Submitted to: Mr.Shahid Nawaz Dept of Management Sciences.
Submitted by: MohsinJaved 26 Tahir Hussain 39 Syed Sadaqat 41 Zubair ul Hassan 38
Subject Organizational Management.
FINAL PROJECT ON BANK ALFALAH
In THE NAME OF ALLAH, THE BENEFICENT, THE MERCIFUL
DEDICATED TO OUR PARENTS WHO ALWAYS LOVE US & all those who have a soft corner for US in their hearts
Acknowledgement All gratitude and thanks to almighty “ALLAH” the gracious, the most merciful and beneficent who gave us courage to undertake and complete this task. We are very much obliged to our ever caring and loving parents whose prayers have enabled to reach this stage. We are grateful to almighty ALLAH who made me able to complete the work presented in this project. It is due to HIS unending mercy that this work moved towards success. We are highly indebted to our course instructor Mr. Shahid Nawazfor providing us an opportunity to analyze the brand like “Bank Al- Falah" which is vital ingredient of MBA program. We are very great full to our teacher Mr. Shahid Nawazfor providing us guideline for the completion of this project. We feel great pride and pleasure on the accomplishment of this project.
Preface
Banking sector owes a pivotal importance in the econoour of any country through its vibrant functions. This is the deep seated motivator that geared up me to join any bank for internship. Moreover, the practice and familiarity learned during this tenure would also attest very helpful and alleviating in the awaiting proficient life.
Bank Al-Falah posses an imperative importance in the banking sector of Pakistan. It always remains the center of hustles in business activities. It always endows with great covenant of rally round in terms of funds and services at all epochs of its dynamism.
We made industrious efforts to converse them comprehensively in this project. Particularly, we have remunerated more accents on study of distinguishing features and services of Bank Al-Falah Limited. We have made maximum venture to elaborate this project with the material read, listened and observed.
We have strong belief that this project will guide and ease the readers to understand the operations of banking system and more prominently have good knowledge about Bank Al-Falah Limited, one of the most trusty and leading banks in Pakistan.
Dear readers, we hope that you will appreciate our project and sense that reading our project is not like to waste the time in any respect.
Introduction& History of Bank Alfalah:
Bank Al-Falah Limited was incorporated on June 21st, 1997 as a public limited company under the Companies Ordinance 1984. Its banking operations commenced from November 1st, 1997. The bank is engaged in commercial banking and related services as defined in the Banking companies ordinance, 1962. The Bank is currently operating through 104 branches in 36 cities, with the registered office at B.A.Building, I.I.Chundrigar, Karachi.
Since its inception, as the new identity of H.C.E.B after the privatization in 1997, the management of the bank has implemented strategies and policies to carve a distinct position for the bank in the market place.
Strengthened with the banking of the Abu Dhabi Group and driven by the strategic goals set out by its board of management, the Bank has invested in revolutionary technology to have an extensive range of products and services. This facilitates our commitment to a culture of innovation and seeks out synergies with clients and service providers to ensure uninterrupted services to its customers. We perceive the requirements of our customers and match them with quality products and service solutions. During the past five years, we have emerged as one of the foremost financial institution in the region endeavoring to meet the needs of tomorrow today. Bank Al-Falah limited was incorporated on June 21, 1992 as a public limited Companies Ordinance 1984 and commenced banking operation from Nov 1, 1992. The bank is growing rapidly in its equity & asset base due to strategic managerial policies and assistance of Abu Dhabi Group.
The strength and standing of Abu Dhabi Group, principal owners of BAL have helped Bank Al-Falah Limited launch high quality consumer and corporate banking operation in Pakistan. Bank Al- Falah Ltd has embarked upon a rapid expansion program to make sure that our services reach more and more peoples. We are headed towards an optimum sized network reaching major urban centers in Pakistan and soon to go International.
ATM machines locations have been increased inmost of the branches but still need to expand their network in every branch and collaboration with other commercial banks in ATM services. It is also introducing a new; more advanced and latest funds settlement computerized SWIFT program in late 2002. Which is a strong point of BAL that makes it a sophisticated and highly technological oriented bank?
Regarding the investment and deposits portfolios BAL is playing dynamic strategies to diversity their funds in more productive assets like; investment in T. Bills and export related concerns, which are producing healthy profits. But all this goes to the staff of Bank Al- Falah Ltd bank that is more proficient and good risk managers.
BAL has numerous opportunities in future to increase the volume of business because it has options to tap the market of its own peer units (Al-Falah Car Financing, Al-Falah Visa, & also Al-Falah Home Finance etc) beside BAL has strong assets base, it can diversify its funds in more lending & investment opportunities live; Petroleum concerns, financial derivatives business through treasury.
In nutshell, BAL has been performing very well since its birth. All financial institutions of Pakistan regarding commercial banking concerns give Bank Al-Falah Ltd as a leading bank in domestic sector title. Through SWOT analysis we have found that BAL has competitive edge over other peer banks and it wants to tap the prospects of foreign banks to achieve long-term objectives of the bank it ought to have astute, well-designed, comprehensive and dynamic frame of undertaking which might be established after diagnosing the conditions of country and drawbacks due to which it lags behind.
Vision
Mission Statement
Bank Alfalah Branch Network:
The Bank is fully aware that the branch network has direct implications on the services that it provides to its customers. We offer services through a network of 177 branches and 109 state of the art ATM machines. Conventional Branches
Overseas Branches
ATM machines
SWOT Analysis:
Strengths
Weaknesses
Opportunities
Threats
What is a SWOT?
SWOT analysis is a process to identify where we are strong and where we are vulnerable, where we should defend and where we should attack. It tells us our strengths, our weaknesses, the opportunities which prevail in the market and the threats which we may face from our competitors and other from other potential factors.
This analysis can be performed on a product, on a service, a company or even on an individual.
SWOT Analysis of Bank Al-Falah
Here we have applied this very useful technique to identify the strengths, weaknesses, opportunities and threats of Bank Al-Falah. Strengths:
Strong Financial Position
As we can see in the financial statements of the bank, the financial position of the organization is very sound and its profitability is in increasing. The Earning per share has been increased on a rate of about 50%, which is a very positive sign.
Highly Qualified Employees
The bank has highly qualified and skilled workforce and it has succeeded to attract the best banking professionals from across the country due to its growing pace and sound reputation. Conducive Environment
The management of the bank is very much concerned with the development of and improvement of the working environment. The bank has state of the art and purpose built branches where all the modern technologies are provided to get the efficiency of the workforce and the customer satisfaction.
Govt. Support and Encouragement
As the owners of the bank belong to UAE and the type of their investment in Pakistan is a foreign investment, the govt. is fully supporting the bank management due to its policy to maximize the foreign investment in the country, to get the economic prosperity.
Fastest Growing Financial Institution
Due to its successful business policies and the strong financial position the bank has achieved the reputation of fastest growing financial institution in the country. It has greatly increased the customer’s confidence in the bank.
Huge Expansion Plan
Due to its strong financial position the bank has undergone a huge expansion plan to compete with the existing bank all over the country and with the passage of time the branch network is expanding at a very good pace.
Young and Energetic Workforce
As the bank is a newer one in the country, the bank has an advantage over its competitors because the majority of its workforce is young and not very much over aged. Thus the bank is getting maximum out put from its young and energetic workforce by spending comparatively less on their remunerations.
Islamic Banking Division
The bank is one of the pioneers of the commercial banks who have started the Islamic Banking along with their conventional banking. The bank has a separate network of its Islamic Banking Division which has 16 branches across the country and this network is also expanding at a very good pace.
Weaknesses:
Waiver of charges Currently the middle management of bank Al-Falah is the big reason for waiver of charges. Bank Al-Falah loosing a lot of its income likes (Cheque book charge, online charges, statement charges, and other things) because of management. This is a weakness of bank Al-Falah.
Inexperienced workforce
As the majority of the workforce consists of young professional, they lack in their experience. And sometimes lack of experience becomes a hurdle while serving to the customers. It is the point where they feel difficulty while competing the other bank, which have a very experienced workforce.
Over work Load on Employees
It was observed in the branch that as compared to huge business the bank is dealing in, the no. of employees is lesser and thus there is an increased workload on the employees. Due to this the efficiency of the employees is reduced.
Employees are not very much Motivated
As discussed before, the workload is high and the employees, especially the credit department, have to do late sittings to complete their tasks. On the other hand the bank has revised its salary increments policy to decrease the increment rate, as a result a decreased motivation level of employees is observed.
Opportunities:
Rapidly Growing Economy
At present the Pakistan’s Economy is growing on a very fast pace. The rapid growth of economy has resulted in the increase in the growth rate of all economic sectors especially in the banking sector which is growing at a fastest speed than ever and in future the growth is expected to increase even a higher rate.
Increased Interest Rates
The SBP has revised the interest policy and the interest rates have been linked with the KIBOR rates. Due to which the banks interest rate has been substantially increased which will greatly increase the banks’ profitability.
Mega Projects Financing As the increase in overall business activity in the country, the investors are launching various types of Mega Projects especially in housing and textile the bank has a great opportunity to finance these projects at very profitable term.
Huge Demand for Consumer Financing
The increase in per capita income and overall economy has resulted into a great demand for the consumer financing especially for home finance and car financing and it is said that this trend will increase more in future. The bank can earn a lot by focusing on its consumer financing sections.
Merger with UBL
After the privatization of United Bank Limited, the management of the BAL has purchased the majority shares of the UBL, and it is planning to merge these two banks. As UBL is the second largest bank in the country, this merger can make the bank the largest bank of the country.
Growing Trend of Islamic Banking
There is a very good growth trend in the Islamic banking in the country and in the world as well. BAL has the advantage of having full fledged Islamic Banking network and the growth in this particular field can be very fruitful for the bank.
Spending Practices of Mass
As the Pakistani’s are known for their extravagant practices, and to fulfill their funds requirements they don’t hesitate from getting loans from banks. Thus there is a very good scope for the bank to run successful business in such circumstances.
Threats:
Uncertainty of Economy
Although the economy is growing at a good pace, but there are many factors which results in the uncertain position of the economy. Such as political uncertainty, WTO, increase in poverty etc. etc. As a result there are permanent threats of future risks and losses for the bank.
High Rate of Inflation
The inflation rate of the country has gone above the 10%. This can result into an unfavorable situation for the bank. And especially when the ownership of the bank is UAE based, the net spread for them can substantially decrease. Trend of Mergers
There is a trend of mergers among the banks to become prominent in the market and to get the maximum market share. This trend can result into the union of some leading banks which can give tough time to the bank and it will become difficult for the bank to compete with them.
Privatization of Banks
Due to its privatization policy, the govt. is privatizing the state owned banks. The change in management may result in the increase in the efficiency and productivity of the banks. Thus it can become a threat for the bank.
Risk of Defaults
As discussed earlier that there is a trend of launching mega projects in the country. And every one is involved in this trend without taking any measure for the successfulness of these projects. This can result into the failure of this project which can make it difficult for the banks to recover their funds from these defaulters.
Human Resource Planning Process of Bank Alfalah: HR Department is responsible for an effective HR planning regarding demand and supply of employees and forecasting for these practices. The objectives of human resource planning for Bank Alfalah is same like the other organizations i-e to forecast and plan for the acquisition, retention, improvement and the utilization of HR. At Bank Alfalah Limited, Human Resource Planning involves a decision making in three areas of combined activities: In the first step the Bank Alfalah make a list of requirements to the specified job keeping in view its needs, objectives, additional human resource and skills required, then bank is able to hire the services of right kind of person to that job. 4 In the second step the Bank Alfalah make plans for motivation of their employees by giving them different sort of targets and incentives on their achievement for bringing excellence in the performance of employees in their organization. In the 3rd step, employee goals and the organizational goals are interlinked. Following are the different situations for which Bank Alfalah carries out different human resource planning. Forecasting Employee Demand: • Opening a new branch • Setting up or starting with new technology • Changes in customer demand • New services Forecasting Employee Supply: • Transfers • Internal Movements (promotions) • Job Rotations
• Overtime
Segmentation, Targeting, Positioning
SEGMENTATION
• Based on three basis:
Demographic.
Psychographic.
Behavioral Style
• Demographic:
Income.
Occupation.
Family Lifecycle.
• Psychographic: Life Style.
Social class
• Behavioral:
Benefits.
Services.
Quality.
Convenience. TARGET MARKET:
Bank Alfalah target market consists of individual clients as well as a number of business organizations. Due to different market segments, BAL’s different branches have their target markets.
To capture the import business in Pakistan, the targeted segments is valid markets known as business & commercial hub of Pakistan. Due to specialized services provided by BAL, and its highly competitive foreign exchange rates, most of the major importers
in this area deal with BAL. Examples include; Mughal Steel and International, New Shalimar Steel, Vellcone International, Rana Brothers etc.
As far as the individual clients are concerned, the targeted segment is posh areas like DHA.
Positioning:
The distinguish place of product/service in target customer mind.
BAL positioned itself as caring bank and customized banking. When customer thinks about Alfalah bank the following points come in his mind.
Consumer banking.
Easy approach to all departments.
Felling of self respect. Relatedness.
Fulfill of there dreams like (build own home, buy personal cars, etc).
Guaranteed profit.
Security.
All these thinks are in the customer mind. Due to Alfalah aggressive growth when ever customer think about banking sector the first bank comes in mind that would be Alfalah bank.
Alfalah bank positioned also as a fats growing .where there is a new town there would be the a branch of Alfalah provide maximum products/services under one roof . Unique Positing:
Positing mean image of service/Product in customer mind it can be created by various attributes or qualities of product /service. BAL positioned itself by a unique way that It is in the customer mind that
• BAL is aggressive growing bank
• New town opened Alfalah reach there first
• BAL Spreads its branches at Teasel Level in Pakistan
It spreads in other countries like Afghanistan, Bangladesh
POP’S
POP is associations that is not unique to the brand but is shared with others is strong, favorable and unique brand association.
Points of Parity of the brand:
Consumer Banking.
Corporate Banking. POD’s
Pods are strong, favorable and unique brand association. These are attributes or benefit that consumer strongly associate with the brand, evaluate it, and believe that they could not find it in competitive brand.
Pod’s of the brand:
Islamic Banking.
Brand Elements.
Affiliate marketing strategies with warid telecom and also with McDonalds.
Highest no. of branches among foreign banks.
Huge Expansion Plan.
Pioneer in “Customized banking”.
Areas of improvement in there positioning strategy:
HR department
Employment Motivation
Proper Division of work
Foreign Countries
Research and Development
How these brands working on the IMC (Integrated Marketing communication) to build brand equity. Advertising:
It is a non personal presentation in paid form to introduce a product or service idea
They use the following tools for advertising.
TVC
BAL uses more TVC as compared to its competitors. They choose those channels for advertisement where its target customers exist. They mostly choose those spots for TVC at peak hours in between the News. And special in the cricket matches. The TV channels it chooses for advertise are Sports channels like Ten Sports, and others like PTV, GEO, ATV, ARY, etc.
News Paper
BAL uses leading newspapers that are read by the business class and the family heads. They mostly gave there advertisement mostly on Jung, Dawn, The News, The Nation, etc.
Journals
BAL used these journals to promote their name,
DAWN, STAR, SPORTS
Magazines
BAL used these magazines to promote there activities.
Aurora
Flyers
Mostly these are using when there open a new branch in a new city or a new a scheme or product/service is introduced. Then these are used at a large scale at the chowks, squares; out side the shopping malls, Liberty, Pace, Super Jinnah, Blue Area, Karachi company stop, Tariq road etc.
Billboards
This is an important source of advertisement. BAL uses this only those places that have great importance for the business class or where mostly multinationals companies have offices and the traffic spots like Mall road, DHA, Lahore Cantt, Barkat Market, Davis Road, LDA Plaza, and Peshawar Morr.
Hooding
These are like billboards but large in size than billboards same they are using in few places in the big cities at important places like near big flyovers, squares, big buildings, etc
Sponsorships
Event Sponsor
Sports Sponsor Sports Sponsor :( Where there is Sports, there is Alfalah)
In the arena of sports, Bank Alfalah is actively involved in sponsoring events. Sports today not only represent healthy and clean way of life, it is big business in its own right. The sponsoring events Sponsored by the Bank Al Falah Limited in Pakistan range from Cricket Golf, Squash, Polo, and Volley ball, to Hockey. BAL uses attractive slogans to prominent
Some famous Events are.
• Al Falah Cup (Cricket) 2004
• Bank al Falah Pakistan Squash Open
• Bank al Falah Polo 2005
• AL Falah Cricket Triangular Series 2003 Event Sponsor
Social Events
BAL encourages extra-curricular activities and social events that allows employee to have a social exchange outside the working environment. In this employee are encouraged to bring there family members along, giving them a chance to fell a part of BAL family network social events like; • Picnics
• Barbeques
• Sports
• Cultural Tours
Actually they are creating a reference group (a group to which attached persons feel internal recognition by telling others about that group) and doing the marketing in terms of Word of mouth (The marketing that spread from one person to others in the circle of its family, friends, relatives, neighbors etc).some famous events are
[
• Whaga Border Trip 2005
• Lahore Basant Trip 2004
Word of mouth:
Word of mouth (The marketing that spread from one person to others in the circle of its family, friends, relatives, neighbors etc). Some famous events are
• Whaga Border Trip 2005
• Lahore Basant trip 2004
The basic purpose behind this to spread the bank name and create the both awareness and image among the people word of mouth is so much beneficial for the Bal because it reduces the cost of advertisement and the bank got recognition in free cost and generate the creditability among the people and remove the rumors.
Source of Brand Equity:
Brand equity is willingness for someone to continue to purchase your brand about my product of Bank Alfalah. We discuss how our products attained the sources of brand Equity.
Authenticity
BAL is providing best services to its customers. it is there service of quality that with in nine years of there working they become the largest branch holder with in private banks. It represents there progress. Consistency
BAL improving its products/services with the passage of time. They provide all the customized products/services that are needed by the low/medium level income. All
Types of banking are available in all the branches. They did not give any chance to his competitor to over come there weakness.
Reassurance
BAL always created a true faith among their customers by giving different fatalities to there customers (WOL, WARID post paid connections).and making good relation ship by sponsoring different events (Basant Mela, Jashan-e- Baharian), social gathering, fairs on different occasions collection for earth quake victims, etc
Differentiation
The unique point that make different BAL from other banks is that they use penetrating marketing strategy instead of skimming, they focused on that segment which is mostly ignored by others banks. They provide all the banking facilities (car, credit cards, debit cards, TM cards, Home loans, Agriculture loans, study loans, etc) to a normal income person now layman can enjoy all the facilities that he only desires. They become so popular in banking sector that the really proof there slogan “Caring Bank”. The most prominent point is that there name is spreading through word of mouth. So they needed less advertisement as compared to other banks.
Transformation of Experience
Levels of Brand Awareness and Image
Brand Awareness:
Brand awareness is related to strength of brand node or trace in memory, as reflected by consumer ability to identify the brand under different conditions. It is necessary but not always sufficient in building brand equity.
Consequences of Awareness:
Learning: Bank Alfalah created his node as a caring bank providing all the facilities to those segments where the people see dreams but not able to fulfill them bank Alfalah made them
Consideration:
How BAL positioned in the consideration set of the people. The BAL makes it easy to get all those things which people required in easy manner. Like his different products and
Services to the consumers if you want a car you simply go and fulfill the formality and get it at the same time rather you have to passed a long procedures. In his recently add. BAL show its all offers in appearing through one window. This makes the BAL in the consideration set of consumer mind.
Choice:
Choice advantage is depending upon on two things.
Purchase Motivation.
Purchase ability.
In the motivation field we persuade or give an emotional touch with the consumers. BAL gave this touch with his different slogans and campaigns. In credits cards they use the slogans “I m the person with all solutions” in Sports they use “where there is sports there is Alfalah”. Recently the collect the funds for the earth victims.
On the other hand purchase ability towards BAL products/services emphases on the peoples who have lack of knowledge about the product/services that was created through the promotional campaigns .advertisements in those channel where the target user are interested like during sports(cricket, golf, etc).
How to build brand awareness:
Brand Image:
Brand image is created in the mind of consumers by a specific quality, slogan or brand name so that BAL created high image like
BAL is the first time use penetration marketing strategy. He focused laymen as well as the upper class.
A slogan that was used by BAL is “Caring Bank” that became so effective that it create a word of mouth for BAL.
Using affiliate marketing programmer(WOL,Warid, McDonald’s) Introduced the Islamic banking In Pakistan
How can be these levels attained (Building a strong brand)?
By building a strong brand these levels can attained by four steps:
Identification:
BAL attained this level by recognition through his Slogan “Caring Bank” .it focused on the layman needs and fulfill it by presenting approachable schemes of products/services.
Brand meaning:
BAL created his meaning by presenting its valuable Products/services and covers the customer perception.
Customer responses:
Customer’s response about the BAL is resulted in increased the no of branches rapidly so that feelings of people about BAL become strong and strong with his efficiency.
Loyalty relationship:
BAL created a strong relationship with the customers. So Alfalah becomes the largest banks that have maximum branches (177) in limited time (1997-2006).
Brand Salience:
Brand Performance
Brand Imagery
Brand Judgment
Brand Feelings
Brand Resonance
Positioning of Brand with respect to Competitors All banks positioned themselves at different u unique edges to positioned in target customer mind following are the positioning edges of various banks
ABN Amro Bank:
They positioned themselves as for high level business and social class. They use the skimming strategy for there growth.
Standard Charted Bank:
They positioned themselves as foreign bank there staff and environment is totally different from the others banks. They also skimmed the market.
United Bank Limited:
They recently merged with bank Alfalah limited.
Allied Bank Limited
Recently got the award of bank of the year. They positioned as old trusty bank and it use a penetration strategy to get its goals.
Bank Alfalah Limited
They positioned as fast growing bank .they used intensive penetration strategy to position them. Recommendations After doing internship of six weeks in Bank Alfalah Limited, I have analyzed some problem in the Bank. Following are my recommendations: Web Site: Bank Alfalah limited has the web site, which has not been updated. The web site is very less informative and it won’t leave a good impression on the visitor. So I suggest that it should be updated to meet the requirements of the visitors. Marketing: Bank Alfalah is not very prompt in its marketing like its competitors. Most of the people in Pakistan know nothing about the bank or its products so the bank should spend and concentrate more on its marketing through various communication channels. Misdistribution of work: In Bank Alfalah, there is misdistribution of work; some people are over burdened with the work. So I suggest that there should be fair distribution of work in all the departments. Participative management: Participative management concept should be adopted, where ideas from the employees should also be taken, not only for developing products but also on service, efficiency, employee morale etc. in order to improve them. Split Units: Bank Alfalah is a very well established bank, but the number of air conditioners they have in the whole bank is very less. Bank should increase the number of its Split units, because summer stays longer in Lahore. Fax Machines and Photocopying Machine: The number of Fax machines and photocopying machine in the bank are also less than they are needed. For photocopying one has to go downstairs. So there should be more machines and also their placement should be at the right place.
Conclusion The conclusion of Bank Alfalah Limited is as follows: Good Image: Bank Alfalah has the benefit of having better reputation and image because of having the strength of Abu Dhabi consortium and under the leadership of His Highness Sheikh Nayan Mabarak Al-Nahayan. People feel lesser risk for investing their money with the bank. World Class Services: The bank is providing its customers world class and excellent services. This is the main reason for the growth of the bank. Coordination: Meetings are held very frequently which keeps the head-office well informed about the performance of its branches and also provides officials with the opportunity to communicate, discuss and deals with different situations as they arise. Employee Behavior: The employees of Bank Alfalah Limited are very committed to their work. They are very hard working and punctual but some of them have problems with the environment of the bank and they feel that the branch environment is not very encouraging.