Doha Bank-Strategic Market Plan - Example

Doha Bank-Strategic Market Plan Name: Institution: Date: Table of Contents Table of Contents 2 Executive Summary 3 2.0 Analysis 4 2.1 Vision and Mission Statements 4 2.2 Objectives 5 2.3 External Environmental Analysis 6 2.4 Industry Environment 8 2.4.1 Industry Rivalry 8 2.4.2 Consumers bargaining power 8 2.4.3 Suppliers Bargaining Power 9 2.4.4 Threat of Substitutes 9 2.4.5 New Entrants 10 2.5 Internal Analysis 10 2.6 Financial Analysis 12 2.7 Financial Analysis SWOT Summary 12 2.8 Options 13 2.8.1 Diversify Revenue Base 13 2.8.2 Increase Market Competitiveness 14 3.0 Choice 14 4.0 Action Plan 16 References 19 Executive Summary The report offers a strategic evaluation of the Doha Bank Company. In this case, the evaluation develops an analysis of both the internal organizational environment as well as the external environment and industry competitors such as the Commercial bank of Qatar. In the review, an external analysis establishes a growing market base potential while an internal analysis establishes an increased organizational capability. 1.1 Preferred Option Based on the analysis, this report develops a strategic recommendation for the adoption of services and products diversification. In this regard, the report argues on the merits and a rationale for increased products portfolio. In the execution of this strategic recommendation, the report develops a series of sequential and simultaneous actions such as internal audits, market surveys and innovative designs development. Through the application and execution of this option, the report concludes that the organization will be proactively acting against future Qatar financial industry changes. 1.2 Alternative Option Alternatively, the evaluation report argues that the organization can increase its market physical presence. In this case, the high capital base and large pool of qualified employees is cited as a key driving success facto for this alternative. In the execution of this approach, the organization can increase its branches and ATM market presence in the society. 2.0 Analysis 2.1 Vision and Mission Statements The bank has a strategic organizational mission of developing and enhancing the establishment of a banking industry in the largely unbanked Qatar economy. In this case, the bank established in 1979 was the second private bank in the nation’s capital Doha after the Commercial bank of Qatar, with a vision of increased banking in the nation into the future. The table below offers an analysis of the banks mission and vision components (“Doha Bank”, 2014, “About Us”). In its strategic mission and vision statements the Doha Bank organization has enhanced its increased overall success in the market through the development of a qualified employee base in the market. Moreover, it has developed a strategic green banking objective. In this case, the organization has advocated for proactive environmental conservation measures. In addition, a critical evaluation of the vision statement reveals that it highlights the organisations key competitive edge in the availability of untapped consumer base, and a strong and efficient management base, expanding its overall market success into the future (“Gulf Time”, 2014). Further, the banks vision was based on an economic orientation to promote societal gains. Thus, it showcase on the bans belief on social development as a means of economic gains and sustainable growth. Similarly, as a strategic measure the organizational approach to locate the venture in Doha as the capital city is a strategic explanation through which the Doha bank mission seeks to increase the overall economic objectives The mission advocates for self sustenance in that with it being a private company, the organization sought to reap revenues and profits from its increased market penetration and expansion in the Qatar and Middle East markets at large. As such, the vision aspires to use technology development to incorporate banking success in the economy. Additionally, the mission identifies with the Qatar and the middle east banking industry where banking was a new phenomenon (“Doha Green Bank”, 2014). Finally, an evaluation of the statements focus on the consumers established that they have clearly defined the organizational target consumer base, especially so by developing a unique focus on the unbanked Qatar population 2.2 Objectives In order to expand and increase its influence into the future, the organization has initiated and developed a series of objectives to expand its influence in the Qatar banking industry and across the global market. This report analysis section develops an analysis of the organizational objectives into the future. In this case, the report, develop a review of the objective and their achievement timelines. Objectives Expected achievement Year Global depository receipts The organization in the early 2006, initiated a development objective of listing its shares on the various international stock Exchange markets. In this case, it listed with the London exchange and New York Securities Exchange (“Market Watch”, 2014). Moreover, it expects to enlist with the Australian Stock Exchange markets by 2020. Mobile and Internet banking The organization has an objective of creating a paperless banking industry in Qatar. As such, it hopes to enlist an increased consumer base in the next three years on its internet and mobile banking platform, to increase service delivery quality as well as efficiency (“Doha Bank”, 2014). This objective is a strategic approach to ensure future market competitiveness with the growing technology changes in the market. Strategic Alliances The organization has adopted an objective of establishing market strategic alliances to expand its growth. This objective has developed over the years such as with the alliance with UNESCO to facilitate its environmental concern. The bank seeks to diversify its services and operations from the concentrated banking industry through such alliances in the market. Environmental Conservation The organization has developed a strategic approach through which it enhances environmental conservation onto the future in the next half decade (“Doha Bank”, 2014). The advancements towards the achievement of this goal is the establishment of the first green account. 2.3 External Environmental Analysis . Factor Discussion Technology The global market is gradually and drastically changing with the emergence of increased online banking has revolutionized the global banking industry. Technology will in the future affect organisations business operations and force them to shift onto the online platform (Nof, 2009). As a measure to target on these perceptive the Commercial bank of Qatar has initiated an online banking platform to enhance its continues global changes. Economic The global economic situation is changing in the market. One of the avenues is the changing Qatar economic growth, thus increasing the banking industry future growth potentials. In this case, the changes are likely to increase and expand on the probability of the organizational development. Moreover, this will stimulate the organization into developing new products to cater for the expected change of needs in the market. Legal/Political The global geo-political systems and alignments are changing with the propagation of free trade in the Qatar market especially from organisations in the Middle East. T Changes have opened up domestic competition to the organization thus need to increase its efficiency into the future. Socio-cultural The Qatar market is gradually changing. One of the changing aspects is the growing population in the nation from both local and a foreign worker has increased 2.2 million thus expanding the overall population base (“Trading Economics”, 2014). This will expand the organizational success base and consumer base into the future. International Increased international markets changing the global market landscape International business operations opening up increased competition avenues in the market. Examples such as strategic alliance that the organization has engaged in demonstrate the growing and expanding growth chances into the future. This will expand the organizational international presence and expansion into the future. Analysis Summary Opportunities Expansion to the global market Increased domestic market Political support Threats Increased domestic competition Technology changes costs Changing economic infrastructures 2.4 Industry Environment 2.4.1 Industry Rivalry An industry analysis of the concept lists the virtues and levels of competition and rivalry in the Qatar’s financial industry. In its review, the analysis establishes that one of the key industry competitors to Doha Bank is the Commercial Bank of Qatar. In this regard, as evidenced by the Financial times (2014), a growth rate evaluation demonstrates that the competitor has a relatively higher growth rate of 7.72% against the 7.0 by Doha Bank. Moreover, the evaluation concludes that competition between these layers is relatively high due to low consumer switching costs, high market concentration, reduced product differences as well as minimal industry diversification. However, the Doha bank has its key competitive edge in the high involvement of the stakeholders and proper and better information flow systems. Competition rate can be ranked at 8 out of 10 because of the high and intense rivalry experienced between the Doha Bank and the Commercial Bank of Qatar operations. 2.4.2 Consumers bargaining power An evaluation of the suppliers bargaining power establishes a combination of high and low bargaining edge. On one hand, the low switching costs, low outputs differentiation and the presence of substitutes increase buyers’ bargain. Similarly, factors such as low costs on buyers purchase and relevant supplier market information enrich their decision making process improving their overall bargain. However, an evaluation of factors such as buyers’ profitability, emerging backward integration and lack of involvement in decision making as well as household capacities in engagement reduce their overall bargaining power in the industry (Stickney, Brown & Wahlen, 2007). The overall consumers bargaining power is at 7 out of 10 in ranking because although he buyers bargaining power is high it is relatively reduced by the retail and low quantity proportions of each of the consumers. 2.4.3 Suppliers Bargaining Power The suppliers bargaining power in the Qatar financial market is reduced and minimal. This can be evidenced by instances such as reduced switching costs form a Doha bank account to the Commercial Bank of Qatar account, minimal inputs and outputs differentiation as well as changing technology trends. However, the bargain for organisations such as the Doha Bank has been increased through the development of a strong brand identity and inclusion of the stakeholders in decision making. Further, future changes in forward integration will increase suppliers bargain and industry control. The suppliers control is at 7 out of 10 by ranking values. This can be explained as a result of their high market dominance in the industry due to their limited supply and availability. 2.4.4 Threat of Substitutes Like any other global industry today, the treat of substitutes in the Qatar banking industry is relatively high due to factors such as low switching costs on loan bail outs and the low supplier buyer current relationships. However, factors such as the stability and expected industry products gains reduce the threats to the industry significantly. This can be ranked at 3 out of 10. 2.4.5 New Entrants The changing global dynamics in the industry have revolutionized and changed the global landscape. In this regard, factors such as favorable government policies and others of trade increase the threat. However, beneficial operational factors as enjoyed by the Doha Bank such as economies of scale and the control on the distribution channels as well as the high capital requirements reduce the new entrants the rest. This report ranks the threat as 4 out of 10. External Analysis Summary Factor Comment Strength Economies of scale due to its large capital base Qualified Workforce through its high employee value propositions. Weakness Low consumer relationships due to minimal marketing strategies Reduced population base that is relatively in Qatar Opportunities Increased forward integration with distributors in the industry Product diversification through offering non financial based products Threats New Entrants as a result of a free market base Increased substitutes threats with emerging technology and internet and mobile banking alternatives 2.5 Internal Analysis The Doha Bank organization has established an organizational corporation and team oriented culture. In this regard, besides developing and establishing high return on investment for the shareholders, the organization has developed a suitable working environment for its employees. In this case, the development of cross functional teams and a projects approach in its operations is one such culture development strategy. Through this strategic approach the organization has developed and established a strong and committed human base (“Forbes”, 2014). Moreover, its remunerations and support of the employees has increased its employment attractiveness through improved employee value propositions such as career development and internal social corporate responsibility programs on the employee families. An analysis of the organizational tangible assets establishes its strong financial base. In this case, the organization as of November 2014 had a market capital base in the excess of $ 15.66 billion thus indicating the overall organizational economies of scale. Moreover, an evaluation of the organizational physical resources establishes that the organisations branches’ and auto-branches indicate its huge physical resources base. On the other hand, an evaluation on the existing organizational intangible assets as already discussed establishes a wide qualified employees base who are in the excess of 677 employees demonstrate its market competitiveness. Moreover, its growing share value that has a 5.39% growth rate as of the year 2014 indicates the growing trend on the overall organizational reputation. Finally, an evaluation on the organizational innovation establishes that although it is innovative on environmental conservation oriented and technology application, it has minimal unique products development. Internal Analysis Summary Factor Comment Strength Qualified and experienced HR Good organizational reputation High capital base Weakness Low products differentiation Minimal technology application 2.6 Financial Analysis On one hand increasing current and quick ratios indicate that the organization can meet its short term liabilities and available assets for liquidation for investments if need be. On the other hand, a declining cash ratio indicates that the organization is increasing dedicating is current and quick ratio variables into investments over the years. Moreover, an increasing percentage of the total debt ratio and debit equity ratios indicate the increasing investments funded through debts exposing the organization to risks as well as an increasing organizational profitability through earnings comparison with the shareholders equity. Finally a return on assets analysis decline indicates declining returns per investment unit by the venture. 2.7 Financial Analysis SWOT Summary Factor Comment Strength High market capitalization against the Commercial bank of Qatar hat has a market capitalization of 22.21 billion Increasing profitability Weakness A low debt ratio indicating a low profitability probability Increased reliance on debts to fund the organizational projects exposing it to risks Increasing costs of production that is a shared financial weakness with its competitor the commercial bank of Qatar. Opportunities Increased market base through increasing cash and quick ratios allowing the venture increased flexibility. Automation of financial review systems due to its increased IT application on financial management unlike the commercial bank of Qatar Threats Threat of revenue reduction due to increased competitors influence such as the commercial bank of Qatar that has an annual growth rate of over 6% Substitutes emergence in the market with alternatives to increased internet banking 2.8 Options 2.8.1 Diversify Revenue Base As evidenced in the analysis of both the market external and internal organizational environments, it is evident that the revenue streams from the market are bound to decrease into the future. This especially so due to increased similar products development in the market. Therefore, this report concludes that the organization has a strategic option of increasing its revenue streams to ensure earnings ad revenue base stability into the future 2.8.2 Increase Market Competitiveness A second option for the venture is to establish a new competitive edge in the market through increased expansion. In this regard, besides developing additional products, an expanded widespread in the market will allow the organization tap and gain from the massive and large as well as growing Qatar financial market population. This option recommends increased physical presence in the market. 3.0 Choice Based on the above developed recommendations, this report recommends the choice for the first option on increasing revenue streams. As Vithessonthi and Thoumrungroje (2011) stated, it is imperative for organisations to apply strategic management. In this case, one of the most vital components of strategic management is the application of planning. In this case, planning involves the evaluation of current organizational capabilities and aligning them with the expected and forecasted future changes in the market. As such, this report concludes that the Doha Bank can insulate its revenues and market success through a market base diversification. The proposed diversification will incorporate and include the strategic process of developing new products in the market. One of the commonly noted challenges on reduced organizational industry bargaining edge is the concentration and similarity of the offered products. Therefore, in order to strategically increase the overall competitiveness, the organization should strive to develop and establish products that are unique. As such, the products would propagate the increment of switching costs. Thus, this would ensure that into the future, its consumers remain loyal ensuring on its earnings stability. Such a development would have numerous positive implications on the organizational operational costs. In this regard, Lee and Cunningham (2001) noted that there is a direct relationship between organizational marketing costs and consumer loyalty. In this case, the evaluation noted that high consumer loyalty levels reduced the costs of marketing and subsequently the production costs. Based on this argument, this report asserts that through the development of new diversified financial products and the subsequent earning of consumer loyalties, the organization will reduce on its production costs. Subsequently, this will offer it’s a production cost effectiveness advantage over competitors such as the Commercial bank of Qatar into the future. In addition, the application of this strategic recommendation will ensure that the organization increases its market influence. Currently, it is expected that favorable market situation will promote increase new entrants into the industry. Thus, in order to reduce on the concentration challenge, the report argues that products diversification and inter industrial investments will serve as a proactive strategic measure for the Doha Bank organization. In this regard, the report adopts the argument as developed by Bauer (2003). In the review, the study asserted that in order to facilitate increased product launch and development success, organisations should consider initiating a demand pull market strategy. In this regard, the developed products should be based on the existing and projected future society needs. One of the key merits of this method application to Doha Bank is that it will promote the organizational strategy to increased forward integration and as well reduce on its marketing costs. Therefore, key among the approaches to be adopted in the implementation of this option will include consumer surveys to evaluate and establish the existing, forecasted and changing consumer trends and preferences in the market. Therefore, this will allow the organization to tap on the first consumer decision making stage on need identification and subsequently develop products and services that meet and surpass the consumers’ needs and expectations in the industry. 4.0 Action Plan This action plan illustrates in brief the various functions and actual actions that the organization is in the process and must undertake into the future as an approach and avenue of ensuring that it achieves and successfully implements the recommended revenue streams diversification option recommendation as discussed in the report. No. Action Due Owner Status 1 Internal organizational capabilities analysis. This includes an audit evaluation on the organizational tangible and intangible resources as well as their suitability in executing the needed organizational change 2014 The administration function The action is in progress and the department produces annual audit reviews 2 Evaluation of alternative market portfolio and the various consumer segments that the organization can increase and develop focus onto into the future 2015 The production function In progress. The function is evaluating any viable products addition to its current portfolio 3 Conducting market surveys to establish consumer needs and wants in the market 2016 The sales and marketing function Will commence once the evaluation of alternatives action is fully executed and findings and recommendations approved by the executive management 4 The evaluation and development of products and services meeting and satisfying the respectively established consumer needs and systems in the market 2016 The research and design function The action execution will be based and built upon the market survey findings established in the organization 5 Establishment of market alliances with the organizational distributor. These alliances will enhance and promote the development and establishment of proper appropriate and cost effective systems 2016 Public relations The function will establish alliances in the market especially in the distribution supply chain to assert organizational influence and control in the banking industry 6. Market reviews and performance evaluation. These reviews will enables the organization evaluate the success of the developed products and consequently develop the desired and relevant proactive corrective systems to increase its overall performance and success. 2015 The sales and marketing function This will be a continuous and recurrent process executed by the function on an annual basis to ensure the continuous improvement process application on the organizational systems into the future. References Bauer, S. M. (2003). Demand pull technology transfer applied to the field of assistive technology. Journal of Technology Transfer, 28(3-4), 285-303 Doha Bank, (2014). DBank Online. Retrieved from < http://www.dohabank.com.qa/1/db2/en/Personal/AlternativeChannels/DBankOnline.aspx> Doha Bank, (April 01, 2014). Doha Bank wins ‘Environmental Award’ from The Arab Organization for Social Responsibility. Retrieved from < http://www.dohabank.com.qa/1/en/MediaCenter/PressRoom/tabid/631/articleType/ArticleView/articleId/840/Doha-Bank-wins-Environmental-Award-from-The-Arab-Organization-for-Social-Responsibility.aspx> Doha Bank, 2014, About Us. Retrieved from < http://www.dohabank.com.qa/1/db2/en/Home/AboutUs.aspx> Doha Green Bank, (2014). Green Banking. Retrieved from < http://www.dohagreenbank.com/en/Home.aspx> Financial Times, (2014). Commercial Bank of Qatar QSC. Retrieved from < http://markets.ft.com/research/Markets/Tearsheets/Forecasts?s=CBQK:DSM> Forbes, (2014) Doha Bank Employees. Retrieved from < http://www.forbes.com/companies/doha-bank/> Gulf Times, (2014). Doha Bank posts QR1.31bn ’13 profit on robust lending. Retrieved from < http://www.gulf-times.com/business/191/details/378446/doha-bank-posts-qr1.31bn-%E2%80%9913-profit-on-robust-lending> Lee, M., & Cunningham, L. F. (2001). A cost/benefit approach to understanding service loyalty. Journal of services Marketing, 15(2), 113-130. Market Watch, (2014). Doha Bank QSC. Retrieved from < http://www.marketwatch.com/investing/stock/dhbk> Nof, S. Y. (2009). Springer handbook of automation: With DVD-ROM and 149 tables. Berlin: Springer. Stickney, C. P., Brown, P. R., & Wahlen, J. M. (2007). Financial reporting, financial statement analysis, and valuation: A strategic perspective. Mason, OH: Thomson/South-Western. Trading Economics, (2014). Qatar Population. Retrieved from < http://www.tradingeconomics.com/qatar/population> Vithessonthi, C., & Thoumrungroje, A. (2011). Strategic change and firm performance: The moderating effect of organizational learning. Journal of Asia Business Studies, 5(2), 194-210. Read More