It is the first stage of Strategy-Formulation Analytical Framework the following techniques are used to gather information:
EFE Matrix
IFE Matrix
CPM Matrix
THE EXTERNAL FACTOR EVALUATION (EFE) MATRIX OF KHYBER BANK
KEY EXTERNAL FACTORS: OPPORTUNITIES 1
Opening Of New Branches that is the good
WEIGHT
RATINGS
0.10
4
WEIGHTED SCORE
0.4
opportunities for BOK 2
3
Expand its new technological advancement like; tale-banking and internet banking facilities in order to serve the customer more efficiently. e fficiently. Hire
skilled
&
professional
educated
0.15
3
0.45
0.06
2
0.12
0.25
2
0.05
0.05
3
0.15
0.08
2
0.16
0.10
3
0.3
personnel 4
5
6
Investment in public and industrial sectors
Enlarge the MFU Department
Collection of Bill THREATS
7
Advanced Technology of Other Banks
8
Recovery of loans Most of politician take
0.10
3
0.3
0.08
2
0.16
0.03
4
0.12
loan and recovery is no possible.
9
Foreign banks
increase day by day in
Pakistan
10
BOK of Khyber is a provincial bank. KPK Govt. Interference in bank policy .
1
TOTAL
2.21
EXPLNATION: Opportunities:
They have the opportunity to open new branches in the country as well as in foreign countries. They should open new branches at least at the district level. Besides this they have the opportunity to take an NOC from SBP and open new branches in Afghanistan. They have the opportunity to open new branches especially in the rural areas of Pakistan. Its consider rating 4.
They have the opportunity to advance their technology especially to start on-line banking and ATM facilities which is the need of the day. To compete with others they have to take the opportunity and install new soft ware in all their branches. therefore it is rated as 3 which is reasonably important.
The BOK has the opportunity to hire skilled, professional, and educated persons who are specialized in
the
course
of
banking
and
accountancy
like
CAs
(Chartered
Accountant).
therefore it is a comparatively less opportunity and has b een rated as 2. They have the opportunity to invest their liquid cash in public & industrial sectors especially in
commercial plazas which is a most profitable activity for the BOK. They have the opportunity to invest in the IT sector also especially in software programming. They can also invest in the mineral resource sector of the KPK that opportunity is considered less important and rated as 4.
They have the opportunity to enlarge the MFU department and make it more efficient for small businesses. The processing of such loans can be made easier. Therefore it is rated as 3.
Being a provincial government bank they have the opportunity to make agreement with private as well as government organizations to collect utility bills for them and through this activity the bank can earn profit without any investment. So its rated as 2.
Threats:
The technology of the other banks is advanced from the BOK because of the on – line banking system and ATM facilities. The
BOK does not have these facilities. therefore its rated as 3
because technology is a lethal weapon if used in the right way. As it is the bank of the provincial government so most of the politicians take loans from the bank.The
recovery becomes impossible from such politicians due to which the bank faces problems of bad debts and the bank incurs major loss therefore it is rated as 3.
The number of foreign banks is increasing day by day in Pakistan. They also provide good quality services at the same cost as the BOK provides to their clients. Thus this too is a potential threat for the BOK. so it is a less intense threat and rated as 2.
As the political situation is always unstable, that is why the government does not give proper attention to the performance of the BOK. Beside this, the KPK government is directly involved in the affairs of the bank which may affect the position of the bank. so it is very important threat as rated
as
a
4.
Threats faced by BOK show that economic instability, better services by competitive banks and changing government policies with technological advancements are most feared and should be confronted and overcome by providing better services and competencies The weighted score from 1 (weakest) to 4 (strongest) is 2.21
THE INTERNAL FACTOR EVALUATION (IFE) MATRIX OF KHYBER BANK.
KEY INTERNAL FACTORS:
STRENGTHS
WEIGHT RATINGS
WEIGHTED SCORE
1
As the Bank of Khyber is the bank of the KPK 0.01
2
0.02
0.2
3
0.6
0.03
4
0.12
0.04
3
0.12
0.03
4
0.12
government the people repose more confidence in the BOK as compared to other banks and deposit more money in it also.
2
3
4
Launching of New Product
Obtained Membership of SWIFT
.
Launched Products for the Govt.& Semi
Govt. Employees
5
Micro Finance Unit (MFU)
6
7 8
Finance provided by the Government
Provide training to students Personnel
0.03
2
0.06
0.3
3
0.9
0.03
3
0.09
WEAKNESSES
9
Number of branches
10
Lack of Technology
11
Behavior of the staff4
12
Branches in other countries
13
No proper marketing
14
Load of work
0.03
2
0.06
0.05
1
0.05
0.03
2
0.06
0.04
1
0.04
0.10
2
0.2
0.03
1
0.03
15
Influence of Provincial Govt
16
Heavy load of Bad Debts
TOTAL
0.02
2
0.04
0.03
3
0.09
1
2.6
EXPLANATION:
By analyzing above factors it is noted that BOK ’s credibility due to its brand name is an important factor to consider. BOK ’s oldest and richest experience in banking has positively impacted a large range of customers. Moreover, BOK training programs for its employees and same working conditions among branches are an important indicator which needs a lot of attention by its management. Overall BOK receives a 2.6 total weighted score which on a 1 to 4 scale shows more than average, indicating BOK ’s strong internal position but needs some considerations on part of employees training, customer services, and proper maintenance of branches.
COMPETITIVE PROFILE MATRIX OF BOK:
As we know that this matrix identifies a firm’s major competitors and its particular strengths and weaknesses in relation to the firm’s strategic position. The ratings are given to each critical success factor, where
1 = major weakness
2 = minor weakness
3 = minor strength
4 = major strength
After analyzing BOK and its 2 competitors United bank limited and Bank Al Falah, their major critical success factors we came up with the following matrix. Competitive Profile Matrix BOK Critical Success Factors Customer Service Product Diversification Electronic Commerce Market Share Global Expansion Profits Offered Advertising
ABL
BOP
ZTBL
Weights R
S
R
S
R
S
R
S
0.2
2
0.4
3
0.6
3
0.6
4
0.8
0.15
3
0.45
4
0.6
4
0.6
3
0.45
0.15
4
0.6
2
0.3
2
0.3
2
0.3
0.17
4
0.68
1
0.17
1
0.17
2
0.034
0.15
2
0.3
2
0.3
3
0.45
1
0.15
0.08 0.1 1
2 3
0.16 1 0.3 1 2.91
0.08 0.1 2.15
1 3
0.08 0.3 2.5
2 2
0.16 0.2 2.094
EXPLANATION:
Customer service: Customer service of BOK is not that satisfactory and they need to
improve on this aspect. As compared to BOK, the service of competitors is good and their customers are happier with them.
Product diversification: The variety of products being offered to customers is more
impressive of ABL and BOP. BOK have a satisfactory product base. But it still have room for improvement.
Electronic Commerce: BOK have the facility of online banking almost in every branch in
big cities and much of this facility in smaller cities as well. ABL , BOP And ZTBL don’t have sufficient online facilities even in big cities.
Market share: BOK have market share of more than 25% where as ABL have
approximately 9% , BOP 12% and ZTBL 10% of the market share.
Global expansion: Global expansion of BOK , ABL.BOP, And ZTBL are relatively..
Thus, form the total we can see that BOK have more score than its competitors. And so, it is performing more successfully than its competitors, that are United bank limited and Bank Of Punjab, allied Bank limited etc.
