Case Analysis on Abay International Bank

Topics: Bank, Private banking, Financial services Pages: 9 (2442 words) Published: July 28, 2013
UNIVERSITY OF GREENWICH COURSE WORK COVERSHEET

Student Name:| 1. Ali Ahmed Ali 2. Deribe Meshesha 3. Tsega Mekonen 4. Hirpasa Elala | Student ID number: | 1. 000799442 2. 000799350 3. 000799335 4. 000799345 | Course Code: | BUSI 1271|

Title of Course: | Global Strategy|
Title of Assessment:| Group case analysis|
Type of Assessment | X|
Essay |
Tutor’s Name:| Dr. Tariku Atomsa|
Date Assessment Due:| July 27, 2013|

Table of Contents
Acronyms
1.Introduction4
2.Company Overview4
3.External Environment Analysis5
4. Five Forces of Competition Analysis6
a) Threats of new entrants6
b) Threats of substitute services7
c) Bargaining power of customers7
e) Intensity of competitive rivalry8
5. Internal Environment Analysis8
6. Success Factors of the Company12
7. Conclusion12
References

Acronyms
ABAbay Bank
ATMAutomatic Teller Machine
CBE Commercial Bank of Ethiopia
ETBEthiopian Birr
GDPGross National Product
GTPGrowth and Transformation Plan
IT Information technology
LIBLion International Bank
MFIMicro Finance Institutions
MoFEDMinistry of Finance and Economic Development
NBENational Bank of Ethiopia
R & DResearch and Development
ROAReturn on Asset
ROCReturn on paid up capital
S.CoShare Company
SSASub-Sahara Africa
USDUnited States Dollar
WTOWorld Trade Organization
MFIs Micro Finance Institutions

1. Introduction

This paper will deal with strategic review of Abay Bank S.Co. In this review external and internal environments of the bank will be analyzed in order to understand external factors which influences bank operations in one way another. It is essential to think strategically to understand the environment and the industry in which the company operates. The company’s market position and its competitiveness with similar service providers will be examined. Political, economical, social, technological and legal aspects of the company will be addressed. The paper further discuss on internal environment of the bank. The extent that the strategy of the organization is effectively working will be scrutinized. Resource strength and weakness, opportunities and threats, company’s competitiveness, etc will be evaluated. 2. Company Overview

Abay Bank is a young but dynamic private commercial bank. The Bank was registered as a newly established private bank in accordance with the Banking Business Proclamation No. 592/2008. It was established on July 14th 2010 and started operation on November 4/2010. The Bank was established with a subscribed capital of Birr 174.5 million and a paid up capital of Birr 125.8 million with 823 founding shareholders. It extends its services to domestic trade and services, international trade, agriculture, industry, transportation, construction and real estate sectors. The vision of the bank is to be dynamic, customer driven, innovative and financial sound premier bank in the world The Mission statement of the bank relied on providing efficient and effective, full-fledged banking services focused on development, business growth and profitability to meet the expectations of all stakeholders. 3. External Environment Analysis

This part of the appraisal focuses on environmental scanning and hence concentrates on assessing the overall political, economic social and technological climate that impacts the company in caption. How the company interacts with the external environment and how its internal resources have been configured and mobilized to meet the challenges posed by the external environment. Among others, a consistent over 11% average GDP growth (estimated at 7-8% by the World Bank and IMF) was registered for eight consecutive years in Ethiopia. This makes Ethiopia as one of the fast growing economies in Africa. (Ministry of Finance and economic...

References: Abay Bank S.C (2012) Annual Report of Abay Bank
Abay Bank five years strategy (2013) Five years strategy, implementation plan, resource and
Beamish, Paul W. (1990) International management: The internationalization process. Printed in
the United States of America
Francis, G. Jay et al (1998) Principles of Banking: Printed in United States of America. P6.
Friedman, David H (1998) Money and Banking: 4th edn. American bankers association. Washington DC.
National Bank of Ethiopia (2013) Performance of financial institutions: Financial stability and
Soundness. Birritu # 114. Addis Ababa
Porter, Michael (1996) what is strategy: Harvard business review
Ritter, Lawrence S. and Silber, William L. (1993) Principles of money, Banking, and Financial markets: 8th edn. printed in United states of America.
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