FINANCIAL RATIOS
BCG Matrix
Stars (High Growth, High Market Share)
Deposit (Savings Account) Loans Online Banking
Question Marks (High Growth, Low Market Share)
Cash Cows (Low Growth, High Market Share)
Investments Credit Cards Bill Transfer
Dogs (Low Growth, Low Market Share)
All access account - savings and checking account with free life insurance
For Lease For sale of used car
Five Porters Framework
New Entrants
1. Cathay United Bank (2015) 2. Industrial Bank of Korea (2015) 3. Shinhan Bank (2015) 4. Sumitomo Mitsui Banking Corp. (2015)
Bargaining Power of Suppliers
1. BSP 2. PDIC 3. Suppliers of Passbook, ATM Machines, ATM Cards, Deposit slips and Withdrawal Slips
Industry Competitors
1. Metrobank 2. BPI 3. BDO 4. China bank
Substitute Products
1. Loan Shark 2. Pawn Shops 3. Black Market 4. Cooperative
Bargaining Powers of Consumers
1. Local And Foreign Investors 2. Students 3. Professionals 4. Pensioners 5. Employees
New Entrants
With quite a few new banks entering the market each year, the threat from new competitors in the banking industry should be high. However, due to bank failures and mergers, it appears otherwise. People are very wary on whether or not they should invest the ir money on new banks. The main reason for this is ‘trust’. Because the banking industry deals with other people’s money and financial information, a lot of people still prefer major banks that they consider trustworthy. Bargaining Power of Suppliers
The main suppliers of the banking industry in the Philippines are the BSP and the PDIC. The BSP regulates every bank in the industry while the PDIC mainly provides insurance for deposits of all banks. PDIC exist to protect the depositors by providing insurance for the depositors. Another essential supplier of banks are the once who’re making their passbooks, ATMs, Cards and slips that is vital for the banking industries day to day operations. Bargaining Powers of Consumers
The bargaining powers of the consumers are imperative to the banking industry. A single individual has a relatively low bargaining power and a loss of a single account has unnoticeable impact. However, an individual may influence more clients such as students, professionals, or anyone that is in the same environment and may substantially affect the bank’s profitability. It may also cause an implication on a larger scale like those of foreign and local investors. Thus, means that every single individual regardless of bargaining powers is significant. Substitute Products Some of the banking institutions largest threats don’t come from other banks. Pawn shops, loan sharks, black market and cooperatives pose the biggest threat. Although the industry does not really suffer significant threat when it comes to deposits and withdrawals, however loans, mutual funds and fixed income securities are bank services that are also offered by other non-banking companies. Industry Competitors
Banking Industry is considered as one of the most highly competitive industry. Almost everyone who needs any banking services already has them. For this reason, banks try to lure their competitor’s clients away and make them their own. The banking industry is often about who can offer the best and the most convenient services, thus resulting on the banks to experience lower rate of return. Major players such as BPI and BDO tend to prefer mergers with other banks to gain more clients.
EXTERNAL FACTORS EVALUATION (EFE MATRIX) KEY EXTERNAL FACTORS SWOT - Opportunities 1. new products and services 2. New trade agreements between countries are possible. 3. New products and services are possible. 4. Online Market 5. International Expansion 6. Acquisition synergies 7. New technology 8. Expanding the advisory and other services offered to clients, investors and other banks 9. Boosting the bank's reputation as a reliable partner 10. Building new client relationship SWOT - Threats 1. increasing costs 2. increasing rates of interest 3. financial capacity 4. government regulations 5. tax changes 6. Automation is an unknown factor for this industry. 7. The industry sees new market entrants. 8. Political risks 9. Industry competitions 10. Bad acquisitions TOTAL
0.15 0.04
3 3
0.45 0.12
0.1 0.05 0.03 0.03 0.05 0.07
4 4 3 3 3 3
0.4 0.2 0.09 0.09 0.15 0.21
0.06
4
0.24
0.06
3
0.18
0.03 0.04 0.07 0.05 0.03 0.02
1 1 2 1 2 1
0.03 0.04 0.14 0.05 0.06 0.02
0.03 0.02 0.06 0.01 1
2 2 1 2
0.06 0.04 0.06 0.02 2.65
SWOT - Opportunities
SWOT - Threats
1.
new products and services
1.
increasing costs
2. 3.
New trade agreements between countries are possible.
2.
increasing rates of interest
Improved Advertising/Advertisement
3.
financial capacity
4.
Online Market
4.
government regulations
5.
International Expansion
6.
Acquisition synergies
7.
New technology
5. tax changes 6. Automation is an unknown factor for this industry.
8. Expanding the advisory and other services offered to clients, investors and other banks
7.
The industry sees new market entrants.
8.
Political risks
9.
9.
Industry competitions
Boosting the bank's reputation as a reliable partner
10. Building new client relationship
10. Bad acquisitions
SWOT - Strengths
Strengths / Opportunities
1.
existing distribution and sales networks
2.
domestic market
3.
barriers of market entry
4.
experienced business units
5.
high profitability and revenue
6.
The industry has unique products.
7. The industry shows a strong diversification. 8. The industry is more robust than the economy in general. 9.
S10-O10 S9,S10-O9,O10 S6-O1 S9-O8 S10-T8,T4
Strengths / Threats
S10-T8,T4 S5-T5
monetary assistance provided
10. Innovative culture. SWOT - Weaknesses
Opportunities / Weaknesses
1.
brand portfolio
2.
taxes
3.
There might be too less suppliers.
4.
Profitability could be higher in this industry.
5.
High loan rates
6.
Online presence
7.
Customer service
8.
Vulnerable to risk
9.
Structural weaknesses
10. Low brand recognition
W10- O3 W6,W7-O8,O10
Weaknesses / Threats
W2-T2 W10-T7
SPACE MATRIX
FP
Conservative
Aggressive
7
6
5
4
3
2.8 2
1
CP
2.4 -7
-6
-5
-4
-3
-2
-1
1
2
3
4
-1
-2
-3
-4
-5
-6
-7
Defensive
SP
Competitive
5
6
7
IP
X-axis
2.8
Y-axis
2.4
Internal Analysis: Financial Strength (FP) Return on Investment (ROI) Leverage Liquidity Working Capital Cash Flow
Financial Position (FP) Average
Internal Analysis: Competitive Advantage (CA) Market Share Product Quality Customer Loyalty Tec hnological know-how Control over Suppliers and Distributors
Competitive Position (CP) Average
6 6 5 6 5 5.6
-1 -2 -5 -3 -4
External Analysis: Environment Stability (ES) Rate of Inflation Technological Changes Price Elasticity of Demand Competitive Pressure Barriers to Entry into Market
Stability Position (SP) Average
External Analysis: Industry Strength (IS) Growth Potential Financial St ability Ease of Entry into Market Resource Utilization Profit Potential
-3.0 Industry Position (IP) Average
According to the graph above, we noticed that Security Bank falls into the aggressive quadrant of the SPACE Matrix. It is located at the coordinates of 2.8 for x-component and a y-component of 2.4. It shows that Security Bank has a strong competitive position in the market with rapid growth. It also indicates that Security Bank should adopt aggressive strategy. It needs to use its internal strengths to develop a market penetration and market development strategy.
-4 -3 -3 -4 -2 -3.2
6 6 6 6 5 5.8
