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Strategic Management Project.pptx

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Strategic Management Project.pptx

  1. 1. Strategic Management Project ANALYSIS OF NATIONAL BANK OF EGYPT STRATEGIC MANAGEMENT PERFORMANCE
  2. 2. NBE Current Performance During FY 2019/2020, NBE managed to achieve unprecedented performance indicators. Total deposits reached EGP 1.6 trillion as at end-June 2020, with a growth rate of 36% yoy, accounting for 34% of total banks' deposits. Such a leap was driven by the introduction of a diversified package of deposits in local and foreign currencies at competitively lucrative rates. NBE's deposits approached EGP 2 trillion as at end-March 2021, which highlights the customers' confidence in our Bank.
  3. 3. NBE Mission & Vision To remain the leading entity in the Egyptian banking sector, NBE aims to maximize the efficiency of financial intermediation and promote financial inclusion, while safeguarding depositors' funds and maximizing returns to shareholders. This in return supports the development of the national economy and enhances the stability of the financial system. The NBE has the top spot for customer satisfaction, thanks to its large number of corporate clients and spending on technological infrastructure and its geographic presence, especially its ATM network, which is the biggest in Egyptian’s banking sector.
  4. 4. NBE Strategic “corporate” objectives ➔ The Bank's strategic objective is to be the best commercial bank locally and regionally through its spread and its reach to the largest number of customers through the diversification of its banking services and the opening of many branches inside and outside the country. ➔ In the framework of supporting and developing performance to maintain this distinguished status, many development programs are being implemented in cooperation with major international institutions. ➔ Improve the flexibility and ability to adapt to internal and external environmental variables by 33% ➔ Developing methods and methods of obtaining information to increase opportunities by 25% ➔ Reducing admin centralization & improving organizational structure by 66% ➔ work to increase the satisfaction of individuals and develop methods of work in the spirit of one team by.
  5. 5. Situational Analysis SWOT Analysis: Strengths Weaknesses  Strong Reputation and brand presence  Considerable international presence  Large organizational size and scale,  Wide scope of financial services  Business leadership across financial segments  The importance of the bank for the Egyptian economy and the banking sector in particular,  holds a relatively high NPL ratio.  Technical outages  It has some risky portfolios  Due to increased number of competition networks, the company has experienced drop in SME loans market share in recent time. Opportunities Threats  the possibilities of technical assistance from the international institutions  the gradual transition to paperless money  Activate many promising economic fields  The Bank's vital role in financing foreign trade  State interest in modernizing the banking system.  Presence of high geographic risk  As a lender, it is exposed to credit risk as deteriorating credit quality  It must also look into the threats posed to its IT infrastructure
  6. 6. NBE Opportunities & threats Table Task Environment: (Industry analysis) Factors Opportunities Threats Customers  Enhancing Products & Services with Mobile App Data  Automated Onboarding  Far-reaching digital transformation is needed – now. Suppliers  Move to in house operations  Attract new depositors  Tech Suppliers do long-term contracts, obscure the pricing, & charging costly fees to change platforms. Competitors  With new laws aiming for bank consolidation, NBE can merge with struggling institutions to further enlarge their assets  new entrants are able to be nimbler than NBE since they are unencumbered by legacy infrastructure or business models. Retailers/Distributors - - Government New Regulations Economic growth  Higher interest rates Others  Recession
  7. 7. NBE Opportunities & threats Table General Environment: (STEEP Analysis) Factors Opportunities Threats Socio-cultural  Digital area  Globalization  Shifting away from traditional banks Economic  Growth  Recession  Higher Interest Rates  Higher National Debt  Lack of foreign Liquidity Political/Legal  Stability  New laws strengthen the market & benefit big banks  Political Instability  Public unrest  Foreign sanctions Technological  Blockchain  E-payment  Mobile services  Security  Loss of data  3rd party dependency Ecological - -
  8. 8. NBE Issues Priority Matrix Probable Impact on Corporation Probability of Occurrence High Medium Low High High Probability:  Higher Interest Rates  foreign- currency liquidity High Probability  Local-Currency Sovereign Debt  Asset-Quality Medium Probability:  Failure of tech infrastructure Medium High Probability:  Recession Medium Probability:  Regulation & Compliance Low Probability:  Fraud Low Medium Probability:  Foreign Sanctions Low Probability:  Cyber Security Low Probability:
  9. 9. EFAS Factors Weight Impact (1-5) Weighted Average Comment Opportunities  Making use of the possibilities of technical assistance 0.05 1 0.05  The gradual transition to paperless money 0.2 2 0.4  Activate many promising economic fields 0.4 2 0.8  Significant growth is person-to-person (P2P) Payment 0.1 4 0.4  State interest in modernizing the banking system 0.03 1 0.03 Threats  Presence of high geographic risk due to the political instability in Egypt 0.3 4 1.2  As a lender, it is exposed to credit risk as deteriorating credit quality 0.1 2 0.2  The threats posed to its IT infrastructure as more competitors are moving towards becoming complete internet facilities. 0.17 1 0.17 Total 1,00 3.25
  10. 10. Description of the Company Established on June 25, 1898, the National Bank of Egypt is the first and largest commercial bank in the Egyptian banking sector with a paid-up capital of EGP 50 bn. The bank has the largest widespread network of branches and outlets with 584 branches and captures the largest 24/7 ATM network.
  11. 11. Analysis of NBE Organization Structure: The U-Form Structure
  12. 12. NBE Organizational Analysis “Strengths & Weaknesses Table” Factors Strengths Weaknesses Organizational Culture  Keeping the customer front and center  The proposed introduction of the (IAF) Framework  NBE has the task type culture which supports its size Post-Covid work environment Employee voice gets lost Culture change is not being measured Organizational Structure Productivity. Functional specialization increases productivity through effective division of labor. Cost savings. Compared to other configurations, the costs of staffing each department in a U-form structure are significantly lower. Progressive reduction in the ability of management to control its size. Narrow focus. of senior managers. Product Mix: Product Price Place Promotion  Strong Promotional Prescence  Cheapest prices due to economics of scale  Widest network of branches & partners  Sell all types of financial products sold in the market Not enough promotion directed into corporate banking Operations  Largest network of operations personal  Largest Database  Strong ties with the governmental organizations Data fragmented across many divisions Bureaucracy and slow flow Research & Development  Innovative new campaigns  Law cost compared to competition No new innovative products Financial Strong financial position buffer that absorbs losses & reduces the probability of failure. Compat unpredictable Market forces The steady-state costs of higher capital requirements HR facilitate new collaborations foster new skills Not a catalyst for change Adopt a traditional mindset and accountability toward their people, their business Information System Strong Team through alliance and spin offs Large strong infrastructure New services offered Not on global standard
  13. 13. NBE Internal Factors Analysis Table “IFAS” Factors Weight Impact (1-5) Weighted Average Comment Strengths:  Strong Reputation and brand presence 0.3 4 1.2  Considerable international presence 0.05 1 0.05  Large organizational size and scale, including multinational business operations 0.2 4 0.8  Wide scope of financial services 0.1 3 0.3  Business leadership across financial services segments 0.05 2 0.1 Weaknesses:  Holds a relatively high NPL ratio. 0.1 2 0.2  Technical outages impacting customer experiences 0.05 1 0.05  It has some risky portfolios which have generated losses in the past 0.1 2 0.2  Total liabilities of the bank have increased over the past years and as a result of this it faces more cash outflows in the form of interest payments 0.05 2 0.1 Total 1.00 3
  14. 14. VRIO Analysis of Competencies & Competitive Advantage: Resource/ competency Valuable Rare Costly to imitate Ready classification Number of Branches Sustained advantage ATM Network ✔ ✔ Sustained advantage Skilled Labor ✔ � Competitive Parity Strong Brand Name ✔ Sustained advantage Strong Client Base ✔ ✔ Sustained advantage IT Infrastructure ✔ � Competitive Parity Global Reach � Competitive Parity
  15. 15. NBE Value Chain:
  16. 16. NBE Mission Review: When Reviewing the NBE mission for the successful mission characteristics as the mission contains all successful characteristics like being feasible it’s also precise and very broad with a single goal that was stated in the very beginning of the mission which is remaining the leading entity in the Egyptian banking sector. NBE’s mission is very clear and highly emphasize on efficiency which makes it very motivating for members of the organization and of society.
  17. 17. NBE Objectives Review:
  18. 18. Internal Environment Analysis
  19. 19. Strategic Sweet Spot
  20. 20. NBE TWOS Analysis External Internal Opportunities: The possibilities of technical assistance from international institutions The gradual transition to paperless money Many promising economic fields. State interest in modernizing the system. Significant growth is person-to-person Payment Threats Presence of high geographic risk deteriorating credit quality. Competitors are moving towards becoming complete internet banking facilities. Strengths: Strong Reputation International presence Large organizational size Variety of services Business leadership OS Strategies:  Financial inclusion  Target the unbanked  Introduce new products & service  Simplify work procedures  Diversify delivery channels  Support CBE & government initiatives  SMEs Initiatives  Mortgages Initiative TS Strategies:  Improve margins  Increase low-cost deposits  Concentrate on highly profitable products  Maximize non-interest income  Revisit fees & commissions  Increase cross selling activities  Sale of asset  Divestment from non-strategic Weakness: high NPL ratio. Technical outages Risky portfolios drop in efficiency Inability to utilize its brand name effectively OW Strategies:  Digital banking  Develop & deliver new products  Expand on Mobile Banking services  Introduce Smart Branches TW Strategies:  Reduce concentration risk  Decrease loans portfolio concentration  Seek new facilities in Foreign Countries
  21. 21. NBE Generic strategy “Cost Leadership Strategy”
  22. 22. NBE cooperation agreements & entry modes in foreign countries NBE enters all types of cooperative agreements with all sorts of organizations to undertake a project under which joint action or collaboration between the NBE and the collaborator during project performance is considered necessary or desirable to achieve successful project implementation. greenfield strategy
  23. 23. NBE Corporative Strategies Joint Venture Equity Strategic Alliance Non-equity Strategic Alliance
  24. 24. NBE Corporate Strategies:
  25. 25. NBE strategy implementation problems  Top-down or laissez-faire senior management style  Conflicting priorities  Poor vertical communication,  Poor coordination across functions, businesses or borders,  Inadequate down-the-line leadership skills and development.
  26. 26. NBE Structure Compatibility to the Strategy This study established that in NBE, the organization structure aligns with strategic objectives and has high effect on the service delivery to customers. Another finding was that the organization structure had a very high effect on compliance with regulations and a high effect on the attainment of the expectations of NBE community. It’s also worth indicating that the organization structure had a high effect on the growth of investments at NBE. Another finding indicated that the organization structure had a high effect on the response rate to competition, technological changes, economical changes and socio-cultural changes at NBE. Lastly, the findings also indicated that the organization structure had a moderate effect on the response rate to political changes and natural factors.
  27. 27. Samples of NBE strategy implementation actions plan Action plan Objective (1): financial inclusion Actions Due date By Comment Better understanding of the barriers to financial inclusion & resilience 1st Mar 2018 Change Management & Technology Committees Staff better able to identify & support vulnerable groups 1st June 2018 HR Committees & HR Department Targeted & scalable resources to build financial knowledge skills 1st August 2018 HR Department improved support for "at-risk" customers, staff, suppliers and community 1st September 2018 Control Committees / Credit & Settlement Committees Appropriate financial services are available, accessible & known 1st December 2018 Change Management & Technology Committees
  28. 28. Evaluation & Control Goals Status Corrective Actions FINANCIAL INCLUSION Target the unbanked  Introduce new products & services  Simplify work procedures x Staff Training Diversify delivery channels  IMPROVE MARGINS Increase low-cost deposits  Concentrate on highly profitable products x Develop Better tactics DIGITAL BANKING Develop & deliver new products  Expand on Mobile Banking services  Introduce Smart Branches x Investigate reasons of the delay SUPPORT CBE & GOVERNMENT INITIATIVES SMEs Initiatives  Mortgages Initiative  MAXIMIZE NON-INTERST INCOME Revisit fees & commissions x Changing Control committee priorities Increase cross selling activities  Sale of asset  Divestment from non-strategic investments  REDUCE CONCENTRATION RISK Decrease loans portfolio concentration x Nothing for now Seek new facilities in FC 
  29. 29. Corrective Actions: Adjusting the formulation (design) Adjusting the implementation
  30. 30. SWOT Analysis
  31. 31. Summary & Conclusion The National Bank of Egypt is the first and largest commercial bank in the Egyptian banking sector with a paid-up capital of EGP 50 bn. NBE activities focus on sustainable development. It aims to reach a balance between economic, social, and environmental considerations. It pumped around 20 billion investments in Egypt during 2020. It develops and upgrades infrastructure all over the country. Environmental analysis of NBE concluded many changes in Egyptian market.
  32. 32. THANK YOU

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