a cutting-edge T-24 center keeping money framework, the branch
organize is bolstered by every minute of every day managing an account benefits that incorporate
more than 570 ATMs, VISA and MasterCard Debit cards, a Call Centre, Internet Banking, Mobile
Application and SMS Banking office.

The Bank works entirely under the standards of Islamic Shariah and is all around perceived for its
item advancement capacity, Islamic managing an account research and warning administrations. To
guarantee strict Shariah-consistence in every one of its items and administrations, the Bank has set up
a devoted Product Development and Shariah Compliance office that works under the supervision of
the Bank's in-house Resident Shariah Board Member and a Shariah Supervisory Board containing
universally prestigious Shariah researchers.

Meezan Bank has reliably been perceived as the Best Islamic Bank in Pakistan by various
neighborhood and global organizations, which is a declaration of the Bank's sense of duty regarding
magnificence. These foundations incorporate Islamic Finance News - Malaysia, Global Finance
magazine - New York, Asset AAA - Hong Kong, Asia money – Hong Kong, The Banker – United
Kingdom, South Asian Federation of Accountants, Islamic Finance Forum of South Asian Awards,
Pakistan Banking Awards – Dawn and IBP Pakistan, Employers Federation of Pakistan and CFA
Association - Pakistan.

MEEZAN VISION

Establish Islamic banking as banking of

first choice to facilitate the
implementation of an equitable economic
system providing a strong foundation of
stablishing a fair and just society for
mankind.

MEEZAN MISSION

To be a premier Islamic bank offering a non-

stop shop for innovative value-added products
and services to our customer within the bound
of shariah, while optimizing the shareholder 16
value through an organization culture based on
learning, fairness, respect for individual
enterprise and performance
VALUE OF MEEZAN BANK

Shariah-compliance, Integrity, Professionalism, Innovation,

Service Excellence, Social Responsibility. Staff is
committed, motivated and professionally trained and who
are empathic to their customer’s need

PERFORMANCE OF MEEZAN BANK

The year 2017 was a year of notable achievements for Meezan Bank. Despite low discount rates, as
mentioned above, the Bank recorded excellent results and maintained its position as the leading
Islamic bank in Pakistan. Meezan is also ranked as the fastest growing bank in the country

The key business results achieved in 2017 are as under:

Key Business Result Growth

Financing 35%

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Branch Network 5%

Presence 9%

Deposits 19%

Total Assets 19%

Profit After Tax 14%

6% Right Issue to Existing Shareholders 100%

Equity 22%

Trade Business (Imports and Exports) 29%

PRODUCT OF MEZZAN BANK

 Meezan rupee current account
 Meezan rupee saving account
 Meezan bachat account
 Karobari munafa account
 Meezan business plus account
 Meezan kids club account
 Meezan teens club account
 Meezan kafala
 Meezan labaik
 Foreign currency current account
 Monthly modaraba certificate\
 Certificate of Islamic investment
 Meezan amdan certificate
 Dollar modaraba certificate
 Car Ijarah
 Easy home
 Laptop ease
 Meezan Roshni

SERVICES OF MEZZAN BANK

 Online banking
 Internet banking

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  Meezan visa debit card
 SMS banking
 SMS alert
 Meezan master card or titanium debit card
 Meezan ATM network
 Meezan web pay
 Meezan quick pay
 Mobile banking app
 Meezan banking premium

KEY FEATURES OF MEEZAN BANK

 Highest Financing Amounts
 Rental paid after delivery, not in advance
 Maximum Finance against Property Value
 Fastest processing and delivery
 Flexibility to make Partial Pre-payments
 Shariah Complaint Life Takaful Facility
 Affordable Instalments and regular reducing monthly rental
 Eligibility Criteria
 Citizenship
 Age
 Customer/Applicant
 Income
 Employment Tenure
 Products
 Easy Buyer
 Flexible financing from minimum PKR 500,000 to PKR 50 million for Salaried, SEP, NRP &
Businessmen customers
 Easy selection of financing tenure from 3 years to 20 years

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SWOT ANALYSIS OF MEEZAN BANK

STRENGTH
 First exclusive Islamic bank.
 The largest Islamic Bank in Pakistan with a network of over 550 branches in 140 cities.
 Strong growth of its Islamic banking SBU.
 The members of the Shariah Supervisory Board of Meezan Bank are Internationally-
renowned scholars, serving on the boards of many Islamic banks operating in different
countries.
 Meezan Providence Certificate is a long haul venture authentication uncommonly intended to
take into account the necessities of corporate and business worries for reasons for
contributing their Provident, Pension and Gratuity Funds. As any reasonable financial
specialist, your fundamental concerns would be add up to security alongside the most ideal
returns, particularly as these assets are a trust from your workers and one that bears a critical
duty.
 Karachi, August 20, 2008: Meezan Bank, the largest Islamic Bank in Pakistan has been
conferred the Best Islamic Bank Award by Rawalpindi Chamber of Commerce and Industry
The Chief Minister of Punjab Mr. Shahbaz Sharif bestowed this award to Mr. Saleem Khan
Regional Manager - North, Meezan Bank at 21st RCCI achievement awards ceremony held
at the Convention Centre in Islamabad.
 Dedicated and professional staff
 Shariah board of renowned scholars
 Healthy working environment

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  Strong shareholding

WEAKNESS
 High charges for various exercises, for example, on the web or Demand Draft when
contrasted with contenders.
 Absence of advancements and promoting of their items and administrations.
 Long and broad documentation
 Concentrated methodology influencing procedure to moderate
 Feeble promoting methodology, Target showcase not recognized.
 Offering fewer services than the competitors.
 Risk Averse, approach of Head office.
 The Islamic monetary framework isn't something that can work in disengagement of the geo-
political and administrative framework, and in addition, and all the more significantly the





21
 general public's practices towards the orders of Islamic Shariah in individual and aggregate
issues. As needs be, one can without much of a stretch envision that in an economy whereby
the vast majority of the agents are not legitimate in reasonably exhibiting the budgetary
articulations of their organizations, that it is so hard to present a benefit and-misfortune
sharing based money related arrangement.
 Meezan Bank Limited has no Credit card facility
 Restricted Shariah based policies.

OPPORTUNITIES
 House financing sector can be targeted to maximize the profit
 Growing demand of Islamic financial product and services
 Venturing into Islamic groups outside the countries as opportunity to expand business in UAE
and Golf states. i-e financial institutions.
 Coming up with. Products for the SME to targeting the medium level customers.
 Doing business with companies having Islamic mindset. I-e Islamic financial Institutions.
 Increase branch network within the country

THREATS
 New competitors setting up their Islamic banking sections and they have the infrastructure,
skill, ability, resources & attitude to capture the market more than the Meezan bank
 High Interest Rate from SBP
 SBP has not special policy regarding Islamic Banking
 Misconception and misunderstandings among the general people about Islamic baking.

 Non-availability of conventional banking product like credit card etc.

 Aggressive marketing by conventional banking
 Disassociation of Maulana Taqi Usmani from the Shariah advisory board of Meezan Bank.

PAIN POINTS OF INDUSTRY

HEFTY REGISTRATION PROCESS:

The procedures in account registration are redundant and has many repetitive steps that makes the
customer go through numerous documentation.

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LONG WAITING HOURS:

Customers have to wait a fair amount of time to complete the registration process and other
transactions on visiting the branches.

NUMBER OF BRANCHES:

The location and accessibility to the branches sometimes becomes hectic for the customers.

IN BRANCH SERVICE:

The level of comfort of the services provided at different branches to facilitate the customers.

FINANCIAL ADVICE QUALITY:

The guidance provided regarding the management of assets, risk and which service or product is more
suitable to the customer’s needs.

RELIGIOUS BELIEFS:

The unethical nature of interest and it’s unacceptability in terms of Islamic point of view that makes
Muslims to find a way of lending, borrowing and investing without interest.

BRANCH HOURS:

No extended hours of banking for accommodating the busy schedules of customers

ONLINE BANKING:

The features and most importantly user interface offered in the current systems are not sufficient and
user friendly.

STRATEGY CANVAS
The strategy canvas is basically a tool to visually show how a company will create or has created a
blue ocean strategy. It is used to plot how the current competitors compete in a market space, what
factors they compete on and how the company and the competition scores on each key factor. The
graph in outlines comparison between the value curves of Banking industry vs the value of Meezan
Bank. Among these two, the Banking industry is considered as the conventional method and Meezan
as in Blue Ocean.

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 AS IS STRATEGY CANVAS
10

6
OFFERING

0
Hefty registration process Religious Beliefs In Branch serviceServices & Product OfferingsOnline Banking

Competitive Factors

Industry Meezan

The above canvas shows that apart from the factor religious belief that is essential part of Islamic
banking, there is not much difference between the factors of industry and Meezan Bank. This is the
time when a bank like Meezan Bank needs to create its blue ocean by varying the dynamics of these
important factors of the banking industry.

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BUYER’S UTILITY MAP

The problem starts from the first step when a user tries to open his bank account. The process of
opening an account is quite hefty and requires a lot of time and documentations of the customer. Also
the customer have to visit the branch in order to open his account which requires a lot of time in
today’s busy routines. After filling lengthy forms and providing the necessary documents the person
has to wait a day or two more in order to get his debit card and cheque book. This whole process of
onboarding is quite painful for the customers.

Nonetheless after the account has been opened, visits to the branch are sometime really painful for the
customers like waiting in long ques. There is almost nothing for the customers to kill their time
besides sitting on the sofas. The customers are bounded to visit branches in the specific bank timings
which are sometime very difficult to manage in busy routines of the working and employed people.

User Interfaces of online banking applications are sometime so complicated that it is really difficult
for the customers to find the options they are looking for which kills the ease of online banking
applications. The risk of theft and fraud has always been a big problem for the banking industry no
matter the transaction is being online or the person is physically going for deposits or withdrawals
from the bank. Getting a loan from any bank requires guarantee from a source which is sometime not
easy to find and customer faces lot of problems to get money on time.

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Sometimes the charges of the product and services being offered by the banks is not relatively high
compared to their maintenance and renewal costs. Lastly, though it is not good for a bank that its
customer is getting his account closed, but the process for the account closing is quite same hefty as
the opening process. The customer is required to visit the branch in order to get his account closed.

THREE TIERS OF CUSTOMERS

SOON-TO-BE:

Soon-to-be non-customers are the ones who sit on the edge of the industry and use meezan bank’s
services minimally. These first tier non-customers are always in search of optimal solutions and they
shift market very quickly as soon as they get opportunities. This tier includes students and youngsters
since they look for promotions, discounts. Whichever bank offers mazimum discounts and great
deals, they shift to it. Example Meezan bank is currently offering discount on Junaid Jamshed, meat
one, mycart.pk etc. Students also look for the banks who provide them loans easily.

REFUSING:

People who refuse Meezan bank’s services include non-muslims. Since Meezan bank is an islamic
bank, non-muslims will not prefer to use it. Non-muslims might have the impression that it is only for

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muslims. Also, meezan bank’s branches have a islamic envionment, example female workers wear a
hijaab mandatorily. This further contributes to a islamic impression. Secondly, this tier also includes
customers of other banks. These people already have an account in other banks and are used to them.
They will not change their bank due to the extra effort required in closing and opening an account.
People might be using certain bank because of convenience of nearby branches. Banks with high
number of branches will be prefered by some. This tier may also include loyal customers of other
banks who are satisfied with their bank’s offerings. People who prefer conventional banking over
islamic banking are also refusing non-customers. People who believe islamic banking is not much
different from conventional banking. There are people who prefer to use interest based accounts.
They have savings accounts in banks who give maximum rates , these people refuse islamic banking

UNEXPLORED:

Unexplored non-customers of Meezan bank include people who live in rural areas. These people are
unaware of bank’s services and ease. Few banks have reached rural areas of Pakistan, a lot of areas
are still unexplored. The population of rural area of Pakistan is around 61% of the total population,
thus it is a large tier. Secondly, this tier can also include women. There are a lot of women workers in
rural areas. Cottage industry have a lot of women workers, if these women can be reached it will be
beneficial for the industry, the workers as well as banks.

SIX PATH FRAME WORK

LOOKING ACROSS TIME

As fintech companies are the major threat to banks in the upcoming years, so to cope up with the
competition provided by those company is to look across time and harness the power of modern
technology to provide solutions that will ease the life of the customers. A major services that can be
offered by Meezan Bank in this regard is Digital wallets.

Digital wallets are expected to become a major player in the online payment industry, as consumers
constantly continue to look for additional easier and quicker ways to purchase goods and services
online.

A digital or electronic wallet is a payment method that is used via any device which is connected to
Internet, a software that holds digital cash, and a digital certificate with a digital signature, as well as
billing, shipping, and payment information for online transactions.

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The electronic wallet makes online shopping easier and faster than ever before that is why it is
becoming more and more popular and widely used.

By storing consumer’s payment information safely and compactly, electronic wallets diminish the
need for an actual wallet. Also, digital wallets are a potential benefit to companies that collect
consumer data as the more companies know about their customers’ purchasing habits, the more
effectively they can satisfy their needs.

Beneficial features of E-Wallet:

 Money from the electronic wallet online account can be spent for any kind of online goods or
services anywhere in the world.
 Easiness of managing the account from mobile phone or any device connected to Internet.
 No fees for transferring money and no membership fee.
 Minimal setup and easiness of use. Once the software is installed on consumer’s smartphone
or computer, he starts by entering all the pertinent information.
 The digital wallet is now set up and while the consumer is purchasing something on online
store, the digital wallet software has the ability to automatically insert the necessary
information in the online payment form.
 By default, most digital wallets prompt when the software recognizes a form, if you chose to
fill in the form automatically, you will be prompted for a password. So unauthorized users
have no possibility to see consumer’s personal information stored on a particular computer or
device.
 Secure method of transferring money as customer’s information is encrypted or protected
from any fraudulent activity by a unique software code.
 By using electronic wallet retailers enable shoppers to purchase more quickly and easily and
take advantage of impulse purchases and the psychological advantage of not using cash or
credit card.
 Although a wallet is free of charge for consumers, Meezan Bank can charge merchants for
wallets. They can take a percentage of every successful purchase directed through their
wallets and charge merchants a flat fee.

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LOOKING ACROSS COMPLEMENTARY PRODUCT AND SERVICE OFFERING:

REVAMPING THE ACCOUNT OPENING PROCESS:

The first thing Meezan Bank can do is to reduce the days of account opening process in Pakistan. As
per the regulations from State Bank of Pakistan, minimum documents required for account opening
are original National Identity Card and a Utility Bill. What they can do is allocate their chosen
representatives on specific shops in every area where they will have biometric machines to verify the
thumbprints. After online submission of a form, the person will be sent to the nearest shop in his area
for thumb, NIC and Utility Bill verification. After successful verification, the representative will
assign the new customer an account number and a cheque book with serial numbers and account
number pre-defined by bank. The representative will scan and send the documents to bank along with
the thumbprint from biometric machine. This will allow bank to save their cost in lengthy process and
extra resources allocated to account opening process. Each representative will get commission on
every new account opened.

VENDING MACHINES AND RETAIL SHOPS:

When a customer goes to bank for some query or issue, he has to wait for a long time in order to meet
the representative. What Meezan Bank can do is to install vending machines in their branches and also
try to open some retail shops like those on gas stations so that a person’s waiting time doesn’t
becomes a pain point. On a large scale some grocery items should also be place so that people don’t
think so much before coming for queries, what they can do is plan their shopping and get their issues
resolved at the time.

EXTENDING BRANCH HOURS:

Branch hours have always remained a pain for many of the customers. Customers have to take some
time out from their busy routines in order to go branch and get their issues resolved. As most of the
customers are working class going 9 to 5, what Meezan bank can do is that they can extend branch
hours of the branches which are on most important roads in Pakistan. This will allow the customers to
visit their respective branches on the way back to home.

PARTNERING WITH ECOMMERCE WEBSITES IN PAKISTAN:

As online shopping is the new trend in the country, Meezan bank can partner with the major
ecommerce providers in Pakistan in order to extend its customers. Every customer who buys anything
from Meezan’s account from these ecommerce websites will get reward points. Some other services l

29
like 30 days insurance and money bank guarantee on all the purchases will surely attract new
customers.

COMPLEMENTARY BUSINESS PARTNERSHIP:

Airlines industry is one of the biggest multinational businesses out there. And yet there is no bank
tailored specifically for them. For instance when both the airlines and its customers are on the same
multicurrency bank and they seamlessly move the money in each other’s account without dealing with
transfer or currency exchange losses. In the case in which both airline and the customer has same
multicurrency accounts, here's no card involved so there's no card fees, there's no international
transfer so there's no transfer fee and since both accounts are multicurrency the sender's currency
becomes irrelevant as long as the conversion can satisfy the bill.

To make our plan successful we've got to think of a bank account as a digital wallet. A multicurrency
digital wallet to be more precise. And it must have all the benefits that come a digital wallet.

 A quick user onboarding

 Services that go beyond basic account management and money transfer.

By partnering with airline industry which is a rich source of KYC data. Every time a customer books

a ticket we give them an option to open a multicurrency account with us so that he saves more when

he books the ticket next time. Maybe we can also add rewards and loyalty points to the mix to make

the package a lot more appealing.

And with this we can have a continuous sales pipeline. By helping airlines save a little we gain a huge
amount of lifelong potential customers.

LOOKING ACROSS STRATEGIC GROUPS:

Almost every other bank in Pakistan’s banking industry focuses on either corporate customers or
employed individuals or a mixture of both. Hence other potential segments are neglected because the
motive of all these banks is to get as much of the money from these two segments for speedy and
smooth continuity of their operations which majorly includes financing. The two most important

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segments that are neglected by every bank are the women working in the cottage industry of rural
areas and the students who are on the edge of completing their education and start their careers.
The population of rural area of Pakistan is around 61% of the total population. Cottage industry of
Pakistan is very much renowned in the world and most of the workers in this industry are women, but
due to limited access to the markets women are not able to get good revenues from this industry. What
Meezan bank can do is collaborate with many of the ecommerce businesses in Pakistan and help out
these women to get their product and services to rest of the world and get good revenues. Meezan
bank can offer them bank accounts to accept the payments from other parts of the world while
ecommerce website will help these women to reach the global customers. Meezan bank can also
invest in this cottage industry which has a lot of potential to grow by giving small loans to the women
working so that they can work to their full potentials. Like this Meezan bank will have the customers
which the current industry is not focusing at all. This growing business of cottage industry will surely
help Meezan bank and other ecommerce businesses to get potential customers.
On other hand not a lot of the banks in the industry are currently focusing on students. There are
almost 1949000 post-secondary enrollments of students who are on edge of their education to start
their careers. Many of the world’s renowned startups are started from this segment. Meezan bank can
provide small financings and entrepreneurial services to these students who want to start their own
businesses. No wander Facebook was also started from this level and after its humongous success, the
creator did not switch his account and continued with the same account. So, no wander it is quite
possible that after starting these services Meezan bank can get another hit startup’s account in its
pocket.

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ERRC GRID OF MEEZAN BANK

ELIMINATE REDUCE

>Account opening
process.
>Hefty registration
>Waiting time.
process.
>Number of
Branches.

>Service Offering. >Vending machine.

>Branch Hours. >Small retail
>In Branch Service. shops.
>Financial Advice >E- wallets.
RAISE Quality. CREATE
>Consultancy
services

ELIMINATED:

Hefty Registration process will be completely eliminated after that launch of easy registration process
through retail outlets.

REDUCED:

Long waiting hours will reduced after the implementation of new account opening process. Number
of branches that are more than 500 should also be reduced for cost reduction. Efficient placement of
branches is required because competitors almost have half of the branches as Meezan bank .

RAISED:

 Availability of vending machines in Banks will raise the value for every walking customer.
 In branch service will also be raised.

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  Financial advice quality will be raised by providing consultancy services to young
entrepreneurs

CREATE:

 Small retail outlets will work as mini bank branches, where customer can avail limited
banking facility.
 Introduction of Meezan E-wallets will be disruption in the Banking Industry.
 Additional financial consultancy services will be provided to new startups & small business to
grow and become sustainable

TO BE CANVAS

TO BE STRATEGY CANVAS
10
9
8
7
6
5
4
3
2
OFFERING

1
0

Competitive Factors

Industry Meezan

SERVICES & PRODUCT OFFERING:

The number of services & products offered that targets diverse set of customers .

VENDING MACHINE:

The availability of snacks and beverages facility to satisfy thirst and hunger of customers .

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SMALL RETAIL SHOPS:

Facility to do small time grocery shopping while a customer waits for his appointment to meet the
representative.

E-WALLETS:

The facility to link a customer’s bank account with digital wallets easing to make payments online,
avail discounts on different brands and have the access to make payments in multicurrency.

CONSULTANCY SERVICES:

Services for supporting young entrepreneur in starting their business regarding business model,
revenue flow, opportunities for investments.

FOCUS, DIVERGENCE, COMPLLEING TAGLING

FOCUS
 Financial advice quality
 Flexi branch hours
 Users friendly online banking

DIVERGENCE
 E-Wallet
 Vending machines and retails store
 Consultant services

TAGLINE
Changing banking’s present and future

CONCLUSION
Technology is changing the attitudes and needs of the banking customers at incredible rate. This
requires that banks and banking standards must also evolve with the same pace in order to keep up
with the changing needs. In other banks around the world, the adaption of technology is at the
lightning speed but the case is not the same here with the banks in Pakistan. The first thing that

34
Meezan Bank can do to cope up with technology and need changes is to start the E-wallet services to
its customers which will make online shopping easier and faster than ever before that is why it is

becoming more and more popular and widely used. By storing consumer’s payment information
safely and compactly, electronic wallets diminish the need for an actual wallet. Also, digital wallets
are a potential benefit to companies that collect consumer data as the more companies know about
their customers’ purchasing habits, the more effectively they can satisfy their needs. Another step that
Meezan Bank can take is by offering a different account opening process which is not being practiced
in the industry at the moment. This process will make the onboarding process easy for the customers.
Putting vending machines and small retail stores will kill the painful waiting time of customers during
their visits to their respective branches. Extending the branch hours of certain busy branches will also
make a positive impact on the minds of the customers. Partnering with major business industries like
airline industry will let Meezan Bank open its door to global customers.

Multi-currency accounts will full fill the purposes of both, the global customers and the airline
industry. Entrepreneurial services and small financing to their to-be and unexplored customers with
alliances of different ecommerce businesses will open new horizons of profit for Meezan Bank.

Other than these, Meezan Bank should focus on their current strategy by spreading awareness of
Islamic Banking and clearing the differences of conventional and Islamic banking among the youth of
Pakistan. As technology is vital in this industry, Meezan Bank in coming future should implement the
Block chain technology in order to make the transactions completely transparent. Unlike their major
Islamic banking rivals, Meezan Bank has got almost double number of branches. The concept of
efficient allotment of these branches should be used and the number of branches should be reduced in
order to bring the operating costs down. Account disposal process requires the customers to visit the
branch physically, steps should be taken in order to make this process digitized so that customers have
ease in order to close their accounts. Last but not the least Meezan Bank should put more focus on the
friendliness of their staff and their behavior with the customers as it a vital factor for competing in the
industry. They should raise their standards above the industry in order to facilitate their customers.

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