1.

2 Main Activities of Maybank

Transformation journey (LEAP30) is one of the main activities that began in
2008. LEAP30 act to remain its leadership and regionally position in the
financial industry with strategies of improving the quality of operations,
looking for opportunities and focus one execution operation. Wave I 2009/2010,

the first wave of Maybank that aim to create momentum of consumer, enterprise,
investment, Islamic banking, insurance, international business,operations and human
capital development. Wave II is the converging aspirations by synergies between
companies. Company need to change new management skill to support this
transformation journey. Wave II 2010-2015 aim to expand regional businesses on
Malaysia,Singapore and Indonesia. Another activity is focus on managing
information technology. Improving operational delivery of current and future
IT services, finding the solution to improve the ability to align banks IT
strategy, reduce cost, improved level of consistency, quality and flexibility in
service delivery, looking for innovation, global knowledge and process
expertise. Dividend Reinvestment Plan (DRP) also is a part of Maybanks
activities. DRP tends to conserve and manage its capital. RDP enables
Maybank declare dividends to shareholders either receive the dividend in
cash or reinvest the dividend into new Maybank shares. The reinvestment in
new Maybank shares will increase the value of shareholders as the shares are
issued at a discount of up to 10%. This will help Maybank to remain a portion
of its capital and the capital become Maybanks dividends.

SPACE matrix

Strategic Position & Action Evaluation (SPACE) Matrix is another management tool used
t o h e l p a n a l yz e a c o m p a n y. I t c a n a l s o u s e d t o d e t e r m i n e w h a t s o r t
o f s t r a t e g y t h e company should undertake. The SPACE Matrix is broken
down into four quadrants as being aggressive, conservative, defensive, and
competitive. Additionally, the SPACE Matrix analysis functions upon two
internal strategic dimensions which are financial strength (FS) and competitive
advantage (CA). Besides, the SPACE Matrix methodology also studies two business
external strategic dimensions such as environmental stability (ES) and industry strength
(IS). The CA (values from -1 to -6) and IS (values from +1 to+6) are representing by the
X-axis of the Cartesian graph whereas the FS (values from +1to +6) and ES (values
from -1 to -6) are representing by Y-axis. After drawing these SPACE matrix
graph, the overall strategic positioning of a company can be determined.

SPACE matrix for Maybank

Maybanks SPACE Matrix Graph

According to the graphabove, we noticed that,

Maybanks falls into aggressive quadrant of the SPACE Matrix. It is located at
the coordinates of 3.55 for x-component and y-component of 3.00. It shows
that Maybank has a strong competitive position in the market with rapid
growth. It is also indicates that Maybank should adopt an aggresive strategy.
It needs to use its internal strengths to develop a market penentration and

market development strategy. Other possible strategies include product

development, integration with other bank and also concentric diversification.

Aggressive Position
There are numerous tactics fall into the aggressive strategy category. One of the strategies
is market development. As stated above, we can note that Maybank is biggest
bank in Malaysia and has 361 local branches and 88 branches in overseas. However,
Maybank is not located in every area of Malaysia. Therefore, it should try to expand their
branches into new geographical areas or markets.Besides, Maybank should
also aggressively find ways to grow its business overseas such as Thailand,
Pakistan and middle-east.This objective can be attained through mergers and
acquisitions (M&A).
B e s i d e s , M a y b a n k s h o u l d c a r r y o u t t h e market penetration strategy. The
management of Maybank can think o u t t h e b e s t w a y t o s u s t a i n a n d
c o m p e t e i n e x i s t market as well as new market. This method would be hire
high level employees fromthe competitors strong in those areas.
Moreover, Maybank should focus on doing more market research . Many clients are
attracted to the company who is doing strong research. Therefore, Maybank should do
research to investigate customers discontent. Then, the company can improve
their service and product quality through customers suggestion. In addition
to that, market research can show the demand in different areas. Thus, the
company will be success in every area by determining the demand boundaries.
Other than that, Maybank need to implement a strategy on product development .The
management should aim on offering new services such as helping their customersor
corporations manage interest rate and currency risks. By doing this, the Maybank can
move forward to obtain bigger slice of investment banking.

SPACE Matrix Conclusions

Maybanks high reputation helps in attracting customers loyalty
Compete in an unstable environment
Maybank should develop new market to various area of Malaysia as well as overseas.
They should expand its services and product such as helping corporations manage
interest rate and currency risks.
Eliminate inefficiencies and improves services quality. It can be done by
doing market research to investigate unfavorable performance. Then, make
full use of the resources to improve it.
Seek Integration Opportunities such as merger and acquiring other existing banks in
different areas
Hire potential employee either from competitors or from other sources to get
bigger improvement
Seek new and good management staffs to get a better company direction

INDUSTRY ANALYSIS (PORTER FIVE FORCES OF MAYBANK)

Introductions
The model of the Five Competitive Forces was developed by Michael E. Porter that
becomes an important tool for analyzing an organizations industry structure in strategic
processes. This model is applicable to the banking industry. Maybanks do compete with
the other financial institution in Malaysia, however they also must cooperate with one
another in many respects. There is an underlying problem which is the banks in Malaysia
are so similar that there is essentially nothing one of them can do that the others cannot
easily duplicate.
Five Forces Analysis
a.Threats of new entrants
Malaysia has not put a barrier to entry for any financial institution manly banks in
Malaysia, thus making it easy for any financial institution to penetrate into the industry.
b. Bargaining power of suppliers
A bank has three suppliers of its product, money:
1. Its depositors.
Depositors, has no bargaining power whatever in reality. If they make time deposits the
bank will set the price or interest rate it will pay.
2. The credit market
The credit market as a source of supply of the raw material, money, is open to
all at all time if they are qualified participants. The source of supply can be argued to be
infinite.

3. The central bank .

The Central bank is effectively the resource of last resort. Apparently,at least for
the moment, it will continue to supply liquidity to the banking system in virtually
unlimited quantities at very reasonable cost.
c. Bargaining power of buyers
In the banking industry, customer have has very limited bargaining power. However the
customers may option in changing to other banks that they think is offering a better offer
than Maybank.
d. Threat of substitute product
For the most part there is no real threat of substitute products in the banking industry.
However there probably will be continues evolution of products from paper to electronic
in coming years. This is an area of potential competition for whom ever banks that
choose to use it in their services.
e. Rivalry among competitors
Generally all banks offer somewhat the same products and services to their customers,
thus there is not much differentiation between Maybank and the other competitors. This is
making the competition much higher. Maybank is actually ranked as the top banks
earners in Malaysia in 2009 alongside with Public Bank, Bumiputra Commerce, RHB
Capital and Hong LeongBank.

VRIO ANALYSIS
Maybank perspectives their performance relative to industry peers is likely to vary
according to the level to which resources, capabilities, and ultimately core competencies
satisfy VRIO criteria. Arshad et al. (2012) have explored the four criteria as follows:

Valuable
A resource or capability is said to be valuable if it allows the firm to exploit opportunities
or negate threats in the environment. Maybank can be said as the first mover in the
internet or online banking in Malaysian financial sector. This can lead to develop valuable
advantage to attract large number of subscribers to the service. The technical expertise on
internet or online banking facilitate Maybank to reach wide clienteles, particularly white
colour clients who prefer to conduct desk banking than the traditional method.
Maybanks wide networks, both local and also global reach, made it convenient for its
clients to conduct businesses and transactions across nations. Strong financial resources
coupled with GLC status provide advantages to the Maybank to tap deposits from

government and government related agencies. Besides, the Maybanks commitment of

the Islamic banking services offers a significant advantage in both markets, regional and
global expansion. The abundant of experience and strong workforce are valuable assets
that drive Maybank to where it is now.
Rare
A resource is rare simply if it is not widely possessed by other competitors. Maybank is
widely known and well recognized by its unique brand name and a tiger head logo.
Maybanks subsidiaries and related companies are closely associated by the same brand
name and logo making it easily recognized as a group.
Inimitable
Inimitability is probably the toughest criterion to examine because given enough time and
money almost any resource can be imitated. At Maybank, its strong financial resources
and wide network, across the globe, is a difficult act for others to catch up. Further,
Maybank can be classified as an expert in Islamic banking which expands the service
across Asian region and other Muslim countries. The courage to pursue this market
penetration strategy to other regions can be notified as inimitable competent that most
banks could not possess.

Organized
The firm must likewise have the organizational capability to exploit the resources. Being
government linked company, Maybank enjoys some advantage in term of government
deposits and other credit portfolios. Within its stable, Maybank is a model of being one
stop financial centre providing full range of financial services.

REFERENCES

Arshad, D., Ahmad, H., Mustapa, A.N., and Mohtar, S. (2012). Strategic Change and
Transformation: A Case Study at Malayan Banking Berhad, Proceedings of The 3rd
International Conference on Technology and Operations Management: Sustaining
Competitiveness through Green Technology Management, BandungIndonesia (July 46), pp.143-148. ISBN: 978-979-15458-4-6.

BCG ANALYSIS OF MAYBANK

High
Business

High

Low

STARS

QUESTION MARK

Deposits

Fixed Deposit

Personel Loan

Cash Acceptance Machine

Saving Account

Growth
Rate

Low

CASH COW

DOG

Lending

Insurances

Leasing

Mortgage

Investment Banking

Trade & cash management

Relative Position (Market
Share)
The Boston Consulting Group (BCG) matrix
is a tool that used to evaluate strategic

business units. It is organizes business by two dimension, the business growth rate and
market share. The growth rate is use to show how rapidly the entire industry is increasing
and the market share is whether a business unit has a larger or smaller share than its
competitors. The combination of market share and business growth rate have provides
four categories to determine the SBUs within a corporate portfolio. The four categories of
BCG are stars, question marks, cash cows and dogs.
STARS. The stars have a large market share in the rapidly growing industry and it is
important because it has an additional growth potential and profits should be reinvested
for future growth and profits. It will produce a positive cash flow as industry matures and
market growth slows. Star need to use large amount of fund and are the leaders in the
business so they should also generate large amount of fund. Star may generate fund but
because the market is grow rapidly, the star require investment to maintain the lead. If
successful, a star will become a cash cow when its industry matures. The stars in
Maybank are personal loan and saving account. Personal loan is consider as star
because it give loans to customers when they are desire to pay childs higher education
fee or marriage related expenses or want to buy a house and the interest rate is lower
compare to the financial company. A saving account is a account that maintain by retail
financial institutions that pay interest but cannot be used directly as money but can used
by writing a cheque. The saving account lets the customer set aside a portion of their
liquid assets while earning a monetary return. The saving account is attracting the
customer and consider as a star because it have certain profit and low interest.
QUESTION MARKS. Also known as problem children. The question mark is new in a
rapidly growing industry but only has a small market share. Question mark have the
worst cash characteristic of all, because high demands and low return due to low market
share. If nothing is done to change the market share, question marks will generate great
amount of cash but when the growth stops, it will become a dogs. Question mark is risky
and uncertain because it could become a star or it could fail. The question marks in

Maybank are fixed deposit. A fixed deposit is refers to a savings account or

certificate of deposit that pays a fixed rate of interest until a given maturity date and it
consider as a question mark because it have a low interest rate so cause it have a low
market share.
CASH COW. The cash cow is exists in a mature, slow-growth industry but it has a large
market share. The cash cow will generate a positive cash flow and can be milked to feed
riskier business. The profit and cash generation of cash cow should be high and because
of the low growth, the investment needed of cash cow should be low and keep the profits
high. A cash cow can be a product line, investment or a business unit that has return on
assets (ROA) greater than the market growth rate. The idiom refers to the idea that it
produces "milk" (profit) long after the cost of the investment has been recouped.
DOGS. The dog just has a low market share in a slow growth industry. A dog just offer a
little profit and may be targeted for divestment or liquidation. Dogs may not require
sustainable cash, but it ties up capital that could better be set up elsewhere. Unless the
dog has any strategic purpose, it should be liquidated if there is little scene for it to gain
market share. The dogs in public back is recurring deposits. Recurring deposit is an ideal
way to invest small amounts of money every month and end up with a large amount of
money on maturity.