Published on February 20, 2014
Strategic Analysis of BOC Table Contents • • • • • Introduction Internal Analysis External Analysis Stake Holders Conclusion
History of BOC • Bank of Ceylon (BOC) was ceremoniously opened by Sir Andrew Caldecott, then Governor of Ceylon, on the 1st August 1939 at the City office premises located in Fort Colombo. • BOC's first branch in 1941 at Kandy and subsequently in outstation towns, such as Galle, Jaffna and Trincomalee. • Bank of Ceylon opened its first overseas branch in 1949 in London. • The Bank was nationalized in 1961 to facilitate the national development efforts. • The first Foreign Currency Banking Unit (FCBU) in Sri Lanka was set up by the Bank in 1979 • The first Merchant Bank in Sri Lanka was set up by Bank of Ceylon in 1982. (The Merchant Bank of Sri Lanka Limited, )
• Bank of Ceylon introduced Ceybank Visa Credit Cards in 1989 for the first time in Sri Lanka • Bank always make adjustments to innovative focus, service differentiation, diversification, cross- selling ability, governance and risk control. Further to take off with the country in its development process, Bank has launched products/units such as an Islamic Banking Unit, which operates through Island wide network and Investment Banking Unit aiming to diversify its portfolio in non-core banking. • The bank has a network of 606+ branches, 200+ extension centers, and 484+ ATMs. It also has an around the clock call center at 0094 11 2204444 and an around the clock branch at its Colombo Office. • Addition to the local presence, the bank maintains an Off-shore Banking Unit in the head office in Colombo, and three branches in London, Malé, & Chennai.
Resources of BOC Tangible Intangible Buildings Machines (ATM, Etc) Vehicles Furniture and fittings Land Office Equipment's Finance Assets Cash, accounts ,stocks and bonds Knowledge Skills, Service Intellectual Properties Trade marks, Patens, copyrights Trade Secrets
Core Competency Bank Profit Income Deposit Advance BOC 9.7 93.4 801 697 People’s 6.4 88.1 758 675 Com. 10.4 53 435 400 HNB 7.4 45 364 335 Sampath 3.4 35 276 258 Seylan 2.2 20 159 130
No. of Employee SEY SAM HNB COM PB BOC 0 2,000 4,000 6,000 8,000 10,000
External Factors PEST analysis P Government is responsible for protecting the public interest. Political stability affects business decision. Consumer protection. Regulations of business activities. E Competitor activity. Competition for resources. Savings. Unemployment numbers S Work life balance. Trends in consumer behaviors. Leisure & Lifestyle. T Technological arrange is speeding up. Technology develops now products (internet). Improved communication. Internet business.
POLITICAL ANALYSIS • • BOC banking has been sheltered by the regulations and policies made by different governments in the countries where they are working. The company has been able to remain to the policies agreed by each government to make sure that the company will be able to accomplish business operation successfully and effectively. BOC Company also formulates their own defence strategies besides any governmental restrictions and limitations. ECONOMIC ANALYSIS • Being one of the world’s leading and completive businesses in conditions of banking and finance BOC said to have a secure and successful economic strength. In spite of lots of dangers that they meet in many parts of the world, the management of BOC make what they need to be able to go beyond such struggles and to have a better economic condition and create a shield against unemployment. SOCIAL ANALYSIS • BOC is being affected by the circumstances of the society in which they are in use. By the side of this BOC tries harder to make sure that each society is given the same chances to take the benefit of the resources given by the organization. The company adhere to having good name and relations in the society that belong to secure that everything will be customary and under control. TECHNOLOGICAL ANALYSIS • • The urgent situation of information technology, internet and generally the improvement of technology effects how BOC has been working in the past years. The company search for different systems and used internet to get to their costumer all over the world and also help them know the latest trends in the global business. Except from these, the company also uses special facilities which help then to advance their productions and operations and also make them to achieve their goal. Technological breakthroughs can create new industries which might prove a danger to presented organizations. To summarise PEST analysis looks at the business strategies to understand the environment that the company is working and also to take the advantages and benefits to minimize the threats and the dangers for the business.
Porter's Five Force Factors
New Entrance For Industry Threat LOW Profit HIGH Nearly Impossible for new bank to enter the industy and offering the TRUST and the FULL RANGE OF SERVICES.
Power of Buyers POWER HIGH Profit LOW Customer Expecting High Quality Services Customer expecting more profits for their investments. Taxation
Power of Suppliers POWER HIGH Profit LOW Customer Deposits Mortage & Loans Loan from other institutions
Availability of Substitutes Threat LOW Profit HIGH There is no high level threaten from substitute for Banking industries in srilanka. But in future situations will change.. Real Estate, Investments Plan, Stock Market and Companies introducing new easy scheme loans for their customers. Growing local money inflation.
Rivalry Amount Competitors Competition HIGH Profit Average In banking industry competition is very high. There are Nearly 30+ Local and Foreign banks available here. But BOC is unique its won customers heart and trust by standig nearly 60 years with local customers.
• According to porter’s 5 forces factor, BOC profitability and stability is high.
Strategic Group Mapping High People’s Bank Branches BOC Low HNB COM Sam. Sey Deposits High
Stakeholders “Stakeholders are groups or individuals who can affect or be affected by the achievements of a business.”
Stakeholders Mapping High Central Bank Government Management Board Stake & Share Holders Employees Power Policy Markers Local Administrators Former Clients Auditors / Analyzer Students Low Trainees Low Level Staff Charity Foundations Competitors Interest High
Value Chain Primary Value Chain Activities Inbound Logistics Operations Outbound Logistics Marketing & Sales Service
Inbound Logistics include the receiving, warehousing, and inventory control of input materials. Ex : Cash, Stationaries , Computers , Vaults (safe lockers) Operations are the value-creating activities that transform the inputs into the final product. (Loans , Savings , Treasury Bills and bonds , Deposits , Lease , Trade ) Outbound Logistics are the activities required to get the finished product to the customer, including warehousing, order fulfillment, etc. (Atm’s , Branches , Web sites etc…
• Marketing & Sales are those activities associated with getting buyers to purchase the product, including channel selection, advertising, pricing, etc. • (Advertising , special promotions , direct sales , Sponsorships , • Service activities are those that maintain and enhance the product's value including customer support, repair services, etc. CSR
Support Activities Human Resource Management – the activities associated with recruiting, development, and compensation of employees. Firm Infrastructure – includes activities such as finance, legal, quality management, etc.
Support Activities Procurement - the function of purchasing the raw materials and other inputs used in the value-creating activities. Technology Development - includes research and development, process automation, and other technology development used to support the value-chain activities.
Conclusion According my Strategic analysis Bank of Ceylon’s process is stable and high profitable. They have average threat from competitors, but BOC’s brand image and trust is giving advantage for them in competition. If BOC can more familiarized with new technology they can easily win future challenges
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