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Case Study

Bank A of the Philippines was seeking a strategy to establish itself as a new universal bank in 1994. It had strengths like its universal banking license and branch network, but also weaknesses such as fewer branches than competitors and low profitability. The case analyzed expanding its branch network provincially or forming joint ventures. The recommended action was to pursue joint business ventures to increase external connections, profitability, and opportunities while mitigating risks through shared capital.

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Norberto Gonzales
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58 views

Case Study

Bank A of the Philippines was seeking a strategy to establish itself as a new universal bank in 1994. It had strengths like its universal banking license and branch network, but also weaknesses such as fewer branches than competitors and low profitability. The case analyzed expanding its branch network provincially or forming joint ventures. The recommended action was to pursue joint business ventures to increase external connections, profitability, and opportunities while mitigating risks through shared capital.

Uploaded by

Norberto Gonzales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Case study: Bank A of the Philippines

Submitted by: Group 1 of 12- Excellence


ALCOBA, Kurt Justin
CRUSIO, Mariz Antoinette
GASALAO, Lodymer A.
GONZALES, Norberto Jr. A.
LARGA, Jennifer E.
REGALADO, Liz T.
Case Analysis: Bank A of the Philippines
I. TIME CONTEXT: 1994

II. VIEW POINT: Mr. Peter Factoran

III. CENTRAL PROBLEM: Strategy that will establish the foothold of the Bank A of the
Philippines in the financial services industry as a new Universal Bank.

IV. OBJECTIVES:
Must Objectives:
1. To formulate and implement a strategy that would establish the foothold of
Bank A in the Financial Services industry as a new Universal Bank.
2. To enter a new and bigger market of banking and financial service industry
on the advantages brought by the universal bank license.
3. To generate net revenues of Php. 217.6 million or more.
Want Objectives:
1. To establish the foothold of Bank A in the Financial Services industry as a
new Universal Bank.

V. AREAS OF CONSIDERATION:
STRENGTHS:
1. License to operate as a Universal Bank.
2. Assets amounting to Php. 15.8 billion
3. For the year ended Dec. 31, 1993, net income reached record-high 217.6
million
4. Total of 96 branches
5. Considerable, if not immense, care for the employees
6. Additional 12 ATM units with 2 ranking in top 5 consistency out of 573 in
Bancnet Consortium
WEAKNESSES:
1. Fresh induction as a new Universal Bank
2. Product and service homogeneity with competitors
3. Fewer branches than major competitors
4. More than half of existing branches are too centered in Metro Manila
5. Competitors long established in the global financial market arena
6. Low profitability than competitors
OPPORTUNITIES:
1. New and diverse services to offer
2. Spin off of Bank’s IT Functions to Bank A Information and Technology,
Inc. (BAITI)
3. Membership enlistment to Society for Worldwide Interbank Financial
Telecommunications (SWIFT)
4. Branch Expansion Programs beyond Metro Manila
THREATS:
1. Lack of switching cost between other banks
2. Competition over market share with long-established competitors
3. Difficulty in acquiring market share from provinces with no prior branches

VI. ALTERNATIVE COURSES OF THE ACTION


ACA#1: Provincial Branch Expansion Program
The bank’s branches are too focused in Metro Manila, leaving most provinces’
markets untapped.
Advantages:
1. Additional branches will allow Bank A to tap into new markets which
2. Increase brand awareness
Disadvantages:
1. The cost of immediately building additional branches may outweigh the
benefits that can be derived from it.
2. Other resources of the company will be spread too thin.

ACA#2: Joint Business Ventures with Outside Corporations


A new universal bank such as Bank A of the Philipines lack the extent of linkages
very much available to its long-established competitors, and as such, in need of
forming partnerships to increase both external connections and profitability.

Advantages:
1. Increased source of profits will accelerate the growth of Bank A.
2. Shared capital mitigates risk of joint ventures between both parties.
3. Connections with external corporations may open up business opportunities
with other companies outside of the country.

Disadvantages:
1. The profits shared between both parties are split according to agreed
percentage
2. There is a risk of conflict between two parties.

ACA#3:
VII. RECOMMENDATION
ACA#2

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