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A vision statementÂ is sometimes called a picture of your company in the future but it's so much more than that. Your vision statement is your inspiration, the framework for all your strategic planning.
Vision of National Bank of Pakistan
"To be recognized as a leader and a brand synonymous with trust, highest standards of service quality, international best practices and social responsibility."
Definition of Mission:
A mission statementÂ is a brief description of a company's fundamental purpose. A mission statement answers the question, "Why do we exist?"
The mission statement articulates the company's purpose both for those in the organization and for the public.
Mission Statement of National Bank of Pakistan
NBP will aspire to the values that make NBP truly
the Nation's Bank, by:
Institutionalizing a merit and performance culture
Creating a distinctive brand identity by providing the highest standards of services
Adopting the best international management practices
Maximizing stakeholders' value
Discharging our responsibility as a good corporate citizen of Pakistan and in countries where we operate
Evaluation of Vision Statement
The vision statement of National Bank of Pakistan is sturdy and strong. It has a logical and orderly flow in it. It consists of three parts and all have aesthetically consistent relation. This shows the power of seeing ahead of NBP and virtue of planning. The first part of Vision Statement covers the foreseeing of NBP as it wants to be recognized as a leader and a brand synonymous with trust.
The vision statement has the capacity to understand a broad range of topics. It is according to give response to the change in market places. The third part shows the breadth of the vision of NBP as it is covering international best practices as well as social responsibility.
The uniqueness in vision statement of NBP is that it wants to carry out best international practices in there operations.
Future opportunities are clearly identified with a proper line of action. National Bank of Pakistan see itself a leader in its filed and for this purpose it will apply international best practices to be recognize as a leader. The core competencies of this organization are highest standard of integrity, team work, excellence in work, advancement of skills for tomorrow's challenges and value creation for all stakeholders.
Evaluation of Mission Statement
The mission statement of NBP summarizes its basic policies for realizing its goals and states the important goals that employees must strive to meet. This statement is given in points and is very specific and attainable. For the employees it suggested adopting the best international management practices and for shareholders to maximizing there values. This statement is flexible enough to response in market and environmental changes.
PEST analysis is a scan of the external macro-environment in which an organisation exists. It is a useful tool for understanding the political, economic, socio-cultural and technological environment that an organisation operates in. It can be used for evaluating market growth or decline, and as such the position, potential and direction for a business.
Political factors: These include government regulations such as employment laws, environmental regulations and tax policy. Other political factors are trade restrictions and political stability.
Economic factors: These affect the cost of capital and purchasing power of an organisation. Economic factors include economic growth, interest rates, inflation and currency exchange rates.
Social factors: These impacts on the consumer's need and the potential market size for an organisation's goods and services. Social factors include population growth, age demographics and attitudes towards health.
Technological factors: These influence barriers to entry, make or buy decisions and investment in innovation, such as automation, investment incentives and the rate of technological change
PESTEL ANAYLSIS OF NBP
Privatization policy and deregulation.
Impact of subsidized credit affecting and NCB's.
Employment practices, Unions, Associations.
Political Interference and harassment.
Incidents of high taxation on banking industry.
Constraints in mobilization of public savings because of inflation.
Operating cost is very higher because it is treated manually.
Increasing of bad debts
SOCIAL & CULTURAL:
Inadequate human resources.
Cultural strain to savings.
Declining education and work ethics.
Inadequate communication infrastructure.
Inadequate computer facilities.
Inadequate IT training.
Lack of IT equipment.
Strategic analysis tools
Definition and concept
Strategic Analysis is:
The process of conducting research on the business environment within which an organisation operates and on the organisation itself, in order to formulate strategy.'
BNET Business Dictionary
A theoretically informed understanding of the environment in which an organisation is operating, together with an understanding of the organisation's interaction with its environment in order to improve organisational efficiency and effectiveness by increasing the organisation's capacity to deploy and redeploy its resources intelligently.'
DEFINITION OF SWOT
A SWOT analysis is a simple but widely used tool that helps in understanding the strengths, weaknesses, opportunities and threats involved in a project or business activity.
It starts by defining the objective of the project or business activity and identifies the internal and external factors that are important to achieving that objective. Strengths and weaknesses are usually internal to the organization, while opportunities and threats are usually external.
SWOT ANALYSIS OF NBP
SWOT Analysis is an acronym used for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are the initial strength and weaknesses of an organization, whereas opportunities and threats are the external one.
NBP is high profitable organization.
The only bank providing the advance salary account up to 10 months.
NBP uses the fastest ways of money transfer.
High liquidity is strength of NBP.
People have more confidence in NBP due to strong government support.
NBP is a very sound financial institute.
Role in national economic development.
Bank with more deposits than any other commercial bank.
Recognition of the hard work of staff through incentives.
Intellectual commitment to change.
NBP has a good staff combination on the basis of experience, but their training capabilities are not up to the requirements of the fast changing banking environment.
The customers' relations of the NBP staff are much weaker as compared to other private banks.
Long term contacts are not maintained with customers.
Most of the staff is from families with strong political background so it is very difficult to remove them or punish their negative behavior.
The technical training of the staff is negligible e.g. in case of absence of the computer operator there is no alternate trained person who can record the daily transactions.
The organization is very much mechanistic and provides no flexibility to encourage creativity.
The lower staff is non-cooperative as compared to the lower staff of other branches. The control of manager is not effective.
The discretionary powers of manager are very low to offer more incentives and value added services to its customers. There is a lack of commitment and professionalism on part of the employees. The staff is always in a hurry to leave the bank as soon as possible. They were also observed to be starting their operations comparatively late. The organizational culture is not cooperative and friendly. Nepotism was observed on part of the manager as well as the top management towards some staff members.
The level of technology management in the branch is very low. The technology available is not maintained well mainly because of the lack of technically trained staff. In spite of the presence of technology many jobs are done manually such as the letters, fax messages and other calculations, which could be easily, done in MS Word and MS Excel.
The job distribution is not up to the mark. The immediate result of this is inefficiency and delay in work. The filing system is not up-to-date.
Much time is wasted while searching for even a week old document.
The staff spends more time in collections than required. The bank collections are usually late because of the non-availability of staff.
No efforts are made to recover the outstanding debts. There is no facility for complaints and suggestions.
Customers coming to the Bank for TTs, TCs etc. are not received with open hearts and thus deprive the bank of revenues.
There is a lack of functional and proper research and development, which could scan the micro and macro environmental data for future planning and strategy.
Financial audits are conducted but operational audits have not received proper attention as much as it should get.
There is no procedure, which could encourage the middle and lower level management to initiate creativity.
The lack of professional bodies is a major weakness.
Instructions are not conveyed systematically but rather than casual manner.
New marketing strategies to invest money in new projects.
There is a great opportunity for NBP in field of micro finance.
Privatization of NBP.
There is a good opportunity to utilize the skill of educated young talent for the enhancement of business.
Advance is the main area, which has a tremendous potential in the share of profit. This area can be profitable for the organization.
Wide range of products and product line can enhance the business.
Hiring the new MBA's, new talent which can control the administrative expenses.
The biggest threat to the operational success is the better competitors' services. Many private sector banks are offering higher rates of return to customers than NBP.
The banks in the neighborhood of NBP have become online e.g. Union Bank, Habib Bank, Muslim Commercial Bank and Standard Chartered Bank, while it lacks this.
Cannibalization of profits is yet another threat to the success of NBP. The branches of NBP are located very close to each other. All these branches are taking away each other's customers.
One of the biggest threats to the NBP is the increasing rate of dissatisfy customers. Most of these customers were observed to be dissatisfied with the delays in their services.
The greatest threat to the performance of NBP is the decreasing morale of employees. They feel that they are not provided with bonuses, they are not given proper attention to have a say in the meetings.
High-pressure interest groups are developing which poses a constant threat to NBP.
Establishment of new private financial institutions and expansion.
Merger of some of financial institutions.
New products from private Pakistani and Foreign Banks.
Quality of human resources.
Porter's FIVE FORCES MODEL:
This approach is widely used for competitive analysis. It is because of the high intensity of competition among companies there five main competitive forces.
Rivalry among competitive firms:
It is a very powerful force among the competitive forces the strategies pursued by one firm can be successful only to extent that they provide competitive advantages over the competitor. These competitive strategies may be lowering prices, best quality series. The NBP offering very low charges an demand draft, telegraphy transfer, mail transfer and give other additional services to the customers and to the Nation because NBP is a "Nation's Bank".
Potential entry of new competitors:
Whenever new firms ca easily enters a particular industry, the competition increases. The gout restriction, tariffs, patents etc can stop new firm to enter into the business as per Banking industry is concerned this market is already very situated in Pakistan and there are banks with quality services and low charges. So there is no threat to NBP from potential entry and NBP is also a public sector bank and no other new banks can take over it
Potential Development of substitute products:
This is the third factor affecting the competitions. There may be some other product can be substitute the product of that industry. For example banks offering sawing schemes in Pakistan and these schemes are also offered by GPOs in Pakistan so they must compete them in this field. If they offer low rates than GPOs so people will go to deposit in GPOs. People concentration high rates so that's why sawing PLS accounts are more then current accounts. The next examples will ATM which substitute presenting cheques at counter and encash it. The NBP is lacking in this field. It must improve in this field to compete the competitors.
Bargaining Power of Suppliers:
The bargaining power of supplier affects the intensity of competition, especially when there are a large number of suppliers. In case of banks the suppliers are customers they supply the money to banks. Now they must offer good services, quality, and safety and low charges etc to customers. In this field NBP is very good. B/C at offers good quality services to customers. They charge low charges on remittances. So that's it is competitions other banks.
Bargaining Power of Consumers:
When customers are concentrated or large, or buy in volume, their bargaining power represents a major force affecting intensity of competition. Now the number customers in Pakistan for banks are very high. Banks is offering variety of products and services to their customers. NBP have a large number of customs. Now it must offer good services and products to their customers to attract them to come to NBP.
Definition of Stakeholder
Person,Â group, or organization that has direct or indirectÂ stakeÂ in an organization because it can affect or be affected by theÂ organization'sÂ actions,Â objectives, andÂ policies. Key stakeholders in aÂ businessÂ organization includeÂ creditors,Â customers,Â directors,Â employees,Â governmentÂ (and itsÂ agencies),Â ownersÂ (shareholders),Â suppliers,Â unions, and the communityÂ from which the business draws itsÂ resources. Although stake-holding is usually self-legitimizing (those whoÂ judgeÂ themselves to be stakeholders areÂ de factoÂ so), all stakeholders are not equal and different stakeholders areÂ entitledÂ to differentÂ considerations. For example, aÂ firm'sÂ customers are entitled to fairÂ tradingÂ practicesÂ but they are not entitled to the same consideration as the firm's employee.
Stakeholders of National Bank of Pakistan
Being a very large organization National Bank of Pakistan has a large number of stakeholders. A list of stakeholders of NBP is given below.
Board of Directors
State Bank of Pakistan
Influence of Stakeholders
The shareholders contribute as voters for election of directors after the expiry of their previous terms. They can take part as voters in the election of directors on the specified date in the extra ordinary general meeting of the company announced by the company secretary.
The elected members of Board of Directors formulate strategies for the organization.
State Bank of Pakistan is a regulatory authority for all banks in Pakistan. It monitors the operations and planning of NBP. This regulatory has a strong influence in making the strategy of the bank.
Employees can affect the strategy by their working effectiveness and efficiency. If the employees are more motivated and hardworking then they can achieve the organizational future goals in better way turning it in profitable organization.