Assessment
Criteria 1.1 - Explain the importance of external factors affecting an
organization.
Oman Arab Bank
is a financial organization that is affected by a number of external factors
which are very important due to their impact on the bank and its profitability
as these external factors can affect the activities of the bank such as the
size of deposits and transactions in addition to their effect on the bank's
stability and opportunities in Oman. Al-khawaldeh and Jaber, (2014) discussed
different factors affecting banks and how important they are to be considered
and analyzed, they referred to the annual inflation rate, ratio total assets
brought by the deposits of customers to the bank, the country's GDP, the ration
stock market, the country's political environments, types of technology and
other factors. To realize the impact and importance of these factors on OAB, a
PESTLE analysis can be made as follows:
PESTLE
Analysis of Oman market
1.
Political
The political
environment is of great importance because it enables the bank to invest in a
safe environment without risks of loss based on wars and other political
conflicts. Oman is a stable country that has a safe stable political life with
strong government that supports business and investments.
2. Economic:
The economic condition is of great importance to the
bank as it helps it increase its investments based on the level of economic
income of the country and the individual. Oman has a good economic condition on
the national and the individual levels which makes it a good place for
investment as it is considered a rich country with high GDP.
3. Social:
The social environment is an important external factor
affects the business as it can guide the bank for providing customers with
their needs based on their social life. Oman's social life is characterized
with a modern connected one with a love for technology and family life. This
makes OAB focuses on special services that are based on family support by loans
and other projects in addition to presenting the latest technology in banking
activities, transactions and other banking activities.
4. Technological:
Technology is important for the bank as it specify how
far the bank is coping with the customers' needs related to technology and if
the bank is not advanced, this will affect customers' satisfaction and
behaviors towards the bank's activities. OAB is characterized with high
technology levels and adding new services that are of high technology to cope
with the high demands of the Omani environment related to technology as most companies
are changing their policies to include the latest versions of technology and
development.
5. Legal:
The legal environment has an important impact on OAB
as in Oman, the legal system is clear and support business with flexibility in
taxation systems that makes investments easy and successful.
6. Environmental:
Oman is a country of the Gulf that is characterized
with a desert environment with moderate climate that encourage people to make
projects such as farms and factories and others which makes a bank such as OAB
support these projects and help people use the environment in useful profitable
projects by the bank's support via loans and other banking supporting programs.
(Valeri, 2009)
Assessment
Criteria 1.2 - analyze the needs and expectations of stakeholders of an
organization
OAB stakeholders have different needs and expectations from the bank and
in order to analyze these needs and expectations, a stakeholder analysis should
be executed as according to Reed et al, (2009) stakeholder analysis is to be
documented and delivered for the key stakeholders as it indicates their roles,
their interest degree for the organization, their impact on other stakeholders
and their relationship with each other and the other important information. Key
stakeholders of OAB include the bank's managers, employees and board of
directors, shareholders, clients of the bank, suppliers, the Omani government,
the Omani media channels and the Omani society. The bank has to study the needs
of those stakeholders such as the managers' needs for success, employees needs
for job satisfaction, shareholders' needs of high profits, clients' needs of
good revenues and support from the bank as well as high interests, suppliers'
needs including adequate contracts and accurate activities, the Omani
government needs the bank to follow laws and be obliged to stop any fraud in
the bank as well as supporting the Omani economy and the Omani media channels
need the bank to have more projects to advertise and the Omani society needs
the bank to share in its special events and be a sponsor for social events.
Expectations of stakeholders are connected with their needs as all stakeholders
expect the best from the bank and expect the bank to develop itself in order to
satisfy them and make banking services better.
OAB is one of the most important financial
institutions in Oman and it helps in improving the Omani economy and it is
affected by the different changes occurring in the external environment such as
the great change in technology related to banks and their activities as most
banks today have changed to apply the latest approaches in money transfer such
as electronic transactions, instant transactions, online banking and using ATM
services in addition to the different credit and debit cards applications. The
economic factors also affect the bank as the strong Omani economy makes the
bank active delivering the market with rich projects and opportunities for
investments. The political factors also give the bank an opportunity to invest
as regulations and laws support the bank and give it facilities and
opportunities for investments. (omanarabbank, 2016)
Assessment Criteria 2.1 - use appropriate
tools to analyze the effects of current business plans
In OAB, the current business plans effects
can be analyzed by a SWOT analysis as follows:
Strengths
OAB is a
strong financial institution in Oman with high clients' deposits and providing
a variety of different banking services including retail banking, loans,
Islamic banking systems, supporting small projects' with loans, money transfer
internationally, ATM services, credit and debit cards, online banking and
instant transactions.
Weaknesses:
The
bank's online services are not very developed as money transfer and instant
transactions need to be improved.
Opportunities:
The bank
has many investment opportunities based on the Omani economic, political and
social environments in addition to the large variety of nationalities living in
Oman.
Threats:
Threats
include the different market competitors especially international banks such as
HSBC and City banks in addition to the new online banks used by the Omani youth
such as Paypal.
Another analysis is the BCG as follows:
Relative market
share
|
Stars
The
bank's specific services such as treasury services and investment banking.
Digital
and internet banking
|
Question
marks
Online services
|
|
Cash
cows
Customers'
deposits and investments
Islamic
banking services
Loans
services
|
Dogs
The bank's cards
rewards
ATM machines
|
Market growth
rate
Assessment Criteria 2.2 - Review the
position of an organization in its current market
OAB market position in the
market is stable and the total assets are yearly increasing as in 2015 the
total assets were 1.982. 699 RO from 1.816.091 RO in 2014 with a net profit
equals 29.011RO that increased from 28.400 RO in 2014. Growth in the net interest
in 2014 is 5 million RO with a 12% rate which lead to make OAB a leader in the
Omani financial and business market with a great market share as customers'
deposits increased by 9% as a result of the market liquidity tightening. This
proves a strong position of the bank in the Omani financial market. (Annual
report, 20
Assessment Criteria 2.3 - Evaluate the
competitive strengths and weaknesses of an organization’s current business
strategies
Strengths
OAB is a leading bank in Oman with big total assets that are
increasing yearly and the bank's deposits and profits are also increasing
yearly. The bank is developing its services and is updating them yearly to cope
with the latest technologies in banking services locally and internationally.
The bank has strong ATM machines with a continuous system of maintenance to
keep the service quality high and satisfy the customers' needs and exceed their
expectations. Credit and debit cards of the bank are varied and inclusive for
all different needs of customers. The bank includes many services such as
retail banking, Islamic banking, corporate personal and investment banking. The
bank has strong human resources with very supportive HR management strategies.
Weaknesses
The bank is still poor in applying the online
services and instant services as although the bank is applying swift codes
systems, it still needs to cope with online banks such as Paypal and others as
these banks are more effective in online shopping processes and international
instant money transferring. Online sites of the bank are still poor in
communicating with customers and presenting services of online banking.
Although the bank has weaknesses in the digital banking, the
bank has developed its services rapidly and added many new services lately to
cope the changes occurring in the financial market locally and internationally
and it can improve its current services and be able to compete different banks.
The company has to make different researches to develop its online banking to
cope with the competitive business environment. (Chong et al, 2010)
Assessment Criteria
3.1 - use modeling tools to develop strategic options for an organization.
There are many modeling tools for developing strategic
options for OAB as for example, porter's generic strategy can be used to guide
the bank change its strategy to a better one. One of these three strategies can
be used:
Cost leadership
This strategy can be used by Oman Arab Bank in order to
provide services with low cost such as low cost loans for example in order to
make more profits and at the same time the service should be of high quality
and benefits for the customer.
Differentiation strategy
This strategy can be used by the bank in order to provide a
new innovative service for clients of the bank to be unique and distinguished
from other companies in order to reach competitiveness and boost other rivals.
Focus strategy
This strategy can help the bank by focusing on specific
service or services in order to develop activities related to it and attract
customers to try this service in order to give it many advantages. Tanwar,
(2013)
Assessment Criteria 3.2 - develop a
comparative understanding of activity from organizations in the market.
In order to develop a comparative understanding of activity
from OAB in the market, it is good to make a positioning map in order to
compare OAB to its competitors as according to D'Aveni, (2007); it can help in
mapping the key attributes of all competitors and their products or services
and make it easy to evaluate the organization's position in the market.
Consumer Position Map
OAB is characterized with providing high quality banking and
financial services with a wide diversity of services that are updated
periodically and is characterized with high qualified human resources working
cooperatively presenting a good image of the bank. The bank has very developed
technologies applied on all its systems compared with other banks that are
still using traditional methods. An example can be applied on the bank's
personal banking services as they are inclusive for all available services in
the market such as the accounts, loans, cards, bancassurance and digital
banking services which makes the bank among the most efficient banks in Oman in
adding and developing its services to satisfy consumers and meet their expectations.
Assessment Criteria 3.3 - create options to
form the basis of future organizational strategy.
There are options for forming the bases of future strategy
for OAB and they can be clear through applying the Ansoff Matrix that is
according to Fejza and Asllani, (2013) a good tool that can help in creating
options for forming the future strategy suitable for OAB. The following figure
represents the Ansoff Matrix for OAB:
Products
Present new
|
Market
penetration
|
Product
development
|
|
Market
development
|
Diversification
|
Markets P
N
The market Penetration
Currently, OAB is penetrating the market with its innovated
services that can satisfy customers' needs and help them make successful
investments. The bank has increasing total assets and profits. OAB is coping
with the market needs and adding the new services added in the market.
Market development
OAB is focusing on marketing its current services in
different market segments as it can attract new customers' scales and making
businesses with other countries.
Product development
OAB can develop its services to innovate new services and
market them in the current market.
Diversification
OAB can innovate and develop new services and banking
investments to market them in new markets such as other Gulf countries or other
countries that can help it make good profits.
Assessment Criteria 4.1 - propose a
suitable structure for a strategy plan that ensures appropriate participation
from all stakeholders of an organization.
A stakeholder grid should be made in order to identify the
interests of stakeholders in order to ensure the stakeholders' full
participation in the bank's activities as follows:
Keep satisfied
|
Engage closely
|
Monitor
|
Keep informed
|
power
Interest
OAB has key stakeholders such as the Omani government,
customers of the bank, suppliers, investors, shareholders and employees.
The government: The Omani government interest in the
bank's activities are not very high but the government is interested in the
bank's activities that can help in improving the Omani economy and increase
investments that help Oman.
Suppliers: Suppliers of the bank can be considered the
shareholders and investors added to the shareholders of the bank as all provide
the bank with financial assets, they are those stakeholders having the highest
interest in the bank's activities, profits and projects and they need to be
informed about any changes occurring in the bank. They also have to be engaged
closely and kept satisfied.
Customers: The customers' interests of the changes the
bank is applying are not high but they need to be satisfied with the interests
rates and level of service quality.
Employees: The employees have high interest in the
changes the bank is doing and they need to be informed about them but they have
to be monitored as the work they do to apply change can affect other
stakeholders' satisfaction. Employees also need to be satisfied.
Stakeholder analysis: According
to Mathur et al, (2007) stakeholders are those people who are interested in the
activity of the business organization and to analyze them in order to establish
a strategy plan, there are a number of steps that can help in analyzing them
and developing a suitable strategy plan that ensures full participation of all
stakeholders such as:
Step 1.Identifying stakeholders: the bank has to
identify all stakeholders and realize their interests and try to satisfy their
needs.
Step 2.Prioritising Stakeholders: The bank has to
prioritize the stakeholders based on their attributions as this can be very
effective in involving them gradually in the strategy plan.
Step 3.Develop an engagement strategy: it is important
to develop an engagement strategy for stakeholders of OAB as it can make them
practice their duties and commitments easily and effectively and this can occur
via meetings with stakeholders, group facilitations, presentations, sharing the
change plane and delegating it with them.
Step 4.Mapping stakeholders' profile: This depends on
the stakeholders' levels of interest and effect on the bank as each group
should have a mapped profile that shows how to engage them better.
Step 5.Optimizing their support: this means to make full use of the support of
stakeholders' resources.
Step 6.Monitoring changes: Changes
that occur by the bank, market or activities should be monitored by the
ba
Assessment Criteria 4.2 - develop criteria
for reviewing potential options for a strategy plan.
For developing a criteria for reviewing the potential options for a
strategy plan as options can be as follows:
Maintaining stakeholders' attraction: because the criteria is
based on the stakeholders' engagement in the bank's activity and strategy plan,
their interests should be important for the bank in order to attract them and
keep them interested.
Feasibility studies: OAB ha strong
human resources who are well trained on the latest technologies in different
dealings with customers in addition to having a team specialized in digital and
online banking systems.
Effects on share and market position: the
bank has to assess the effects of the criteria and the strategy plan on the
share of the bank and the market position.
Risk assessment: The strategy plan has
to identify the possible risks associating the criteria and find out any
potential risks that may occur during applying the strategy plan.
Cost benefit analysis: A cost benefit
analysis is needed for measuring, identifying and comparing the different costs
the bank may afford in the investments against the gained benefits and the
validity of the investments.
Assessment Criteria 4.3 - construct an
agreed strategy plan that includes resource implications.
A strategic plan can be constructed including the resource
implications of Oman Arab Bank and it should be SOSTAC referring to being
situational, objective, strategy, tactics, application and control. The
strategy plan with resource implications should include the following:
Objectives:
Achieve the best alignment of the bank's strategic priorities
and corporate policies.
OAB strategies
Estimating of the projects' lifespan, sustainability as
well as the exit strategy
These strategies should be investigated by the bank regarding
the period of implementing each strategy, the modifications that should be made
on the strategy and how this strategy can be sustainable and reflecting the
objectives of the bank.
When the bank's projects and changes are being implemented,
there are some main important issues to be regarded by the bank's management
such as:
Real tests should be regularly made on the new
implementations and changes of the bank.
Risk assessments as well as mitigation strategies should be
made for realizing the existed risks and finding methods for addressing them.
Financial requirements needed by the bank for implementing
the new management strategy should be made as well as recognizing the sources
that will be used for funds and focusing on the funding gaps.
Preparing the different needs including the management
structures and the internal systems, informing engaged partners and having a
legal framework.
A workflow process should be maintained so as to achieve the
required services.
There should be an authority process that ensures the bank's
direct behavior and interests in addition to a reward and penalty process for
introducing the required behaviors for people participating in the
implementation process.
A perpetuation process is also needed to be implemented by
the bank and the participants for maintaining the quality and the quantity of
the resources either natural or social.
An identification process should also be applied for
developing a wholeness concept that reflects uniqueness and signification of
Oman Arab Bank and it should also include exerting efforts for defining the
different factors working for clarifying the bank's uniqueness to both
stakeholders and the society.
A communication process should also exist in order to give a
chance for information exchange as well as values among all participants.
An evaluation process should also exist for setting a
criteria and defining process for the activities and ideas to recognize what
can rate them as well as allocating them to specific levels related to
them. Mathur et al, (2007)
