An Assignment

on Strategic Management about

BRAC Bank Limited

Submitted To

Submitted By
ID Name

Section: B, Batch: 10

Department Of BBA

DHAKA CITY COLLEGE, Dhaka

Introduction:
For a country, the banks are the heart and soul of the financial system. Therefore, the s o u n d and efficient performance of the banks are very much essential for the s u s t e n a n c e o f t h e f i n a n c i a l s y s t e m o r e c o n o m y o f t h e c o u n t r y . L i k e o t h e r organizations, banks are also dependent upon the consumers for their survival in the market. M o d e r n b a n k s p l a y v i t a l r o l e i n promoting economic development of a country. Banks provide necessary f u n d s f o r e x e c u t i n g v a r i o u s p r o g r a m s u n d e r w a y i n t h e process of economic development. They collect savings of large masses of people scattered through out the country, which in the absence of banks would have remained idle and unproductive. These scattered amounts are collected, pooled together and made available to commerce and industry for meeting the requirements. BRAC Bank Ltd. is one of those banks that plays important role in the economy of Bangladesh. There are thirty six branches of BRAC Bank all over the country. The a c t i v i t i e s o f d i f f e r e n t d e p a r t m e n t a r e d i f f e r e n c e s a s p e r t h e i m p o r t a n t o f t h e department.

Chapter: 1

History of the BRAC Bank:

BRAC Bank Ltd, a full service commercial bank with Local and I n t e r n a t i o n a l Institutional shareholding, is primarily drive by creating opportunities and pursuing market niches not traditionally met by conventional banks. BRAC Bank has been s t r i v i n g t o p r o v i d e b e s t - i n - t h e - c l a s s s e r v i c e s t o i t s d i v e r s e r a n g e o f c u s t o m e r s spread across the country under an on-line banking platform. T o d a y , B R A C B A N K L i m i t e d , o n e o f t h e l a t e s t g e n e r a t i o n o f commercial banks which started its journey on the 4th of July 2001 with a v i s i o n t o b e t h e a b s o l u t e market leader through providing the entire range of banking services suitable to the needs of modern and dynamic banking business as well as to promote broad based p a r t i c i p a t i o n i n t h e B a n g l a d e s h e c o n o m y t h r o u g h t h e p r o v i s i o n o f h i g h q u a l i t y banking services. The unique strength of BRAC Bank lays in the fact that BRAC one of the worlds largest private development organization is its key shareholder and the banks vision is thus aligned with those of BRAC. The reason BRAC Bank is in business is to build a profitable and socially responsible financial institution focused on markets and businesses with growth potential, thereby assisting BRAC and stakeholders build a just, enlightened, healthy, democratic and p o v e r t y f r e e .B a n g l a d e s h BRAC Bank fulfils the purpose by reaching for high standards in doing e v e r y t h i n g f o r t h e i r c u s t o m e r s , s h a r e h o l d e r s , a s s o c i a t e s a n d communities upon, which the future prosperity of their company rests. BRAC Banks envisages providing mass financing by increasing access to economic opportunities for all individuals and business in Bangladesh with a special focus on currently under-served enterprises across the rural-urban spectrum.

Vision:
Building a profitable and socially responsible Double Bottom Line driven financial Institution focused on pursuing existing and underserved markets and business with growth potential, thereby assisting BRAC and stakeholders build a just, enlightened, healthy, democratic and poverty-free Bangladesh".

Mission:
Sustained growth in Small & Medium Enterprise sector. Continuous low-cost deposit growth with controlled growth in Retail Assets. Corporate Asset to be funded through self-liability mobilization. Growth in Assets through Syndications and investment in faster growing sectors. Continuous Endeavour to increase fee based income. Keep our Debt Charges at 2% to maintain a steady profitable growth. Achieve efficient synergies between the Banks branches, SME unit offices and BRAC field offices for delivery of Remittance and Banks other products and services. Manage various lines of business in a fully controlled environment with no compromise on service quality. Keep a diverse, far flung team fully motivated and driven t o w a r d s materializing the Banks vision into reality.

Goals:
Create a new breed of entrepreneurs. Build awareness among Expatriate Bangladeshis to expand use of banking channels for remittance. Expand use of technology and plastic to provide financial solutions to t h e mass and under-served market. Synergy between financial and non-financial institutions to develop innovative financial products for customers across rural-urban spectrum.

Objectives of the Bank:

To provide wide range of financial services professionally, efficiently and competitively to achieve per-eminent position in chosen market. Diversity revenue stream through product innovation. A Well-diversified credit portfolio, which produces a reliable and consistent return to investment,

Values of the Bank:

Their Strength emanates from their owner BRAC. This means, t h e y w i l l h o l d t h e following values and will be guided by them as they do their jobs. Value the fact that they are the member of the BRAC family. Creating an honest, open and enabling environment. Have a strong Customer focus and build relationships based on integrity, superior service and mutual benefit Strive for profit & sound growth. Work as a team to serve the best interest of their owners. Relentless in pursuit of business innovation and improvement. Value and respect people and make decisions based on merit. Base recognition and reward on performance. Responsible, trustworthy and law-abiding in all that they do

Chapter: 2

Strategic Analysis
FUNCTIONAL LEVEL STRATEGY Hiring strategy
One thing BRAC Bank values most is its human resource. They believe that the human resource is the torch-bearer of the organizational culture & values and the company will grow through .effective utilization of this resource BRAC Bank has developed a management trainee program to nourish future leaders, who will take the organization to the new age. In order to ensure that they hire only the best, they have a well-structured, five-level recruiting process. At first, the HR department sorts out & short lists the candidates from the resumes submitted. These short-listed candidates face an initial screening interview. Next the screened candidates sit for a written examination containing aptitude questions in Math & English. Those who pass the test appear for a spot-presentation, where they have to give to speech on a topic randomly selected by them (candidates). The last stage is the final interview in front of a panel consisting of the Managing Director, Chief Operations Officer & the Head of Human Resource. Those who pass through all the five levels .of recruitment process are usually the best of the lot

IT- internet banking, Tele-banking

BRAC Bank is highly focused on using IT for providing better services. For the core banking purpose BRAC Bank uses international software called Financial developed by Info. Technologies. From teller transactions to all sorts of front-end customer services are handled through this software. Also customer database maintenance, loan realization & amortization, .interest calculation, accruals & disbursement are managed by Finacle The Treasury department uses software named Castle developed by SRG InfoTech LTD to .manage its functions

Marketing
BRAC Bank uses extensive marketing to capture new customer base. They have one of the biggest direct sales team in their disposal for marketing their products to potential clients. The organization also advertises on almost all kinds of media. For different niche marketing products, BRAC Bank uses customized marketing for each target groups. They not only campaign about their retail banking products, their sales team visits corporate clients as well to .create awareness about their available products

BUSINESS LEVEL STRATEGY

In business level, BRAC Bank uses differentiation strategy. After analyzing their business level -activities we have come up with these analysis

Customer group & market segmentation

BRAC Bank has different loan & deposit products for different customer groups. Amongst the three product lines- SME, Retail & Corporate, we are excluding corporate products because these products are customized, almost on a per-client basis. SME, which is the biggest profit earner for this bank has mostly loan products. These products are customized based on the size of the clients business. Based on the business size, the customers are divided into small business & medium business. In Retail product line, the market segmentation is done mainly based on social class & profession. BRAC Bank first tries to figure out whether a product will be attractive for a specific profession/class or not. Then they try to customize & design the product .to better meet customer needs

Customer needs & product differentiation

BRAC Bank offers different products for different market segments. When a customer comes for loans, BRAC Bank tries to sort out which category the customer fits in. Then the customer is offered their specific product but if the customer qualifies for some other products then he is left with the final choice. Also upon customers request BRAC Bank further customizes their .products on special cases

Distinctive competency
BRAC Bank developed their distinctive competency over its competitors by using extensive IT. A bank needs rigorous reporting everyday. BRAC Bank has to generate a lot of reports like compliance report for the Central bank, internal reports for the top management and auditor's reports. Also the institutional investors need reports to realize how the bank is doing. The base data for all these reports are generated by Finacle, BRAC Bank core banking software. Then .these data are formatted as required by different stakeholders BRAC Bank has a strong backbone network connecting all its branches with the central branch. At the end of the all the daily transactions on all branches are synchronized with the central bank .& the end-of-the-day procedure is run from the central server as well

CORPORATE LEVEL STRATEGY

Banks have to maintain much secrecy in their business. During our information collection process, we tried to know about the corporate policies of BRAC Bank. But we failed to do so because our primary sources were reluctant to share any information related to their organizations corporate strategies. So we tried secondary sources but were not successful to get

any information from that too. Due to these we were unable to explain & analyze the corporate .level strategies of BRAC Bank

SWOT Analysis of BRAC Bank Limited:

SWOT analysis means analyzing the strengths, weakness, opportunities and threats of the Organization to know the present condition. This is very common analysis to determine the companys capabilities of doing effective business. This help to know the possible advantages and disadvantages of the firm that it has compare to compare to others. The SWOT analyses are briefly given in the below: Here is the SWOT analysis of BRAC Bank:

S- STRENGTHS
As a private commercial bank BRAC BANK enjoys the following strengths Wide range of service line Online Banking Services Excellent working environment The bank is providing modern services like ATM, on line banking, SWIT facilities, SMS Banking. The banking service is easily accessible and feasible Efficient and skilled workforce Higher profitability The bank launched several deposit schemes, which have been appreciated by the Consumers resulting growth of deposit of the bank. Huge business area The bank has earned customer loyalty as well as organizational loyalty. The bank has also control in maintain quality services to its clients. BRAC Bank Ltd. has a long-term reputation in the banking industry as it is one of the promising players in the industry. So, their enduring good will in the field works as a vital strength. Its one of the important strength is its big portion of share as it provides security to the customers. They feel reliable to deal with this bank and usually do not switch. BRAC Bank Ltd has a good number of corporate customers. They have clients from all small, medium and big enterprises. This is because of the reliability they provide to their customers. The bank also provides all their services at a very low rate. As a result people of all status can easily become a client of the bank.

 They have qualified and experienced human resources who are h i g h l y committed to their customers. It has sophisticated automated banking system in most of its branches which foster the overall banking activity. They have excellent management system to integrate all the branches with the head office.

W-WEAKNESS
Lack of proper motivation, training and job rotation Limited workforce compare to competitors Lack of clearly define marketing objective Limited number of branches Lack of promotional objectives and strategies Lack of implementing more equipped IT technology Fund is getting costlier and getting access to the fund is also becoming more difficult Lack of experienced employees in junior level management. Lack of motivation among the workers. Heavy dependency on Head Office in decision making sometimes slower the work process. Lack of extrinsic and intrinsic reward & incentives for the employees from management sometimes result to job burn out. High dependency on word of mouth strategy.

O-OPPORTUNITIES
As the economy of Bangladesh is gradually boosting up and many industries are performing better, there is always an opportunity of market growth. So, it is up to BRAC bank to garb these opportunities with open arms. Traditionally the state owned and foreign banks have been very keen to exploit these openings. Then again it is the correct strategy; hence the efficient marketing mix of seven can play a crucial role in this regard. LC, credit Openings to take market share away from rival firms services, corporate banking etc can .be very handy for BRAC bank in this regard
Openings to exploit emerging new technologies in Banking

With the advancement of technologies many new opportunities have also blessed the banking sector world wide. Bangladesh has also started to feel the wave of new technologies. BRAC bank should size these opportunities specially credit card, telephone banking, SMS banking, electronic money transfer etc. These new products of It revolution can be very handy for BRAC bank in pursuit of a fast growth. Already, the ATM facilities and tele banking are proving their worth and more of these techno related services will .definitely add flexibility and diversification in services
Serving additional customer groups and expanding geographic coverage and service segments

BRAC bank can expand rapidly at the district towns and important rural business centers. This move can secure them a stable client base without much competition as the state owned banks are mostly enjoying this opportunity. Also expanding in the remote areas can help BRAC bank to obtain more profit against less competition like the metropolitan cites. Beside that the already established positive image of BRAC NGO can play crucial role in this regard. Also the BRAC NGO can help BRAC bank initially with its financial .activities
Planning to go global

There is always a possibility of reaching the international customers. As BRAC Ngo has extended its operation in Afghanistan, BRAC bank might consider expanding globally with the NGO. But the precaution should be only countries with low concentration foreign banks should be targeted. The presence of BRAC Ngo can work as catalyst in a foreign .country
Comprehensive services

BRAC bank can provide diversified financial services. Organizations and people need different sorts of financial services from time to time like banking, insurance, stock broker services, money transfer etc. Becoming one stop solution for all financial services will only enhance the possibilities that the clients are that corporate or individual will be relying on BRAC bank heavily. Definitely if properly implemented diversification in .financial services are bound to provide a good return for BRAC bank
:Ability to take advantage of learning and experience curve effects

Learning and experience curve effect are the result of continuous repetition and large volume of services rendered. If things go like now for BRAC bank within a few years learning and experience curve effects will definitely drive down the cost. As a result the overall cost structure will be lower and the gross profit margin will increase. Thus BRAC .bank will be more financially stronger

T-THREATS

Increasing bargaining power of the customer

As more banks are starting operation in Bangladesh, more the banking sector is getting fragmented and thus customers are gaining more bargaining power over the banks. Today high profile customers have all the rights to break away from the relationship with Standard & Chartered bank and go to HSBC or Citi bank N.A. This rise in bargaining power of customers is a threat to BRAC bank which puts pressure for improved services at minimum cost. As a result there are possibilities in reduction of gross profit
Number of potential new competitors is increasing

In every year on average three new banks are coming up which is intensifying the competition. To make the matter worse the metropolitan areas are becoming denser with a branch of 4-5 different banks side by side. A downward economic situation may make the .chance of survival slim due to presence of lot of banks New regulations of the central bank This threat is always on cards as the central bank is the most powerful authority in the banking sector. Suppose a sudden change in required reserve ratio can squeeze the money available to BRAC bank. Again the concretionary monetary policy currently adopted by .the central bank has already made the investment lower than the beginning of this decade Government's new rules and policy Government is the legitimate source of power and is able to change anything overnight. So, there is always a threat that Government can jeopardize the operation of BRACk bank. Also Government can force to reduce the interest rates and reduce the salary of the top management. As a result Government always remains at side of becoming a source of .negative impact Strong presence of International banks Even before BRAC bank came to life the foreign banks like HSBC, Citi N.A, and Standard & Chartered were here. They have more financial might than BRAC bank. Beside that due to long presence and good reputation the foreign banks are currently enjoying a clear upper hand. Also being early movers they are relatively nicely poised to attack BRAC bank in many ways. So, obviously the presences of the foreign banks are a big threat for BRAC bank.

Findings:

On the basis of previous analysis and practical experience to visit BRAC Bank, the following findings are observed during the period: Need professional data entry operator. Inadequate work force Lack of proper coordination among different departments. BRAC Bank Ltd. is not using advance and develop software. They are using only one software. Inadequate facilities of Ascend Millennium Banking System. Conservative Management. Unauthorized use of different ID in system Absence of proper guideline/ planning of respective job. No structured reconciliation process. Limited knowledge about PC and related software. Duplication of work like; checking and over documentation. BRAC Bank Ltd. is doing their Office work manually. But other banks are using many developed techniques and software. Less secured than the department should be. Less structured than other departments. Day by day new upcoming banks are coming with many new services which a r e a threat for the bank. So increased number of new bank creates s e v e r competition in consumer service.

Recommendation:
As I have gone through all the departments under Premium Banking. I have come up with some points, which can improve the efficiency as well as quality of the work. The points are as below; Setting proper planning for each and every work as well as for the whole department. Designing jobs on priority basis. Assigning necessary manpower for every job. Proper maintenance of files and necessary files and documents on daily basis. Proper managerial observation and cooperation. Separating Card department and concern operation. Avoiding duplication through accuracy and efficiency. Developing motivational program and training program. Ensure that every one working in Software knows it properly and giving them personal ID. And most of all change of managerial attitude and view point. Need a separate PB lounge to save the customers time. Need a separate phone line service for the PB cline.

Conclusion:
We moved a long way from the time when the banks were deposit taking and money-l e n d i n g institution. The old concepts, attitudes and methods in banking h a v e undergone a marked change all over the world. Modern Banking is a n o u t c o m e development driven by changing financial activities and lifestyle. Bangladesh has not lagged behind. Banks are required to participate in the nation building activities and act as agent for bringing about socioeconomic changes. Entering as a new bank in private banking scenario of Bangladesh, BRAC Bank is constantly try to cross the obstacles regarding typical business oriented ideas and come up with innovative curtailed to its Consumers need to harvest maximum benefit for them. BRAC Bank Limited is a third generation bank inaugurated on 4 July 2001with a mission of providing best banking service in the country to enhance economic activity. In the world of global economy, banking needs have become more diverse a n d e x o t i c t h a n e v e r b e f o r e . I n t h i s r e g a r d B R A C B a n k p r o m i s e s t o f u l f i l l e v e r y possible Customer needs with high quality service and satisfaction. This success has resulted from the dedication, commitment & dynamic leadership of its management o v e r t h e periods. To become market leader in providing banking s e r v i c e s , introduction of sophisticated banking instruments i.e., online banking services, ATM services is a demand of time. BRAC Bank is maintaining its competitiveness by leveraging on its Online Banking Software and modern IT infrastructure. It is the p i o n e e r a m o n g s t t h e l o c a l b a n k s i n i n t r o d u c i n g i n n o v a t i v e p r o d u c t s l i k e S M S Banking.

Bibliography

http://bracbank.com/financialstatement/BRAC Bank Annual Report 2010.pdf .1 http://bracbank.com/company_profile.php .2 www.bracbank.com/php/include_gen .3 .Human Resource Manual of BRAC Bank Limited .4 Some information about HR from Md. ; HR Relationship Manager, Wholesale Banking .5 .Several Booklets & Newspapers from BRAC Bank Limited .6 Different types of products of BRAC Bank Limited i.e. Leaflets, Brochures, Synopsizes .7 .etc .Allan Price, Human Resource Management in a Business Context, 3rd Edition .8 .Ricky W. Griffin, Management, 9th Edition .9 Cynthia D. Fisher, Lyle F. Schoenfeldt, James B. Shaw Human Resource .10 .Management, 6th Edition David A. DeCenzo & Stephen P. Robbins (1999), Personnel/Human .11 .Resource Management, Third edition, Prentice Hall: London