Term Paper on strategic analysis

STRATEGY STRATEGY ANALY ANALYSIS OF IDLC IDLC FINANCE LIMITED

Curs()  #$%!& Strate'ic Mana'ement Submissi* Da+() (une !", ")!*

Submitted to: Dr. A.K.M. Saiful Majid

Professor  IBA, University of Dhaka

Submitted by: Muhammad Hasibur Rashid Ch!dhur"

Student ID: #R$%&'%''& EMBA, Batch No: !"

Institute of Business Administration University of Dhaka

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(une !", ")!*

Professor Dr A+M A+M Saifu Ma-id .ourse /eacher  Strate'ic Mana'ement 0#$%!&1 Institute of Business Administration University of Dhaka

Subj(,+) L(++(r f Tra*smi++al

Dear Sir, I2ve 3re3ared the term 3a3er tited 4Strate'y Anaysis of ID5. 6inance 5imited7 as 3er the vauabe 'uideines and advice 3rovided by you As an em3oyee of ID5. I am bound to maintain confidentiaity of different issues of the or'ani8ation Moreover, as a non$bankin' financia institute ID5. has to com3y 9ith immense rues and re'uations 9hich restrict the avaiabiity of data Des3ite the facts I have tried to make the re3ort etensive as much as  3ossibe

Pre3arin' this 3a3er he3s me a ot to 'et e3osure of strate'ic mana'ement issues 9ith  3ractica situation I am 3ersonay thankfu to you for 'ivin' me such an o33ortunity and aso 3rovidin' your thou'htfu 'uideines to 3re3are this re3ort

6or any additiona information information or assistance assistance a3art from this re3ort if re;uired re;uired so, 3ease contact me at hasib>)!?@)@!!*

Sincerey yours,

       Muhammad Casibur ashid .ho9dhury o No: $!")!))" EMBA !" th Batch, IBA F

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(une !", ")!*

Professor Dr A+M A+M Saifu Ma-id .ourse /eacher  Strate'ic Mana'ement 0#$%!&1 Institute of Business Administration University of Dhaka

Subj(,+) L(++(r f Tra*smi++al

Dear Sir, I2ve 3re3ared the term 3a3er tited 4Strate'y Anaysis of ID5. 6inance 5imited7 as 3er the vauabe 'uideines and advice 3rovided by you As an em3oyee of ID5. I am bound to maintain confidentiaity of different issues of the or'ani8ation Moreover, as a non$bankin' financia institute ID5. has to com3y 9ith immense rues and re'uations 9hich restrict the avaiabiity of data Des3ite the facts I have tried to make the re3ort etensive as much as  3ossibe

Pre3arin' this 3a3er he3s me a ot to 'et e3osure of strate'ic mana'ement issues 9ith  3ractica situation I am 3ersonay thankfu to you for 'ivin' me such an o33ortunity and aso 3rovidin' your thou'htfu 'uideines to 3re3are this re3ort

6or any additiona information information or assistance assistance a3art from this re3ort if re;uired re;uired so, 3ease contact me at hasib>)!?@)@!!*

Sincerey yours,

       Muhammad Casibur ashid .ho9dhury o No: $!")!))" EMBA !" th Batch, IBA F

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f  ACKNO-L-DGEMENT

/his re3ort is 3re3ared as 3er the re;uirements of the Strate'ic Mana'ement 0#$%!&1 course course under under the Eecut Eecutive ive MBA 3ro'ram 3ro'ram of IBA IBA /o 3rovid 3rovidee this this o33ort o33ortuni unity ty and thou'htfu 'uideines I am 'ratefu to the course teacher Professor Dr A+M A+M Saifu Ma-id sir I 9oud aso ike to thank some coea'ues 9ho have etended their coo3eration to me for   3re3arin' this mammoth task I 9oud ike to thank Mr Mir /ari;u88aman, /ari;u88aman, FM G ./H 0I/1 9hom I have consutant consutant severa times times on different issues issues I 9oud aso ike ike to thank  Ms Bi;uis (ahan, DFM G Cead of C for her 3atience and time she had 3rovided to me

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Tabl( f C*+(*+s Eecutive Summaryi .ha3ter !: Introduction ..................................................... ..................................................................................................................... ................................................................ 10

.................................................................................................................... .................................................................... ............ ... 10 ! Introduction ......................................................... !!

Hri'in of the e3ort........................................................ ............................................................................................. .............................................. ................ ....... 10

!" Hb-ective ....................................................... ........................................................................................................................ .......................................................................... ......... 10

...................................................................................................................... .......................................................................... ................. 10 !@ Sco3e........................................................... !* Methodoo'y.......................................................... ..................................................................................................................... ................................................................... ........ 11

............................................................................................................................. ...................................................................... .. 11 !& 5imitations......................................................... .ha3ter ": .om3any Profie J ID5. 6inance 5imited ...............................................................................12 "! ID5. at a Fance .................................................. .......................................................................................................... ................................................................. ............. .... 12

................................................................................................................. ......................................................... 12 "" Sharehodin' Structure ........................................................ "@ Hr'ani8ationa Cierarchy ....................................................... .............................................................................................................. ....................................................... 13 "* Products and Services .......................................................... .................................................................................................................. ........................................................ 14 "*! 6or 5ar'e 5oca and Mutinationa .or3orate Couses .....................................................................14 "*" 6or Sma and Medium Enter3rises ............................................................................................14 "*@ 6or etai .ients.................................................... ......................................................................................................... ............................................................. ........ 15

...................................................................................................... ................................................... 15 "** 6or .a3ita Market .ients ................................................... "& Board of Directors.......................................................... .................................................................................................................. ............................................................ .... 15 "% Mana'ement .ommittee ................................................... ............................................................................................................... ............................................................ 16

................................................................................................................... ..................................................................... .......... 17 "? Membershi3s ........................................................ "> +ey 6inancias:......................................................... .......................................................................................................................... ................................................................. 17

......................................................................................................... ................................................ ......... 19 " Feo'ra3hic .overa'e ......................................................... .ha3ter @: Hr'ani8ationa Strate'y Anaysis J ID5. 6inance 5imited ............................................................20 @! .ritica Anaysis of Strate'y Makin' Cierarchy of ID5. .......................................................................20

................................................................................................................... ..................................................................... ..... 21 @" Kision Statement ................................................... @"! .ritica Anaysis of ID5.2s Kision Statement ...............................................................................21 @@ Mission Statement..................................................... ............................................................................................................... ................................................................. ....... 22 @@! .ritica Anaysis of ID5.2s Mission Statement .............................................................................22 @* Strate'ic Hb-ectives Hb-ectives.................................................... ......................................................................................................... ............................................................... ............ 23

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@& .ore vaues ........................................................ ................................................................................................................... ....................................................................... ............ 23

................................................................................ .................................... ............ ... 24 @ % Em3oyee .ode of .onduct and Ethics ..................................................... .ha3ter *: Strate'ic Frou3 Ma33in' ...................................................... ..................................................................................................... ............................................... 25

.............................................................................................................. ....................................................... 25 *! Strate'ic Frou3 Ma33in' ....................................................... .......................................................................................................... ........................................................ 27 *" Anaysis of Strate'ic Frou3s .................................................. *@ Basic and com3ementary strate'ies desi'ned and bein' im3emented to match market situations .....................32

............................................................................................................. ........................................................... .. 32 *@! .or3orate Business .................................................... *@" Sma and Medium Business ..................................................... .................................................................................................... ............................................... 33 *@@ .onsumer Business ...................................................... ................................................................................................................. ............................................................. .. 33 .ha3ter &: Environmenta 6actors Anaysis ............................................................................................34 &! PES/E5 Anaysis........................................................... ...................................................................................................................... ............................................................. 34

.................................................................................................... .............................................. .... 34 &!! PH5I/I.A5 6A./HS:.......................................................... ........................................................................................ .......................................... ............... ...... 34 &!" E.HNHMI. 6A./HS:....................................................... &!@ SH.IH$.U5/UA5 6A./HS:.......................................................... ......................................................................... ......................... ................... ........... 35 &!* /E.CNH5HFI.A5 6A./HS:..............................................................................................35 &!& ENKIHNMEN/A5 6A./HS:....................................................... ........................................................................... ............................. .................. ......... 36 &!% 5EFA5 6A./HS:.................................................. .............................................................................................................. ............................................................ 37

............................................................................................. ......................................... ..... 37 &" 6ive$6orces Mode of .om3etition ......................................................... &"! .om3etition amon' iva .om3anies ....................................................... .......................................................................... ............................ .............. ..... 39 &"" /hreats of Ne9 Entrants ................................................... ......................................................................................................... ...................................................... 40

.............................................................................................. .................................................... ................. ........ 40 &"@ Po9er of Su33iers ................................................... &"* Bar'ainin' Po9er of .ient Frou3s ...........................................................................................40 &"& .om3etitive Pressure from Substitute Products .............................................................................41

............................................................................................................. ............................................................ ... 42 .ha3ter %: S#H/ Anaysis .................................................... %! S#H/ Anaysis ...................................................... .................................................................................................................... ................................................................... ..... 42 .ha3ter ?: Anaysis on Hvera Bankin' Industry .....................................................................................43

7.1 Industry Industry Life Cycle....................................... Cycle...................................................................................................... ........................................................................ ......... 43 ?!! .ountry2s /ota credit 'ro9th J a banks ....................................................................................43

........................................................................................ ........................................... ...... 44 ?!" .ountry2s /ota De3osits Fro9th ................................................... 7.1.3 Country2s Hvera E3ort 'ro9th ........................................................ ................................................................................... .................................... ......... 44 7.1.4 Country2s Im3ort Scenario ......................................................... ........................................................................................... ........................................... ......... 45 7.1.5 GDP ector!l Gro"t# Gro"t# r!te in $...................................................................................... 45

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?" Dominant /raits of the Industry ...................................................................................................... 46 ?@ Drivers of Industry .han'e ........................................................................................................... 4% ?* +ey Success 6actors .................................................................................................................... 49 .ha3ter >: ecommendations and .oncusion .........................................................................................50

%! ecommendations and .oncusion .................................................................................................. 50

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E(,u+i/( Summar" ID5. 6inance 5imited is one of the eadin' non$bank financia institutions in Ban'adesh Estabished in !>& as the 3ioneerin' easin' com3any in Ban'adesh, ID5. no9 offers a 9ide ran'e of 3roducts ran'in' from .or3orate 6inance, SME 6inance, .onsumer  6inance, to .a3ita Market soutions, throu'h its 3resence across the country 9ith "%  branches and over %)) 3ermanent em3oyees Hver the year, ID5. has deveo3ed a stron' strate'ic mana'ement 3rocess that ceary dictates or'ani8ationa 3oicy$makin', strate'y deveo3ment G eecution, and overa or'ani8ationa mana'ement in an efficient manner

Both ID5.2s Board of Directors and to3 mana'ement 3ersonne are inte'ray invoved in eadin' this strate'ic mana'ement 3rocess in the most efficient manner by ensurin' a 'ood strate'ic 3an for the or'ani8ation, remainin' u3dated on or'ani8ationa and industry scenario, 3uttin' constructive 3ressure to achieve desired outcomes, takin' corrective measures for better strate'ic mana'ement, deveo3in' stron'er com3etencies and ca3abiities, and 3ortrayin' stron' cor3orate 'overnance, ethics and .S

ID5. has a9ays been 9e$re'arded in the financia sector of Ban'adesh for its cor3orate 'overnance 3ractices, ethica inte'rity and trans3arency Maintenance of an effective .or3orate Fovernance 3rocess remains a key 3riority of the Board of ID5. Moreover, ID5. has a stron' Cuman esource mana'ement system in 3ace that focuses on key areas such as maintainin' a favorabe 9ork environment by embracin' diversity and incusionL eercisin' non$discrimination and maintainin' 'ender baance across a s3heres of ID5.L 3rovidin' o33ortunities to em3oyees and fresh 'raduates for both their 3ersona and 3rofessiona deveo3ment in the form of trainin' 3ro'rams, -ob rotation, succession  3annin' and internshi3 o33ortunitiesL ensurin' heath and safety standards across a  branches of the ID5. Frou3 9hie offerin' ma-or benefit schemes and com3any contributions to em3oyeesL and he3in' em3oyees maintain 3ro3er 9ork$ife baance throu'hout their stay at ID5. /hese 3ractices he3 ID5. attract and retain the best  3rofessionas in the industry

Based on the strate'ies ado3ted by its com3etitors and chan'in' market scenario across different business se'ments, ID5.2s business units aso differ from one another in terms of 

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core strate'ies and focus areas In res3onse to a more mature market, ID5.2s .or3orate  business is mainy focused on service ;uaity and efficiency, hi'her ticket si8e, and im3roved 3ortfoio ;uaity, 9hie its SME business is more focused on ra3id 3roduct innovation and increased 3resence throu'h e3anded 'eo'ra3hic covera'e to evera'e the most from the fast$'ro9in' SME sector in Ban'adesh

/he ma-or factors of ID5.2s eterna, and immediate industry and com3etitive environment, and their subse;uent infuence on its o3erations, have been identified throu'h PES/E5 anaysis and Porter2s 6ive 6orces Mode of .om3etition 4PES/E57 anaysis reveas ma-or 3oitica, economic, socio$cutura, technoo'ica, environmenta and e'a factors that infuence ID5.2s 3erformance and strate'ic decisions Ma-or factors incude, but are not imited to, bud'etary measures and various 3oicies and re'uatory measures by the Fovernment and Ban'adesh BankL chan'in' demo'ra3hics of the  3o3uationL 'reater reiance on technoo'y to offer more customi8ed financia soutions and better services

4/he 6ive 6orces Mode of .om3etition7 reveas stron' market com3etition and rivary in the industry, o9 threats of ne9 entrants due to hi'h re'uatory restrictions, hi'h  bar'ainin' 3o9er of both industry su33iers and customers due to intense com3etition amon' riva com3anies and com3etin' 3roduct offerin's, and amost 8ero threat from substitute 3roducts from another industry S#H/ Anaysis of ID5. reveas its core stren'ths in the areas of effective strate'ic decision$makin' and eecution, stron' cor3orate 'overnance, com3etent mana'ement team, stron' financias, diversified 3roduct 3ortfoio and a 3resti'ious customer base,  3rofessiona 9orkforce combined 9ith stron' C Mana'ement, stron' technoo'y  3atform, su3erior customer service, and 'ro9in' .S commitment, thus eadin' to a stron' brand ima'e

In i'ht of the above anaysis, 9e may safey concude that ID5. hods a stron' 3osition in the bankin' and financia services sector of Ban'adesh By focusin' more on baanced strate'ic ob-ectivesL stron' mana'ement eadin' to efficient strate'y deveo3ment and eecutionL revisin' business modes and strate'ies in a timey manner 9i 3rovide better  resuts and com3etitive advanta'e

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Cha0+(r %) I*+rdu,+i* % I*+rdu,+i* In this re3ort 9e 9i anay8e the strate'y of ID5. 6inance 5imited in terms of various  3arameters /hose 3arameters are com3any2s current strate'ies, 9hat is the strate'ic 'rou3, their im3act of the different environmenta factors such as five forces, PES/E5 #e 9i aso 'o throu'h the detai anaysis on S#H/ of ID5.

%.% Ori1i* f +h( R(0r+ As 3art of our Strate'ic Mana'ement course of Eecutive MBA 3ro'ram, our honorabe teacher Professor Dr Saifu Ma-id has 'iven us an assi'nment to 3erform an anaysis on the strate'ic mana'ement 3rocess of my o9n com3any and recommend course of actions to stren'then in i'ht of the earnin' from the course As 3er our teacher2s instruction 9e have made this re3ort

%.& Obj(,+i/( Hur main ob-ective is to anay8e the strate'y im3emented by ID5. both basic and com3ementary, it2s strate'ic 'rou3s, different eterna factors such as five forces, PES/E5, S#H/, bankin' industry ife cyce, dominant traits of the 9hoe industry, key success factors and finay come u3 9ith recommendations so that ID5. 6inance 5imited can do even better in the com3etitive market

%.2 S,0( /he re3ort attem3ts to anay8e the strate'ic mana'ement 3rocess of ID5. 6inance 5imited, focusin' on ID5.2s strate'ic ob-ectives, 3oices and 'uideines deveo3ed and eecuted by its Board and Mana'ement, and foo9ed by its staff /o identify ID5.2s com3etition market 3osition and ma-or o33ortunities for the future, and accordin'y recommend re;uired measures, a number of strate'ic mana'ement toos 9ere a33ied, incudin' detaied anaysis of ID5.2s vision, mission and strate'ic ob-ectivesL strate'ic 'rou3 ma33in' of ID5.L PES/E5 anaysis and a33yin' Porter2s 6ive 6orces Mode of  .om3etition to hi'hi'ht infuence of ma-or factors reated to ID5.2s eterna

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environment and immediate industry and com3etitive environmentL and S#H/ Anaysis of ID5. Accordin'y recommendations have been 3rovided in this re3ort that may contribute to further 'ro9th and im3rovement of ID5.

%.3 M(+hdl1" /he re3ort has been 3re3ared by revie9in' various 3oicies, 'uideines and re3orts of  ID5. Moreover, references have been made from ID5.2s Annua 6inancia e3ort and Annua Sustainabiity e3ort, 9hie key 3ersonne from .or3orate, SME, .onsumer, .a3ita Markets and Cuman esources 9ere intervie9ed for their o3inion on various issues reated to ID5.2s strate'ic mana'ement 3rocess

%.4 Limi+a+i*s Due to confidentiaity and sensitivity of certain information, detaied strate'ies, 3oicies and 'uideines coud not be encosed 9ith this re3ort

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Cha0+(r &) Cm0a*" 5rfil( 6 IDLC Fi*a*,( Limi+(d &.% IDLC a+ a Gla*,( ID5. 6inance 5imited, Ban'adesh2s 3ioneerin' easin' com3any, 9as estabished in Dhaka in !>& ID5. 9as formed throu'h the coaboration of Internationa 6inance .or3oration 0I6.1, Ferman Investment and Deveo3ment .om3any 0DEF1, +ookmin Bank, +orea Deveo3ment 6inancin' .or3oration, /he A'a +han 6und for Economic Deveo3ment, /he .ity Bank 5imited, IPD. of Ban'adesh 5imited and Sadharan Bima .or3oration /oday, ID5. 6inance is the eadin' muti$3roduct Non$Bankin' 6inancia Institution in Ban'adesh 9ith "% branches and " SME booths, and over %)) 3ermanent staff across the Frou3 ID5. offers a 9ide ran'e of oan and de3osit 3roducts to its .or3orate, .onsumer and SME cient se'ments, 9hie o3eratin' in the .a3ita Markets throu'h its t9o 9hoy$ o9ned subsidiaries J ID5. Investments 5imited, 3rovidin' Merchant Bankin' services, and ID5. Securities 5imited, 3rovidin' Brokera'e services /he ID5. Frou3 has a9ays been a standard bearer for the financia sector in terms of cor3orate 'overnance, statutory com3iance and ethica business 3ractices /he Frou3 is aso hi'hy re'arded for its 3rofessiona 3oo of resources and 3ro'ressive 9ork environment

&.& Shar(hldi*1 S+ru,+ur(

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&.2 Or1a*i7a+i*al Hi(rar,h"

C+'  /!n!in Director D/D

sst. /!n! er

G/

r. +,ec. '(cer

DG/

+,ecut i-e '(cer

/!n!eri!l ier!rc#y

G/

r. /!n! er

Pro*. '(cer

on /!n!eri!l ier!rc#y

enior '(cer

/!n! er

'(cer

sst. /!n! er

u))o rt '(cer

/t.  r!ine e

 &unior '(cer

12 of 45

&.3 5rdu,+s a*d S(r/i,(s ID5. has etensive kno9ed'e, e3ertise and e3erience to offer a ran'e of financia soutions in res3onse to the needs of a broad s3ectrum of cientee /hese are discussed in the foo9in' sections:

2.4.1 For Large Local and Multinational Corporate Houses ID5. has many some 3roducts for the ar'e oca and mutinationa cor3orate houses such as:

     

/erm 5oan 5ease 6inance #orkin' .a3ita 6inance Pro-ect 6inance efinancin' and S3ecia 6unds .or3orate Advisory Services

S+ru,+ur(d Fi*a*,( di/isi* ff(rs +h( fll!i*1 Slu+i*s)

      

6und$raisin' throu'h 5oan5easePrivate Pacement of E;uityPreference SharesBond 6orei'n$currency 5oanefinancin' of S3ecia 6unds Pro-ectInfrastructure 6inance Advisory Services Securiti8ation of Assets Structured Soutions

2.4.2 For Small and Medium Enterprises Small E*+(r0ris( Fi*a*,( i* +h( frms f)

    

SME 5oan Abashan 5oan Seasona 5oan evovin' ShortJterm 5oan SME Sacha 5oan

M(dium E*+(r0ris( Fi*a*,( i* +h( frms f)

    

/erm 5oan 5ease 6inance #orkin' .a3ita 6inance Pro-ect 6inance S3eciai8ed Products

O+h(r fa,ili+i(s i*,lud()



Su33ier 6inance

13 of 45

 

#omen Entre3reneur 5oan .ommercia Kehice 5oan

2.4.3 For Retail Clients 

De3osit Schemes 0.umuative /erm De3osit, MonthyuarteryAnnua Earner De3osit, Doube/ri3e Money De3osit, Short$term De3osit1

  

Come 5oan .ar 5oan Persona 5oan

2.4.4 For Capital Market Clients 

Portfoio Mana'ement 0MAO.AP $ Discretionary Portfoio Mana'ement kno9n as MAO.AP, .a3 Invest $ Mar'in 5endin'1



Investment Bankin' 0IPH, PH, Bond Issuance, i'hts Shares Hfferin', .or3orate Advisory etc1

 

esearch Brokera'e Services

&.4 8ard f Dir(,+rs /he Board of ID5. com3rises of eeven Non$eecutive Directors, incudin' t9o Inde3endent Directors, and one Eecutive Director, ie the .EH and Mana'in' Director of ID5.: ! Mr An9aru Cu;, .hairman$nominated by eiance Insurance 5imited " Mr ube A8i8, Director$nominated by /he .ity Bank 5imited @ Mr Md +amru Cassan, Director$nominated by /ranscom Frou3 of .om3anies * Mr A8i8 A +aiser, Director$nominated by /he .ity Bank 5imited & Mr Cossain Mehmood, Director$nominated by /he .ity Bank 5imited % Mrs Meherun Ca;ue, Director$nominated by /he .ity Bank 5imited ? Mr +a8i Mahmood Sattar, Director$nominated by /he .ity Bank 5imited > Mr Md e8au +arim, Director$nominated by Sadharan Bima .or3oration 0SB.1  Aha- Akram Cussain 0Cumayun1, Director$nominated by Mercantie Bank  5imited

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!) Mr 6aroo; Sobhan, Inde3endent Director  !! Mr Syed Abu Naser Bukhtear Ahmed, Inde3endent Director  !" Mr Seim  6 Cussain, E$Hfficio A Non$eecutive Directors, other than the Inde3endent Directors, are nominated by their res3ective or'ani8ations, and the eected Directors nominate t9o Inde3endent Directors for the Board /he Directors are then a33ointed by the sharehoders in the Annua Fenera Meetin' 0AFM1 /he .EH and Mana'in' Director of ID5. is aso a33ointed by the Board sub-ect to consent of the sharehoders in the AFM Any chan'e in the Board members re;uires intimation to the Ban'adesh Bank, a schedued banks and financia institutions, Ban'adesh Securities and Echan'e .ommission 0BSE.1, and stock echan'es

&.9 Ma*a1(m(*+ Cmmi++(( 

Mr Seim 6 Cussain, .EH and Mana'in' Director



Mr CM iau Co;ue +han, De3uty Mana'in' Director 



Mr Asif Saad Bin Shams, FM and Cead of .redit and .oection



Mr M (ama Uddin, FM and Cead of .or3orate and Structured 6inance



Mr ahid Ibne Cai, FM and Cead of SME Division



Mr Irte8a A +han, DFM and Cead of .onsumer Division



Ms Bi;uis (ahan, DFM and Cead of Cuman esources



Mr Mir /ari;u88aman, FM and .hief /echnoo'y Hfficer



Mr M Ataur ahman .ho9dhury, AFM and Cead of H3erations



Mr Musta; Ahammed, AFM and Cead of Interna .ontro and .om3iance





Mr Md Moniru88aman, Mana'in' Director, ID5. Investments 5imited 0subsidiary1, and Mr Md Saifuddin, Mana'in' Director, ID5. Securities 5imited 0subsidiary1

15 of 45

&.: M(mb(rshi0s Ass,ia+i*

Ban'adesh 5easin' and 6inance .om3anies Association  Asian 6inancia Services Association  Ban'adesh Merchant Bankers Association  Ban'adesh Association of Pubicy 5isted .om3anies I*s+i+u+(

/he Institute of Bankers, Ban'adesh Chamb(rs f Cmm(r,( a*d I*dus+r"

Internationa .hamber of .ommerce J Ban'adesh  Metro3oitan .hamber of .ommerce and Industry  Dhaka .hamber of .ommerce and Industry  Ban'adesh Ferman .hamber of .ommerce and Industry  /he 6ederation of Ban'adesh .hambers of .ommerce and Industry I*+(r*a+i*al M(mb(rshi0s

Internationa 6actors Frou3 0I6F1 $ an internationa association of factorin' com3anies  Sma Business Bankin' Net9ork 0SBBN1 $ a 'oba initiative to im3rove access to financia services by sma businesses Sus+ai*abili+" M(mb(rshi0s

United Nations Foba .om3act  United Nations Environment Pro'ramme 6inance Initiative  .S .entre of Ban'adesh

&.; K(" Fi*a*,ials)

16 of 45

17 of 45

&.< G(1ra0hi, C/(ra1(

1% of 45

Cha0+(r 2) Or1a*i7a+i*al S+ra+(1" A*al"sis 6 IDLC Fi*a*,( Limi+(d 2.% Cri+i,al A*al"sis f S+ra+(1" Ma=i*1 Hi(rar,h" f IDLC

Cr0ra+( S+ra+(1" Across the ID5. Frou3, ie, ID5. 6inance 5imited, and its t9o subsidiaries, ID5.I5 and ID5.S5

Deveo3ed by the Board of Directors, and the .EH and Mana'in' Director of ID5.

8usi*(ss S+ra+(1" Deveo3ed for each individua business activity of the com3any, namey .or3orate, SME, .onsumer and .a3ita Market H3erations

Deveo3ed by the Cead of different Business 5ines, in consutation 9ith 6unctiona Ceads

Fu*,+i*al S+ra+(1" Deveo3in' s3ecific strate'ies and ob-ectives for each individua functions under ma-or Business areas, in ine 9ith the or'ani8ation2s overa .or3orate Strate'y

Deveo3ed by the 6unctiona Ceads, in coaboration 9ith key com3any 3ersonne

O0(ra+i*1 S+ra+(1"

Deveo3ed by Mana'ers of ma-or 'eo'ra3hic units G strate'icay im3ortant activities, such as human resource mana'ement, marketin' G 3romotion etc

/hese strate'ies com3ete the eecution and achievement of ma-or Business and 6unctiona strate'ies, 9hie 3rovide a basis for mana'in' do9n$the$adder activities

19 of 45

2.& >isi* S+a+(m(*+ #e 9i be the best financia brand in the country

3.2.1 Critical Analsis o! "#LC$s %ision Statement  ID5.2s vision statement contains the foo9in' characteristics of a 'ood vision statement: Gra0hi,) /he vision statement 'ives a cear indication that the mana'ement of ID5. is tryin' to deveo3 a com3any that 3rovides the best financia services, 9hie hodin' the eadin' market 3osition in the financia sector of Ban'adesh

Fl(ibl() /he statement is feibe, 'ivin' mana'ement to o3tion to chan'e their strate'ic course in res3onse to evovin' 3roduct, market or technoo'ica situations, to become the best financia brand in the country

Feasible:  #e -ision st!teent s#o"s ! )osition t#!t IDLC c!n e,)ect to !c#ie-e in t#e future "it# c!refully cr!fted str!teies follo"ed *y )ro)er !nd tiely e,ecution.

D(sirabl() /he direction 3rovided to the com3any by the vision statement is desirabe to ID5.2s stakehoders2 in the on' run, since it sho9s better returns in future

Eas" + ,mmu*i,a+()  /he vision statement is very easy to communicate, since it is brief, 3recise and memorabe

In s3ite of the above characteristics, the vision statement aso has some ma-or shortcomin's that shoud be addressed: 

N+ + f,us(d) /he vision statement does not 3rovide a s3ecific tan'ibe 'oa to the mana'ement to set their strate'ies and aocate resources accordin'y Aso it does not indicate 9hat the com3any is doin' to 3re3are for the future

20 of 45





N+ dis+i*,+i/() /he vision statement fais to create a uni;ue identity for ID5. It coud be a33icabe to any other riva com3any com3etin' in the industry T r(lia*+ * su0(rla+i/(s)  /he vision statement ony states that ID5. desires to be the 4Best 6inancia Brand7 in countryL ho9ever, it does not indicate any s3ecific strate'ic course of the com3any

Cence it can be safey 3resumed that ID5.2s vision is a moderatey 9e$drafted statement, athou'h there is room for much im3rovement

2.2 Missi* S+a+(m(*+ #e 9i focus on ;uaity 'ro9th, su3erior customer e3erience and sustainabe business  3ractices

Quality Growth

Superior Customer Experience

Sustainable Business Practices

3.3.1 Critical Analsis o! "#LC$s Mission Statement /he mission statement of ID5. ceary s3ecifies the areas the com3any 9i focus on to achieve its vision of becomin' the best financia brand in the country It s3ecificay mentions: 

Stakehoder desire of 4uaity 'ro9th7,



.ustomer desire of 4Su3erior customer e3erience7, and



.ore ob-ective of ID5.2s eistence and o3eration, that is, 4Sustainabe business  3ractices7

In that re'ard, it is a fairy effective mission statement

21 of 45

2.3 S+ra+(1i, Obj(,+i/(s /he strate'ic ob-ectives of a com3any serve as the 3erformance tar'ets, that is, resuts and outcomes desirabe by the com3any mana'ement Usuay such ob-ectives are set to ensure that the com3any at its fu 3otentia and deivers the best 3ossibe resuts to 9ork to9ards achievin' its vision /he strate'ic ob-ectives for ID5. incude: 

Fro9 and deveo3 our taent 3ooL



6uy evera'e ne9 core bankin' 3atformL



H3timi8e distribution 3ointsL



Fro9 and diversify fundin' sourcesL



Fro9 saes and service ca3abiities in .onsumer DivisionL



A''ressivey 'ro9 SME 3ortfoioL



6ocus on to3$tier cients in .or3orateL



.onsoidate ca3ita market o3erations and enhance ca3abiitiesL

2.4 Cr( /alu(s /he core vaues of ID5. 3ortrays the beiefs, traits and behaviora norms its em3oyees are e3ected to dis3ay in carryin' out their daiy res3onsibiities and 3ursuin' the com3any2s strate'ic vision and strate'ies /he core vaues of ID5. com3rise of seven behaviora attributes e3ected from its em3oyees:

22 of 45

Inte'rit y Simplici ty

Passion

Custom er Focus

Core Values of  I!C

Eco( frien)ly

$rust % &espect

E"ual #pportu nity

2. 9 Em0l"(( Cd( f C*du,+ a*d E+hi,s IDLC (m0l"((s shall) 



Act 9ith inte'rity, com3etence, di'nity and in an ethica manner 9hen deain' 9ith customers,  3ros3ects, coea'ues, a'encies and 3ubicL Act and encoura'e others to behave in a 3rofessiona and ethica manner that 9i refect  3ositivey on ID5. em3oyees, their 3rofession and on ID5., at ar'eL



Strive to maintain and im3rove the com3etence of a in the businessL



Use reasonabe care and eercise inde3endent 3rofessiona -ud'mentL



 Not restrain others from 3erformin' their 3rofessiona obi'ationsL



Maintain kno9ed'e of and com3y 9ith a a33icabe a9s, rues and re'uationsL



Discose a conficts of interestL





Deiver 3rofessiona services in accordance 9ith ID5. 3oicies and reevant technica and  3rofessiona standardsL es3ect the confidentiaity and 3rivacy of customers, 3eo3e and others 9ith 9hom they do  businessL and

23 of 45

Cha0+(r 3) S+ra+(1i, Gru0 Ma00i*1 3.% S+ra+(1i, Gru0 Ma00i*1 4Strate'ic Frou3 Ma33in'7 is a conce3t used in strate'ic mana'ement that 'rou3s com3anies 9ithin an industry that have simiar business modes or simiar combinations of  strate'ies Such 'rou3in' aims to identify or'ani8ations 9ith simiar strate'ic characteristics, foo9in' simiar strate'ies, or com3etin' on simiar bases /his aso he3s the or'ani8ation identify its 3osition, in res3ect to its main com3etitors, 9ithin the industry Strate'ic Frou3 Ma33in' deivers the foo9in' benefits to an or'ani8ation: 

It he3s a com3any identify its direct and indirect com3etitors, andor 3ossibe 3artners 9ithin the industryL



It iustrates the ease or difficuty of movin' from one strate'ic 'rou3 to anotherL



It often he3s identify future o33ortunities andor strate'ic 3robems to the com3anyL and



It ensures the com3any takes into account vie9s of its ma-or stakehoders 9hie deveo3in' or assessin' its strate'iesL

In consideration of the vaue chain com3onents of the bankin' and financia sectors industry, ID5.2s cose com3etitors incude a combination of the foo9in' banks and  NB6Is:

Or1a*i7a+i*

T"0(

BA. Bank 5imited

Bank 

/he .ity Bank 5imited

Bank

Eastern Bank 5imited

Bank

IPD. of Ban'adesh 5imited

NB6I

United 5easin' .om3any 5imited

NB6I

Uttara 6inance and Investments 5imited

NB6I

/he reative 3ositions of ID5. in terms of its key financias have been 3rovided beo9:

24 of 45

8a*=?N8FI

BA. Bank 5imited /he .ity Bank 5imited Eastern Bank 5imited IDLC Fi*a*,( Limi+(d

IPD. of Ban'adesh 5imited United 5easin' .om3any 5imited Uttara 6inance and Investments 5imited

T+al Ass(+s

O0(ra+i*1 I*,m(

5rfi+ af+(r Ta

N5L Ra+i

!>),@%

&,*)%

?))

!)))

!@),@!*

*,%")

?*

?*>

!*?,)**

&,?@!

",@@

@!?

2:@:;3

&@3'2

:%2

!%@

?,!!&

")>

!"

@>

!!,>!?

@>*

""

@&)

!,@%&

!,!*"

>!&

")

.om3arative 3osition based on /ota assets 0in BD/ Miion1 and NP5 ratio:

25 of 45

3.& A*al"sis f S+ra+(1i, Gru0s /he number of 'rou3s 9ithin an industry and their com3osition de3ends on the dimensions used to define the 'rou3s 6or ID5., the foo9in' characteristics 9ere considered as the bases of com3etition 9ith its immediate 3eer banks and NB6Is:



Product and Service Diversity



Feo'ra3hic .overa'e



Market Se'ments Served



Brand Ima'e and investments in Marketin' .ommunications



Product and Service uaity, and



Pricin' Poicy

In i'ht of the above, the foo9in' tabes summari8e the com3arative 3osition and stren'th of com3etition amon' ID5., BA. Bank 5imited 0BA.1, /he .ity Bank 5imited 0.B51, Eastern Bank 5imited 0EB51, IPD. of Ban'adesh 5imited 0IPD.1, United 5easin' .om3any 5imited 0U5.1 and Uttara 6inance and Investments 5imited 0U6I51

/abe ! $ .om3arison of Strate'ic issues 0Products, covera'e and market se'ments1

Or1a*i7a+i*s

5rdu,+ a*d S(r/i,( Di/(rsi+"

G(1ra0hi, C/(ra1(

Mar=(+ S(1m(*+s S(r/(d

IDLC

#ide ran'e of 3roducts offered under .or3orate, .onsumer 0De3osit and 5oan 3roducts1, SME and .a3ita Markets se'ments

"% branches and " saes centres across Dhaka, .hitta'on', Syhet, Bo'ra, .omia and (essore re'ions

.aters to oca and mutinationa cor3orate housesL sma and medium enter3rises 0ecudin' micro enter3rises1L individua de3osit cientsL individua  borro9ers of .onsumer oan  3roductsL ca3ita market investorsL and NB cients

26 of 45

8RAC 8a*= 

#ide ran'e of 3roducts offered under .or3orate, .onsumer 0De3osit and 5oan 3roducts1 and SME Bankin' se'ments

Much 9ider 'eo'ra3hic covera'e 9ith over !))  branches across Dhaka, .hitta'on', +huna, (essore, a-shahi, an'3ur  and Syhet re'ions

.aters to oca and mutinationa cor3orate housesL micro, sma and medium enter3risesL individua de3osit cientsL individua borro9ers of .onsumer oan 3roductsL and  NB cients Cence BA. is a direct com3etition for ID5. across these market se'ments

Ci+" 8a*= 

Eas+(r* 8a*= 

Cence BA. is a direct com3etition for ID5. in terms of 3roduct offerin's

Cence BA. is in a much  better com3etitive 3osition com3ared to ID5. in terms of 'eo'ra3hic covera'e

#ide ran'e of 3roducts offered under .or3orate, .onsumer 0De3osit and 5oan 3roducts1, SME and Isamic Bankin' se'ments

Much 9ider 'eo'ra3hic covera'e 9ith around !))  branches across Dhaka, .hitta'on', Syhet, +huna, a-shahi, .omia, an'3ur and Barisha re'ions

.aters to oca and mutinationa cor3orate housesL micro, sma and medium enter3risesL individua de3osit cientsL individua borro9ers of .onsumer oan 3roductsL and  NB cients

Cence .B5 is a direct com3etition for ID5. in terms of 3roduct offerin's

Cence .B5 is in a much  better com3etitive 3osition com3ared to ID5. in terms of 'eo'ra3hic covera'e

Cence .B5 is a direct com3etition for ID5. across these market se'ments

#ide ran'e of 3roducts offered under .or3orate, .onsumer 0De3osit and 5oan 3roducts1, SME and Investment Bankin' se'ments

Much 9ider 'eo'ra3hic covera'e 9ith over ?)  branches across Dhaka, .hitta'on', Syhet, +huna, a-shahi, an'3ur  and Barisha re'ions

.aters to oca and mutinationa cor3orate housesL sma and medium enter3rises 0ecudin' micro enter3rises1L individua de3osit cientsL individua  borro9ers of .onsumer oan  3roductsL ca3ita market investorsL and NB cients

Cence EB5 is a direct com3etition for ID5. in terms of 3roduct offerin's

Cence EB5 is in a much  better com3etitive 3osition com3ared to ID5. in terms of 'eo'ra3hic covera'e

Cence EB5 is a direct com3etition for ID5. across these market se'ments

27 of 45

I5DC

LC

FIL

Seect 3roducts offered under .or3orate and .onsumer 0De3osit and 5oan 3roducts1 se'ments

& branches ocated in Dhaka, .hitta'on' and Syhet

.aters to seect cients se'ments such as oca and mutinationa cor3orate houses, and individua de3ositors and .onsumer oan cients

Cence ID5. is in a much stron'er 3osition in terms of its 3roduct and service  3ortfoio com3ared to IPD.

Cence ID5. is in a much stron'er 3osition com3ared to IPD. in terms of its 'eo'ra3hic covera'e

Cence IPD. com3etes 9ith ID5. ony in these seect market se'ments

Seect 3roducts offered under .or3orate 6inance 0ony Syndication and ease faciities1, SME 6inance 0ony Su33ier 6inance faciities1, and .onsumer 0De3osit and 5oan 3roducts1 se'ments

!? branches across Dhaka, .hitta'on', Barisha, +huna, a-shahi, an'3ur  and Syhet re'ions

.aters to seect cient se'ments such as Syndication and 5ease cients constitutin' of ar'e oca and mutinationa cor3orate housesL Su33ier 6inance cients constitutin' of sma and medium enter3risesL and individua de3ositors and .onsumer oan cients

Cence ID5. is in a much stron'er 3osition in terms of its 3roduct and service  3ortfoio com3ared to U5.

Cence U5. has a 'eo'ra3hic covera'e com3arabe to that of ID5.

Cence U5. com3etes 9ith ID5. ony in these seect market se'ments

Seect 3roducts offered under .or3orate, SME and .onsumer 0De3osit and 5oan 3roducts1 se'ments

& branches across Dhaka, .hitta'on' and Bo'ra

.aters to cor3orate housesL sma and medium enter3risesL and individua de3ositors and .onsumer oan cients

Cence ID5. is in a much stron'er 3osition in terms of its 3roduct and service  3ortfoio com3ared to U6I5

Cence ID5. is in a much stron'er 3osition com3ared to U6I5 in terms of its 'eo'ra3hic covera'e

Cence U6I5 com3etes 9ith ID5. ony in these seect market se'ments

/he com3etition is  3articuary stron' in the Su33ier 6inance se'ment considerin' U5.2s stron' service ca3abiity in offerin' this 3roduct

2% of 45

/abe " J .om3arison of Strate'ic issues 0Brand ima'e, service ;uaity and 3ricin' 3oicy1 Or1a*i7a+i*s

8ra*d Ima1( a*d i*/(s+m(*+s i* Mar=(+i*1 Cmmu*i,a+i*s

5rdu,+ a*d S(r/i,( Buali+"

5ri,i*1 5li,"

IDLC

Stron' brand ima'eL ho9ever, investment in marketin' communications is 'raduay increasin', thou'h the bud'et is si'nificanty o9 com3ared to banks

Ci'h 3roduct and service ;uaity ensured at a times

Ci'her endin' rates com3ared to banks, considerin' de3osit  base and bank$  borro9in' as ma-or source of funds

8RAC 8a*= 

Stron' brand ima'e and etensive investment in marketin' communications initiatives, com3ared to ID5.

Ci'h 3roduct and service ;uaity

Much o9er cost of funds, resutin' is o9er endin' rates offered to cients, com3ared to NB6Is

Cence BA. is a direct com3etition for ID5. in this re'ard

Cence athou'h ID5. has a stron' brand, BA. is in a much better 3osition com3ared to ID5. in terms of marketin' communications activities

Ci+" 8a*= 

Cence it is difficut for ID5. to com3ete 9ith BA. in terms of its  3ricin' 3oicy

Stron' brand ima'e and etensive investment in marketin' communications initiatives, com3ared to ID5.

Ci'h 3roduct and service ;uaity

Much o9er cost of funds, resutin' is o9er endin' rates offered to cients, com3ared to NB6Is

Cence athou'h ID5. has a stron' brand, .B5 is in a much better 3osition com3ared to ID5. in terms of marketin' communications activities

Cence .B5 is a direct com3etition for ID5. in this re'ard

Cence it is difficut for ID5. to com3ete 9ith .B5 in terms of its  3ricin' 3oicy

29 of 45

Eas+(r* 8a*= 

I5DC

LC

Stron' brand ima'e and etensive investment in marketin' communications initiatives, com3ared to ID5.

Ci'h 3roduct and service ;uaity

Much o9er cost of funds, resutin' is o9er endin' rates offered to cients, com3ared to NB6Is

Cence athou'h ID5. has a Cence EB5 is a direct stron' brand, EB5 is in a com3etition for ID5. much better 3osition in this re'ard com3ared to ID5. in terms of marketin' communications activities Si'nificanty o9 investment Sufficienty stron' in terms of brand buidin'  3roduct and service and marketin' ;uaity communications activities, com3ared to ID5.

Cence it is difficut for ID5. to com3ete 9ith EB5 in terms of its  3ricin' 3oicy

Cence ID5. is in a much  better 3osition com3ared to IPD. in terms of brand ima'e and marketin' communications

Cence IPD. is a direct com3etition for ID5. in this re'ard

Cence ID5. com3etes directy 9ith IPD. in terms of its 3ricin'  3oicy

Si'nificanty o9 investment in terms of brand buidin' and marketin' communications activities, com3ared to ID5.

Sufficienty stron'  3roduct and service ;uaity

Simiar 3ricin' 3oicy is foo9ed by a  NB6Is, considerin' de3osit and bank  borro9in's as ma-or source of funds

Cence ID5. is in a much  better 3osition com3ared to U5. in terms of brand ima'e and marketin' communications

Cence U5. is a direct com3etition for ID5. in this re'ard

Simiar 3ricin' 3oicy is foo9ed by a  NB6Is, considerin' de3osit and bank  borro9in's as ma-or source of funds

Cence ID5. com3etes directy 9ith IPD. in terms of its 3ricin'  3oicy

30 of 45

FIL

Si'nificanty o9 investment in terms of brand buidin' and marketin' communications activities, com3ared to ID5.

Sufficienty stron'  3roduct and service ;uaity

Cence ID5. is in a much  better 3osition com3ared to U6I5 in terms of brand ima'e and marketin' communications

Cence U6I5 is a direct com3etition for ID5. in this re'ard

Simiar 3ricin' 3oicy is foo9ed by a  NB6Is, considerin' de3osit and bank  borro9in's as ma-or source of funds Cence ID5. com3etes directy 9ith U6I5 in terms of its 3ricin'  3oicy

3.2 8asi, a*d ,m0l(m(*+ar" s+ra+(1i(s d(si1*(d a*d b(i*1 im0l(m(*+(d + ma+,h mar=(+ si+ua+i*s /he market scenario of ID5. varies aon' 9ith its business functions, and accordin'y strate'ies are crafted at or'ani8ationa and functiona eves to co3e 9ith the chan'in' market situations, as 9e as reevant strate'ies ado3ted by its ma-or com3etitors

4.3.1 Corporate &usiness /o remain com3etitive in cor3orate business, ID5.2s s3ecific strate'ic measures incude: 

Im0r/(d (ffi,i(*," a,rss +h( /alu( ,hai*@  by strivin' to o9er fundin' costs to offer 

attractive rates, desi'n feibe credit terms, and im3rovin' overa service ;uaity and timeiness to attract more customersL 

I*,r(asi*1 +i,=(+ si7( to eistin' customersL



8=i*1 l(adi*1 Cr0ra+( hus(s to im3rove ;uaity of the 3ortfoio, and ensure

continuous fo9 of business in futureL 

D(/(l0i*1 *(! s(r/i,( ,a0a,i+i(s to offer better and uni;ue financia soutions to

cientsL

31 of 45



R(s+ri,+i*1 +h( si7( f +h( Cr0ra+( +(am  by not hirin' for any ne9 3ositions and

evera'in' more from the eistin' onesL and 

#(r ? Sl! (0a*si* f 0h"si,al 0r(s(*,( throu'h additiona outets or ne9 branches

for .or3orate and .onsumer Divisions res3ectiveyL

4.3.2 Small and Medium &usiness ID5.2s SME /eam is focusin' on the foo9in' as3ects: 

Ra0id 0rdu,+ i**/a+i* a*d ,us+mi7a+i* , incor3oratin' attributes a33eain' to a

'ro9in' number of customersL 

Ca0a,i+" d(/(l0m(*+ f (*+r(0r(*(urs@ in terms of better 3annin', business and human

resource mana'ement, im3roved I./ 3atform, accountin' and book$kee3in' 3ractices, deveo3in' net9orkin' ca3acities etc, and thus create ne9 o33ortunities for ID5.L 

I*,r(as(d 0r(s(*,( +hru1h addi+i*al dis+ribu+i* ,ha**(ls a*d sal(s u+l(+s.  In addition

to havin' SME 3resence across a branches of ID5., SME has t9o dedicated Saes .enters in Dhaka as 9e to attend to 9ak$in cients 

E0a*si* f 1(1ra0hi, ,/(ra1(  by o3enin' ne9 branches in ocations outside Dhaka 9ith

fourishin' SME business At 3resent, ID5. is contem3atin' o3enin' of a branch in +huna, and another branch in North Ben'a, 9hich is currenty taken care of by Bo'ra branch ony

3.2.2 C*sum(r 8usi*(ss , ID5.2s s3ecific strate'y measures incude: 

Mr( f,us * s+r(*1+h(*i*1 +h( d(0si+ bas(@ thus havin' a source of o9$cost fund

and com3etitive advanta'e in terms of endin' activitiesL 

8=i*1 hi1h *(+$!r+h d(0si+ ,us+m(rs   to im3rove ;uaity of the 3ortfoio, and

ensure continuous fo9 of business in futureL 

D(/(l0i*1 *(! s(r/i,( ,a0a,i+i(s to offer better and uni;ue financia soutions to

cientsL 

R(s+ri,+i*1 +h( si7( f +h( C*sum(r +(am@ (,(0+i*1 D(0si+ mbili7a+i* +(am@  by

not hirin' for any ne9 3ositions and evera'in' more from the eistin' onesL ho9ever, for  de3osit, the si8e of the saes team has increased in the ast cou3e of years to ao9 'reater  sourcin' of de3osits at ID5.L and 

E*1a1i*1 i* CSR i*i+ia+i/(s i*/l/i*1 C*sum(r ,li(*+s@ thus becomin' a 3referred

service$3rovider for the cients

32 of 45

Cha0+(r 4) E*/ir*m(*+al Fa,+rs A*al"sis 4.% 5ESTEL A*al"sis Eterna environmenta factors, as outined in the dia'ram above and their 3ossibe im3acts on ID5.2s strate'ic decision$makin' 3rocess have been anay8ed beo9 throu'h PES/E5 anaysis



Poitica 6actors



Economic 6actors



Socio$.utura 6actors



/echnoo'ica 6actors



Environmenta 6actors



5e'a 6actors

'.1.1 ()L"*"CAL FAC*)RS+ Ma-or 3oitica factors affectin' ID5.2s 3erformance incude: 

Bud'etary measures, dictatin' short, medium and on'$term strate'ies by settin' sectora 3riorities, as 3er 3oicy chan'es every fisca yearL



.or3orate ta 3oicies, affectin' overa 3rofitabiity of the com3any and its cientsL



/ariff 3oicy and trade restrictions, directy affectin' business 3erformance of ID5. cor3orate cients invoved in forei'n tradin'L



6DI 3oicies, dictatin' 'ro9th o33ortunities for both eistin' and ne9 businessL



Environmenta re'uations and abor a9s, re;uirin' 'reater com3iance by cients and hi'her due dii'ence by ID5. 9hie makin' credit decisionsL



Poitica stabiity of the country, dictated by the 'overnment and o33osition 3arties, 'reaty affectin' the overa economic 3erformance of the country and subse;uenty the  3erformance across a industries And due to bad business s3es suffered by cients, ID5.2s business 3erformance aso suffer ne'ative conse;uences

'.1.2 EC),)M"C FAC*)RS+ Ma-or economic factors affectin' ID5.2s 3erformance incude:

33 of 45



e3o and reverse rates, as decared by Ban'adesh Bank, infuencin' inter$bank  endin' activities, thus affectin' commercia endin'L



Provisionin' re;uirements, as a safety measure a'ainst endin' activities, 'reaty affectin' business 3erformance of ID5.L



6avorabe savin's 3oicies, boostin' de3osits in ID5., thus ao9in' hi'her endin' activitiesL



estrictive 3oicy measures by Ban'adesh Bank to contro money su33y and infation determines endin' rates for banks and 6Is, utimatey affectin' overa or'ani8ationa  3erformance

'.1.3 S)C")-CL*RAL FAC*)RS+ Ma-or socio$cutura factors affectin' ID5.2s 3erformance incude: 

Po3uation 'ro9th 'enerates more demand for financia services, resutin' in o3enin' of ne9 branches and 'eo'ra3hic e3ansionL



Increasin' iteracy rates brin's more 3eo3e under the umbrea of forma bankin' and financia servicesL



5ifestye chan'es eadin' to the introduction of ne9 and innovative 3roducts and services to suit uni;ue and ever$chan'in' needs of the diverse cient 'rou3sL



Freater 9omen em3o9erment, resutin' in more femae 3artici3ation across the or'ani8ation and thus addin' a ne9 dimension in the strate'ic decision makin' 3rocess of ID5., 9hie 'ivin' rise to demand of s3eciai8ed 3roducts, such as #omen Entre3reneur 5oan offered by ID5.2s SME De3artmentL and



More invovement in community em3o9erment activities throu'h ID5.2s .S  activities in the areas of better education, heathcare and skis deveo3ment of the under3rivie'ed

'.1.4 *ECH,)L)/"CAL FAC*)RS+ Ma-or technoo'ica breakthrou'hs of ID5. over the 3ast years incude: 

Ado3tion of Hrace 6ecube Universa Bankin' Soution 06.UBS1, the ne9 .ore Bankin' Patform that became o3erationa across ID5. in (anuary ")!", makin' ID5. the first non$bankin' financia institution to use this 3atform /his system has enabed creation of a number of sateite systems to further enhance ID5.2s

34 of 45

o3erationa efficiency and MIS 'eneration, and 9e are on our 9ay to com3ete t9o years of efficient o3eration on this 3atform 

Unified communication net9ork, inkin' a branches and em3oyees of ID5. across various 'eo'ra3hic ocationsL



.ontinuous u3'rade and ado3tion of environment$friendy technoo'ies, 9ith the utimate ob-ective of ca3acity maimi8ation, cost minimi8ation and reduced ne'ative im3act on the environment Ma-or achievements in this re'ard incude 'radua 3rocess of server virtuai8ation, and video conferencin' faciities connectin' ma-or branches and savin' 3hysica trave by em3oyees, thus savin' over ")),))) k#h of eectricity and around !") tons of .H " emission 3er year



C Automation 3ro-ect to mana'e 'ro9in' number of em3oyees and reevant C  issues more efficienty across the ID5. Frou3 /he im3ementation is takin' 3ace in t9o 3hases: Phase I incudes Payro Mana'ement and has aready been aunched in (anuary ")!@L and Phase II incudes other core as3ects such as Em3oyee Profies, Performance Mana'ement, /rainin' Mana'ement etc, and is schedued to be aunched  by the end of ")!@

'.1.' E,%"R),ME,*AL FAC*)RS+ Ma-or issues affectin' ID5.2s business strate'ies in recent years incude: 

Environmenta isk Mana'ement Fuideines issued by Ban'adesh Bank in ")!!, re;uirin' a banks and 6Is to conduct stron' due dii'ence 9hie takin' credit decisions Moreover, stron' monitorin' durin' the credit terms and -oint coaboration 9ith the cients to address and resove environmenta issues are aso re;uired as 3er this 'uideineL



 Ne9 business o33ortunities arisin' throu'h various 3oicies and re'uation issued by the 'overnment 6or eam3e, mandatory instaation and use of E/P 0Effuent /reatment Pants1 in sectors such as teties 3rovides a ne9 financin' o33ortunity for  ID5. for this 3ur3ose Moreover, attem3t of the Fovernment to make brick fieds more environment$friendy aso offers a si'nificant 3ros3ect for ID5. to etend financin' in a ne9 sectorL



Freen Bankin' activities and 'uideines issued by the Ban'adesh Bank not ony re;uires a banks and 6Is to focus more on environmentay sustainabe 3ro-ects and sectors for commercia endin', but aso to streamine its interna o3erations and

35 of 45

 3remises to make those more environment$friendy Such re'uations are refected in the strate'ic decisions of ID5. for the short and on'er termsL 

Environmenta Princi3es of UN Foba .om3act and UN Environment Pro'ramme 6inance Initiative, re'uatin' ID5.2s overa o3erations and endin' 3rocesses in ine 9ith 'obay acce3tabe standards and 3ractices

'.1.0 LE/AL FAC*)RS+ /he functions of ID5. are re'uated by Ban'adesh Bank and Securities and Echan'e .ommission for its .a3ita Market o3erations Ma-or e'a factors affectin' ID5. incude the foo9in's: 

Bein' a non$bankin' financia institution, ID5. is re'uated by the 6inancia Institutions Act, !@ Any chan'es in this act 9i be a33icabe for ID5. as 9e, and accordin'y 9i be refected in its 3eriodic strate'iesL



Interventions by the Ban'adesh Bank and Securities and Echan'e .ommission, the t9o re'uatory bodies of ID5., infuence the strate'ic decision 3rocess of the or'ani8ationL



Bein' an NB6I, ID5. is not authori8ed to 3erform current and forei'n currency transactions

4.& Fi/($Fr,(s Md(l f Cm0(+i+i* 

6actors reated to the immediate industry and com3etitive environment of ID5., as outined in the dia'ram beo9, and their 3ossibe im3acts in strate'ic decision makin' have been anay8ed beo9 throu'h the 4Porter2s 6ive 6orces Mode of .om3etition7

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Substitute Pro)ucts from other In)ustries

Supplie rs of &esour ce Inputs

8i-!lry !on Co)etin ellers

Buyers * Clients

Potential +ew Entrants

/he foo9in' chart summari8es stren'th of the im3act of these five forces, and their  3robabe infuence on ID5.:

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Detais of these factors have been described beo9:

'.2.1 Competition among Rial Companies 6or ID5., the com3etitive environment from riva com3anies is ceary differentiated into t9o scenarios: 

.om3etition from other NB6Is



.om3etition from commercia banks

If the com3etitive environment is anay8ed considerin' ony com3etition NB6Is, the threats of riva com3anies 9i be o9 in i'ht of the foo9in' factors: 

Ma-ority of the NB6Is in Ban'adesh offer s3eciai8ed 3roducts and services ID5. is one of the very fe9 eadin' NB6Is offerin' a diversified 3ortfoio of 3roducts and services coverin' a branches of financia services Cence ID5. is in a stron'er   3osition com3ared to ma-ority of the market 3ayers in the NB6I se'ment



ID5. retains the stron'est 3rofessionas in the market 'raduatin' from eadin' oca and internationa universities, 9hich is a ma-or com3etitive advanta'e over its NB6I com3etitors

Co9ever, if the com3etitive environment is anay8ed considerin' ma-or commercia banks as ID5.2s com3etitors, the threats of riva com3anies 9i be com3arativey hi'her due to the foo9in' factors: 

ID5., bein' an NB6I, cannot offer trade services such as o3enin' of 5.s, overdraft and other 9orkin' ca3ita faciities, as 9e as deain' 9ith forei'n currencies /his is a si'nificant disadvanta'e for ID5. considerin' other com3etin' commercia banks, many of 9hich are de3endent of these services for their revenue stream



Bein' an NB6I, ID5. has to borro9 funds from other banks 9hich are then marked$ u3 and channeed to cients as term endin' Cence by nature ID5.2s endin' rates are hi'her com3ared to riva banks, 9hich is another si'nificant disadvanta'e



/here market 3ayers offer cosey standardi8ed 3roducts and services /his mainy resuts from the hi'h re'uatory re;uirements in aunchin' ne9 3roducts and services Cence cients can easiy s9itch bet9een brands, thus raisin' the com3etition



/he eadin' 3ayers in the market are re'uary comin' u3 9ith innovative 3roducts and ne9 marketin' strate'ies to attract and retain more customers, and thus ca3ture a 'reater share of the market Cence re'uar strate'ic revisions are mandatory to remain  3rofitabe in the market

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'.2.2 *reats o! ,e Entrants 

/he threat of ne9 entrants is o9 for ID5. considerin' the foo9in' factors:



/he bankin' and financia sector is a hi'hy re'uated market, 9ith ar'e initia investment re;uirements /his si'nificanty raises the entry barriers, thus 9eakenin' threats from ne9 entrants for the eistin' market 3ayers



In the backdro3 of the in'erin' effects of the 3ast financia crisis, and ma-or scandas ike that of the Camark Frou3, many 3ubic and 3rivatey o9ned banks and 6Is are stru''in' to make a 3rofit, or even remain in the business /his reduces the ikeihood of ne9 com3anies enterin' this market in the near future



In the 3resent financia situation of the country, investment is at a decinin' rate, 9hie cients are more cautious in avaiin' faciities from banks and financia institutions /hus demand at 3resent is decinin', makin' it more difficut for ne9 com3anies to enter the market



/he eadin' market 3ayers stron'y ca3ture a si'nificant 3ortion of the market Cence it 9i be difficut for ne9 entrants to ure a9ay customers and 'ain a considerabe market share

'.2.3 (oer o! Suppliers 6or financia institutions, the ma-or su33ier 'rou3s are those offerin' the re;uired fund that can be utii8ed for endin' 3ur3oses And ma-or fund sources and their infuence on ID5. have been mentioned beo9: 

iva banks and financia institutions, in the form of inter$bank echan'e, 9hich is mosty determined by market forcesL



Individua and institutiona cients, in the form of term de3osits H9in' to hi'h com3etition in the market, de3osit cients are more rate$sensitive and hence have a 'reater bar'ainin' 3o9er over ID5., re;uirin' hi'her interest rates on their term de3ositsL and



efinancin' faciities of Ban'adesh Bank and forei'n funds from many deveo3ment or'ani8ations,

havin' considerabe

infuence

over ID5.2s 3erformance

and

com3iance 3rocess to consider it ei'ibe for avaiin' those funds

'.2.4 &argaining (oer o! Client /roups /he financia sector faces hi'h bar'ainin' 3o9er from the consumer 'rou3s attributabe mainy to the foo9in' factors:

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

5o9 s9itchin' cost for the consumer 'rou3s due to ar'ey standardi8ed 3roducts and services offered by the com3etin' com3aniesL



6or .or3orate 6inancin' 3roducts, banks and 6Is o3t to add the eadin' ar'e oca and mutinationa cor3orate houses in their 3ortfoio, not ony in considerin' of ar'e  business voumes but aso to increase the ;uaity and brand vaue of their overa  3ortfoio Cence this 3rovides si'nificant bar'ainin' 3o9er to the cient 'rou3s

'.2.' Competitie (ressure !rom Sustitute (roducts /hreats of substitutes refer to 3roducts offered by 3ayers outside the industry that can offer simiar benefits at simiar 3rices to the consumer 'rou3s 

6or the bankin' and financia sector, hence, threat from Substitute Products is amost non$eistent considerin' the nature of its 3roducts and services

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Cha0+(r 9) S-OT A*al"sis 9.% S-OT A*al"sis /he foo9in' tabe summari8es ma-or 3oints concernin' ID5.2s com3etitive anaysis, in terms of its .ore Stren'ths, 5imitations, Market H33ortunities and /hreats to 6uture Fro9th Each of these 3oints has been eaborated beo9

S+r(*1+hs • •

• • •

• • • • • • •

Effective Strate'ic Decision and Eecution .or3orate Fovernance

• •

• • • •

• •

Ci'her endin' rates Unauthori8ed to 3erform certain  business functions

.om3etent Mana'ement /eam Stron' 6inancia Position Diversified 3roduct 3ortfoio, ao9in' one$sto3 soutions Presti'ious customer base Professiona #orkforce Stron' C Mana'ement /echnoo'y Patform Su3erior .ustomer Services .S .ommitment, and Stron' Brand Ima'e

O00r+u*i+i(s •

-(a=*(ss(s

6ocus on Freen 6inancin' activities obust SME 5endin' Priority /eam 6ormation under .onsumer 6inance 6inancia 5iteracy for Stakehoders 5evera'in' on Marketin' .ommunications Ci'hy .om3etitive Industry, and E3andin' Branch Net9ork 

Thr(a+s •

Freater .ustomer Bar'ainin' Po9er  Ci'hy ate Sensitive .ients

•

Poitica and Economic Situations

•

e'uatory estrictions

•

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Cha0+(r :) A*al"sis * O/(rall 8a*=i*1 I*dus+r" ,-. In)ustry !ife Cycle /o kno9 9hich sta'e the bankin' industry of Ban'adesh is in no9, 9e need to anay8e many financia 3arameters In my re3ort, I have investi'ated the foo9in' 3arameters to 'et an understandin' of ife cyce of Ban'adesh2s overa bankin' industry:

!1 .ountry2s /ota credit 'ro9th J a banks "1 .ountry2s /ota De3osits 'ro9th J a banks @1 .ountry2s Hvera E3ort 'ro9th *1 .ountry2s Im3ort Scenario &1 Sectora FDP 'ro9th

5.1.1 Countr$s *otal credit grot 6 all anks

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5.1.2 Countr$s *otal #eposits /rot

7.1.3 Countr$s )erall E7port grot

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7.1.4 Countr$s "mport Scenario

7.1.5 GDP Sectoral Growth rate in %

44 of 45

.onsiderin' a the above facts, 9e see that Ban'adesh2s bankin' industry is sti in 'ro9th sta'e

6i'ure: /he ife cyce curve sho9s in 9hich sta'e Ban'adesh2s bankin' industry is in

:.& Dmi*a*+ Trai+s f +h( I*dus+r" /he anaysis of the immediate industry and com3etitive environment be'ins 9ith an anaysis of the dominant features of the industry, thus 'ainin' a com3rehensive overvie9 of the industry andsca3e

Ma-or economic features of the financia services industry incude:

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/ar0et Si1e % Growth &ate

+o of In)ustry &i2als

$echnolo'ical Chan'es

Bar'ainin' Power of Customers

Pro)uct an) Ser2ice i3erentiation

eman)(Supply Con)itions

/he foo9in' section 3resents a brief on each of these economic features: 

Mar=(+ Si7( a*d Gr!+h Ra+() /he market si8e and 'ro9th rate is an im3ortant

indicator of future business 3ros3ects of the market 3ayers, sho9in' eve of 3roduct and service innovations re;uired for the future, and strate'ic measures needed to secure eistin' market 3osition and ca3ture ne9 market share 

Numb(r f Ri/al Cm0a*i(s i* +h( Mar=(+) /he financia services sector is

characteri8ed by hi'h eve of com3etition amon' the riva com3anies to maintain eistin' market 3osition 9hie tryin' to ca3ture more market share Moreover, market is dominated by a fe9 to3 market 3ayers havin' 'ained com3etitive advanta'e over  riva com3anies in terms of 3roduct offerin', service standards, technoo'ica com3etitiveness and stron' 3oo of human resources 

8ar1ai*i*1 5!(r f +h( Cus+m(rs) /his industry is characteri8ed by hi'h

 bar'ainin' 3o9er of the customers, o9in' to intense com3etition amon' the riva com3anies resutin' in o9 s9itchin' cost for the customers from one service 3rovider  to the net 

D(1r(( f 5rdu,+ a*d S(r/i,( Diff(r(*+ia+i*) /here is not much sco3e of hi'h

 3roduct differentiation in the financia services industry, 9hich eads to hei'htened com3etition in terms service ;uaity and 3ricin' strate'y amon' the com3etitors 

D(ma*d$su00l" C*di+i*)  A si'nificant share of the country2s 3o3uation is sti

 beyond the reach of the forma bankin' and financia services sector, thus 3osin' a

46 of 45

si'nificant o33ortunity for the eistin' market 3ayers to e3and their business, and for  ne9 entrants in the industry 

5a,( f T(,h*l1i,al Cha*1(s) /echnoo'y 3ays a ma-or roe in advancin' the

industry by ao9in' ne9 3roduct and service standard innovations, thus ao9in' more so3histicated service deivery to the cients

:.2 Dri/(rs f I*dus+r" Cha*1( /he Drivin' 6orces of an industry are the ma-or underyin' causes of chan'in' industry and com3etitive conditions by infuencin' customers, com3etitors and su33iers to ater their strate'ies and actions Such forces are the bi''est infuences on ho9 the industry andsca3e 9i ater

/he ma-or industry drivin' forces incude:

Increasin' Globali1ation

Chan'es in Customer Pro4le

Pro)uct Inno2ation

$echnolo'ical Chan'es

&e'ulatory In5uences

Go2ernment Policy Chan'es

Chan'in' Societal Concerns an) !ifestyles

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/he foo9in' section identifies im3act of each of these drivin' forces in sha3in' the industry, 9hie offerin' an insi'ht into the eterna environmenta factors affectin' the industry: 

I*,r(asi*1 Glbali7a+i*, makin' com3etition more intense throu'h increasin'

invovement of mutinationa and overseas com3anies in the financia sectorL 

Cha*1(s i* Cus+m(r 5rfil( , re;uirin' continuous innovation in terms of 3roduct

and service features to match their chan'in' needs and re;uirementsL 

5rdu,+ I**/a+i* , 9hich shoud be a continuous 3rocess to ta3 different market

se'ments, cient 'rou3s and 'eo'ra3hic ocations 9ith customi8ed 3roducts, 3roduct mies and financia soutionsL 

T(,h*l1i,al Cha*1(s, 9hich is crucia in today2s 9ord to 3rovide faster and more

efficient service, aso customi8ed as 3er cient needsL 

R(1ula+r" I*flu(*,(s , 9hich is a si'nificant drivin' force for banks and 6Is /his

 bein' a hi'hy re'uated sector, banks and 6Is must be fuy com3iant to the 3oicies and re'uations of the Ban'adesh Bank, and the Securities and Echan'e .ommission in terms of ca3ita market o3erationsL 

G/(r*m(*+ 5li," Cha*1(s  is another ma-or industry force, since it affects not ony

the o3erations of the banks and 6Is, but aso those of their cients from different industries, 9hich resuts in chan'e of strate'ies for banks and 6IsL and 

Cha*1i*1 s,i(+al ,*,(r*s a*d lif(s+"l(s , raisin' demands for more so3histicated

savin's and oan 3roducts and com3ete financia soutions for both individua and institutiona cients

:.3 K(" Su,,(ss Fa,+rs $ Better customer service $ Area covera'e  3resence 0onsite  internet  mobie1 $ 5o9 endin' rates $ Sector focus

4% of 45

Cha0+(r ;) R(,mm(*da+i* a*d C*,lusi* 6.% R(,mm(*da+i* a*d C*,lusi* In i'ht of the discussion and anaysis of various factors infuencin' ID5.2s 3erformance and the industry as a 9hoe, 9e can dra9 the concusion that ID5. hods a stron' 3osition in the bankin' and financia services sector of Ban'adesh /his has been achieved over the years throu'h a combination of stron' and 3ro3ery baanced strate'ic ob-ectivesL stron' mana'ement eadin' to efficient strate'y deveo3ment and eecutionL revisin'  business modes and strate'ies in a timey manner in res3onse to chan'in' market scenario and com3etitor movesL and anay8in' factors of the eterna environment and the immediate industry and com3etitive environment and accordin'y takin' measures to en'a'e those in ID5.2s favor Co9ever, ID5. beieves in continuin' its 3ursuit for further 'ro9th and im3rovement, and consideration of the foo9in' factors is stron'y recommended to achieve that ob-ective: 

U3date the vision statement to add more s3ecific and tan'ibe 'oas and tar'etsL



Im3rove 'ender baance and thus add a ne9 dimension to the strate'ic decision$makin'  3rocessL



.ontinuousy u3date its strate'ic 'rou3 ma33in' to have cear understandin' about its market 3osition and cose com3etitors, and accordin'y deveo3 or revise strate'ies to res3ond to strate'ic moves of its com3etitorsL



6ocus more on SME financin' activities and ca3acity deveo3ment of sma and medium entre3reneurs to evera'e more from a 'ro9in' sector and create ne9 cient 'rou3sL



.ontinue investment to u3'rade its technoo'ica 3atform to be the best in terms of  ;uaity of 3roduct and service deiveryL



5evera'e on environmenta re'uations by identifyin' ne9 business o33ortunities, as 9e as investment in 'reen financin' activities in ine 9ith the re;uirements of  Ban'adesh BankL

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