A corporate strategy for Traders Royal Bank

Date of Publication

1998

Document Type

Oral Comprehensive Exam

Degree Name

Master of Business Administration

Subject Categories

Business Administration, Management, and Operations

College

Ramon V. Del Rosario College of Business

Department/Unit

Decision Sciences and Innovation

Thesis Adviser

Maria Cecilia I. Mendoza

Abstract/Summary

Times are indeed tough and we have heard enough numbers to prove it. The rising interest rates in the second half of 1997 as well as the debilitating effects of the Asian currency crisis caused the Philippines national product to slow down to 5.8% from 6.9% a year ago. Gross domestic product, for its art, grew by only 5.1% from 5.7% in 1996.

Meanwhile, the financial services industry is currently braving the storm that has been activated by the regional currency crisis, described to the worst so far. While the country, along with the rest of Asia, continue to brave the treacherous sea of financial market volatility, local regulators have been optimistic and convinced that while the rest of Asia have been in crisis, the country, particularly the Philippine banking system remains stable and strong. However, just recently, Orient Commercial Banking Corporation became the first company to be hit by the said crisis, failing to stem heavy withdrawals and was forced to seek emergency financial assistance from the Bangko Sentral.

Currently, the country has around 56 commercial banks. In 1995, the Philippine Government allowed 10 foreign banks to set up branches in the country. This was the start of the deregulation of the financial services industry, particularly in the banking sector. Such a move by the government has now made our local banks compete against these giants for such a limited market. Competition becoming intense, only the biggest and the strongest among banks shall last.

Traders Royal Bank, one of the countrys first commercial banks have seen and braved the different storms that have plagued the industry, one time or another. It is proud to have been able to withstand the various obstacles that threatened its existence. This strategic management paper on Traders Royal Bank is written in hopes to contribute feasible corporate strategies that could maximize the potentials of the Bank to become a universal bank someday. This paper shall define the environment on which the company is operating in, with elaborate discussion on the Philippine banking system per se. It is important to note that there is a distinction between a commercial bank and a universal bank. The latter, is said to have an expanded commercial banking authority, such that addition to commercial banking powers, it has the authority to exercise the powers of investment houses as provided in pertinent laws, invest in equity of allied undertaking, etc. Its environment will be analyzed using he Five Forces Model of Michael Porter, the same framework used to determine the opportunities and the threats in the industry. The companys strengths and weaknesses shall be identified, as determined by its financial performance and value chain. The value chain, also a framework by Michael Porter, itemizes the different activities strengths and weaknesses will be tackled within the framework of the identified opportunities and threats, the company shall also be presented in a strategic map, again a management tool by Michael Porter to give us a more vivid picture of the Banks position in the industry given the range of product line and geographic scope as its dimensions. We shall discover from the map that there will be other banks that would have similar strategies as that of Traders Royal Bank, therefore, also through the value chain analysis, the Banks competitive advantage will be identified. The proposed corporate strategies shall come from the identification and threats. The final module of this paper will be the proposed implementation schedule using Mc Kinseys 7-S Framework. This framework simply suggests that for an effective strategic change, all 7s should change all at the same time.

Abstract Format

html

Language

English

Format

Print

Accession Number

OCE0140

Shelf Location

Archives, The Learning Commons, 12F Henry Sy Sr. Hall

Physical Description

80 leaves ; 28 cm.

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