A strategic management term paper on Bangko Kabayan

• Main Author: Sangalang, Leonardo
• Format: text
• Language: English
• Published: Animo Repository 2007
• Subjects: Banks and banking > Philippines; Banks and banking; Cooperative > Philippines; Bangko Kabayan
• Online Access: https://animorepository.dlsu.edu.ph/etd_masteral/3671
• Institution: De La Salle University

In order to draft a sound strategic management paper that can be done by the subject company, one must know the bases for strategy: threats and opportunities to the industry, strengths and weaknesses of the company, the personal values of the key figures in the company and society's expectations. Each is mandatory in formulating credible and effective strategy. To make a credible external analysis, one must identify the correct industry where the subject company is situated. For Bangko Kabayan, it is surmised that they are in financial services. Under this industry are two recognized systems: the banking system and the non-banking system. Most financial institutions such as banks and nonbanks with quasi-banking functions are governed by the Bangko Sentral ng Pilipinas (BSP). In a recent assessment by BSP, the financial industry of the Philippines showed promising growth. Relevant issues included bank compliance of the capital adequacy ratio, issuance of hybrid capital instruments to strengthen capitalization and the role of micro financing to alleviate poverty in the company. An analysis of the task environment was also conducted in order to identify the industrial effects of several macro environmental changes in eight segments: namely social, political, legal, ecological, economic, technological, institutional and demographic. Each cited change either had an effect on one of the five competitive forces (i.e. intensity of rivalry, threat of new entrants, threat of substitute products, bargaining power of suppliers and bargaining power of buyers) or on a combination of forces. After which, each change was cited as either a threat or an opportunity to the industry. Also to be considered was the broader societal expectations of the major stakeholders of the industry. To measure the internal capability, specific frameworks such as financial analysis, value chain analysis and signs of competitive strength or weakness were used to serve as bases for evaluating their inert capabilities. Another important factor to the analysis were the personal values of the key implementers of the strategic thrust of the company. After analyzing both the external and internal, a proposed corporate vision was formulated based on the core ideology and the envisioned future (i.e. big hairy audacious goals). Corporate objectives are also formulated based on the dimensions of competitive advantage. Once these have been formulated, the proposed corporate strategies based on these dimensions and the corporate advantage cycle framework was used to determine the banks investments of renewal and where to get their sources of advantage. Functional strategies were also mentioned in order to provide in detail how the functional areas of the bank (operations, finance, marketing, human resources and information management) can help support the corporate objectives. Aside from this, implementation frameworks to determine what needs to be changed (the 7-S framework) to meet each strategy and how to do it (the 8-SIT framework) have also been used. To conclude the paper, financial projections based on the effect of the corporate strategies to the bottom line are also provided. It is here where one can see just how the corporate objectives are met.