The Bank of North Dakota - Management, Marketing, and Financial Analysis - Report Example

Name: Course: Tutor: Institution: Date: Company Analysis Paper Company Profile The Bank of North Dakota is a publicly owned bank with its base headquarters in the USA West Bismark in the North Dakota State region. In this regard, the venture has its offices in the respective cities and towns around the North Dakota State. Historically, the bank was established in 1919 as a bid to supplement the public banking entities in the region, with an aim of ensuring that it finances and supports business operations in the region through the provision of sustainable and risk free lending facility services especially in the agriculture,and business industries in North Dakota (“BND” 14). As such, the venture operates and has evolved over the years from State government funding at the start up of its operations, to its full sustenance and independence in the recent past, with the profit margins adopted to expand and finance its operations. The organizational mission is to retain and sustain US economy and especially the regional based jobs through financing and facilitating the development and enlargement of small and medium business enterprises in the region. As such, this is based on vision to develop a system through which such overlooked market stakeholders are offered a financial and capital base to expand and sustain their operations into the future. In this regard, although the venture operates in the financial industry, its operations are different from the conventional financial institutions in the market. As such, while as the core aim of peer organisations in the market is to earn profits, the venture is guided and operates under the virtues of social responsibility and equality among the commercial stakeholders. Therefore, this increases the organizational capability to retain and establish a competitiveness as its core aim is not to compete with other private financial lenders, but instead to supplement and support their services and products in the market. Management Analysis Although the venture has had numerous CEOs since its inception and establishment in the North Dakota State, its current CEO is Eric Hardmayer. As such, a common quality and feature among the organizational CEOs is the concept of possessing a financial background as a basis of developing relevant strategic organizational decisions rather than basing their appointment on the political influence and affiliation. In this regard, instead of reporting directly to a board of directors as in the case of private banks in the industry. Instead, the venture CEO reports to a commission appointed by the governor to oversee the respective industry operations and functioning (“BND para 4) comprising of the governor, the Attorney General and the Agriculture Commissioner. Therefore, although specialized in its operations, the venture is managed through an expert commission to ensure that public interest and concerns are catered and taken care of in the market In its management structure, the highest management organ in the venture is the commission appointed by the governor to oversee the organizational operations. Besides the commission, the CEO is the chief operations officer in charge of the strategic management and operations in the venture. Others in the organizational management structure include the departmental heads and other bank employees charged with the daily operations in the respective bank branches. In this case, the venture is administered and managed on a basis of the lending, banking and treasury services departments, with each headed by a branch manager and respective support employees in the market. Therefore, although serving as the only publicly owned bank in the region, the venture operations and management structure in its branches and departmental administration have been aligned to the private business ventures as a tool to increase the experienced market competitiveness and success. With regards to its employee base, the organization has developed an employee value proposition through its cultural diversity in that the employees have the opportunity to attract with peers from across the cultures and as such improve its career development opportunities into the future. Moreover, in order for one to qualify as an employee in the venture one must possess a cross cultural tolerance approach to ensure cultural tolerance and good customer care and efficiency by the organizational venture. Nevertheless, labor management and regulations have faced a growing challenge in the organizational branches. In this case, besides the professional approach in employing staff, political arguments have been alleged that the employment and recruitment process in the venture is politically inclined in favor of the State government in power, thus causing a high employee turnover rate in congruence with the State elections. Marketing Analysis The Bank of North Dakota provides a wide range of products and services to its consumer base. On one hand, the bank offers financial products in the form of loans to organisations and business ventures that have been overlooked by the private industry lenders. In this case,private bank’s operations and funding process are based on the need to increase and maximize their individual organizational profitability margins. Therefore, based on this concept, the private banks only advance and extend loan services to ventures offering an opportunity to increase loan repayment rates and repayment guarantee. However, a majority of the small and medium business organizations pose an increased lending risk and expose the respective ventures to the threat of loan repayment. Therefore, The Bank of North Dakota was established to cover the Dakota State region and especially focus on a market segment comprising of potential and promising SMEs with no ability to acquire and secure loans in private financial lending institutions in the region. In its marketing strategies, the bank has increasingly applied to the market differentiation approach which, according to Miltenburg (21) increases venture market competitiveness. In this case, the venture has over the decades sought to finance the largest market proportion ignored and overlooked by private bank lending agencies. For instance, the organizational statistics indicated that the venture lent out 90% of its clients were small businesses that are often overlooked by private industry lenders, perceiving them as a high risk nature, with the probability of loan default, thus reducing their market attractiveness in the industry. Therefore, the adoption of this strategy and the subsequent reduction on the organizational competitors in the industry has served as its key driving and success factors. Financial Analysis A review of the organizational, financial statements, namely the balance sheet as well as the income statement accounts illustrates a growing earnings trend. In this regard, an evaluation of the balance sheet illustrates a growing asset based from $6.155 million in 2012 to $ 6.873 million in 2013. Similarly, an evaluation of the venture income statement illustrates that the net income value has increased to $94.215 million in 2013 from the previous $ 81.594 million in 2012. As such, this illustrates a growing financial stable base in the venture. Consequently, based on an evaluation both statements, the analysis calculated the following financial analysis. Financial Ratio Value Return on Sales 2.06% Return on Equity 3.07% Earnings per share 3.42 Current Ratio 6.0 Quick ratio 6.07 Inventory turnover 1.39 Accounts receivable turnover 1.19 Debt to equity 10.87 Debt to total assets 0.92 One of the conspicuous positive analyses indicating the organizational, financial stability is the high quick ratio at 6.0 illustrating that the venture has the ability to mitigate and meet all its current liabilities through liquidating the current quick assets, thus making its operations sustainable. Similarly, a positive account receivable turnover in 1.19 illustrates a high debt collection rate in the venture, thus reducing the risk of bad debts substantially. Further, a return on equity of 3.07% illustrates that the venture has a positive return on its investment. However, the value is relatively low and in the future operational efficiency should be enhanced to increase the overall return on equity ratio of percentage values. Works Cited Bank of North Dakota, “BND Leadership: ND Industrial Commission”, BND, 2015 Accessed January 26, 2015 Bank of North Dakota. Organizational Financial Statements 2013. North Dakota: BND, 2015. Print. Miltenburg, John. Manufacturing Strategy: How to Formulate and Implement a Winning Plan. New York: Productivity Press, 2005. Print. Read More

 

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