FINANCIAL RATIOS

BCG Matrix

Stars (High Growth, High Market Share) Question Marks (High Growth,
Low Market Share)
Deposit (Savings Account)
Loans All access account
Online Banking - savings and
checking
account with free
life insurance

Cash Cows (Low Growth, High Market Share) Dogs (Low Growth, Low Market
Share)
Investments
For Lease
Credit Cards
For sale of used car
Bill Transfer
Five Porters Framework New Entrants

1. Cathay United Bank (2015)

2. Industrial Bank of Korea (2015)
3. Shinhan Bank (2015)
4. Sumitomo Mitsui Banking Corp. (2015)

Bargaining Powers of
Bargaining Power of Suppliers Industry Competitors Consumers
1. BSP 1. Metrobank 1. Local And Foreign Investors
2. PDIC 2. BPI 2. Students
3. Suppliers of Passbook, ATM 3. BDO 3. Professionals
Machines, ATM Cards, Deposit 4. China bank 4. Pensioners
slips and Withdrawal Slips
5. Employees

Substitute Products

1. Loan Shark
2. Pawn Shops
3. Black Market
4. Cooperative
New Entrants

With quite a few new banks entering the market each year, the threat from new
competitors in the banking industry should be high. However, due to bank failures and
mergers, it appears otherwise. People are very wary on whether or not they should
invest their money on new banks. The main reason for this is trust. Because the
banking industry deals with other peoples money and financial information, a lot of
people still prefer major banks that they consider trustworthy.

Bargaining Power of Suppliers

The main suppliers of the banking industry in the Philippines are the BSP and the PDIC.
The BSP regulates every bank in the industry while the PDIC mainly provides insurance
for deposits of all banks. PDIC exist to protect the depositors by providing insurance for
the depositors. Another essential supplier of banks are the once whore making their
passbooks, ATMs, Cards and slips that is vital for the banking industries day to day
operations.

Bargaining Powers of Consumers

The bargaining powers of the consumers are imperative to the banking industry. A
single individual has a relatively low bargaining power and a loss of a single account
has unnoticeable impact. However, an individual may influence more clients such as
students, professionals, or anyone that is in the same environment and may
substantially affect the banks profitability. It may also cause an implication on a larger
scale like those of foreign and local investors. Thus, means that every single individual
regardless of bargaining powers is significant.

Substitute Products

Some of the banking institutions largest threats dont come from other banks. Pawn
shops, loan sharks, black market and cooperatives pose the biggest threat. Although
the industry does not really suffer significant threat when it comes to deposits and
withdrawals, however loans, mutual funds and fixed income securities are bank services
that are also offered by other non-banking companies.

Industry Competitors

Banking Industry is considered as one of the most highly competitive industry. Almost
everyone who needs any banking services already has them. For this reason, banks try
to lure their competitors clients away and make them their own. The banking industry is
often about who can offer the best and the most convenient services, thus resulting on
the banks to experience lower rate of return. Major players such as BPI and BDO tend
to prefer mergers with other banks to gain more clients.
EXTERNAL FACTORS EVALUATION (EFE MATRIX)

KEY EXTERNAL FACTORS

SWOT - Opportunities
1. new products and services 0.15 3 0.45
2. New trade agreements between countries are 0.04 3 0.12
possible.
3. New products and services are possible. 0.1 4 0.4
4. Online Market 0.05 4 0.2
5. International Expansion 0.03 3 0.09
6. Acquisition synergies 0.03 3 0.09
7. New technology 0.05 3 0.15
8. Expanding the advisory and other services 0.07 3 0.21
offered to clients, investors and other banks
9. Boosting the bank's reputation as a reliable 0.06 4 0.24
partner
10. Building new client relationship 0.06 3 0.18
SWOT - Threats
1. increasing costs 0.03 1 0.03
2. increasing rates of interest 0.04 1 0.04
3. financial capacity 0.07 2 0.14
4. government regulations 0.05 1 0.05
5. tax changes 0.03 2 0.06
6. Automation is an unknown factor for this 0.02 1 0.02
industry.
7. The industry sees new market entrants. 0.03 2 0.06
8. Political risks 0.02 2 0.04
9. Industry competitions 0.06 1 0.06
10. Bad acquisitions 0.01 2 0.02
TOTAL 1 2.65
 SWOT - Opportunities SWOT - Threats
1. new products and services 1. increasing costs
2. New trade agreements between countries are possible. 2. increasing rates of interest
3. Improved Advertising/Advertisement 3. financial capacity
4. Online Market 4. government regulations
5. International Expansion 5. tax changes
6. Acquisition synergies 6. Automation is an unknown factor for this
7. New technology industry.
8. Expanding the advisory and other services offered to 7. The industry sees new market entrants.
clients, investors and other banks 8. Political risks
9. Boosting the bank's reputation as a reliable partner 9. Industry competitions
10. Building new client relationship 10. Bad acquisitions
SWOT - Strengths
1. existing distribution and sales networks Strengths / Opportunities Strengths / Threats
2. domestic market
3. barriers of market entry S10-O10 S10-T8,T4
4. experienced business units S9,S10-O9,O10 S5-T5
5. high profitability and revenue S6-O1
6. The industry has unique products. S9-O8
7. The industry shows a strong diversification.
S10-T8,T4
8. The industry is more robust than the economy in
general.
9. monetary assistance provided
10. Innovative culture.
SWOT - Weaknesses
1. brand portfolio Opportunities / Weaknesses Weaknesses / Threats
2. taxes
3. There might be too less suppliers. W10- O3 W2-T2
4. Profitability could be higher in this industry. W6,W7-O8,O10 W10-T7
5. High loan rates
6. Online presence
7. Customer service
8. Vulnerable to risk
9. Structural weaknesses
10. Low brand recognition
 SPACE MATRIX

FP
Conservative Aggressive
7

3
2.8
2

1
X-axis 2.8
Y-axis 2.4
2.4
CP IP
-7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7
-1

-2

-3

-4

-5

-6

-7
Defensive Competitive
SP
Internal Analysis: External Analysis:
Financial Strength (FP) Environment Stability (ES)
Return on Investment (ROI) 6 Rate of Inflation -4
Leverage 6 Technological Changes -3
Liquidity 5 Price Elasticity of Demand -3
Working Capital 6 Competitive Pressure -4
Cash Flow 5 Barriers to Entry into Market -2

Financial Position (FP) Average 5.6 Stability Position (SP) Average -3.2

Internal Analysis: External Analysis:

Competitive Advantage (CA) Industry Strength (IS)
Market Share -1 Growth Potential 6
Product Quality -2 Financial Stability 6
Customer Loyalty -5 Ease of Entry into Market 6
Technological know-how -3 Resource Utilization 6
Control over Suppliers and Distributors -4 Profit Potential 5

Competitive Position (CP) Average -3.0 Industry Position (IP) Average 5.8

According to the graph above, we noticed that Security Bank falls into the aggressive
quadrant of the SPACE Matrix. It is located at the coordinates of 2.8 for x-component
and a y-component of 2.4. It shows that Security Bank has a strong competitive position
in the market with rapid growth. It also indicates that Security Bank should adopt
aggressive strategy. It needs to use its internal strengths to develop a market
penetration and market development strategy.