SWOT Analysis of United Commercial Bank Ltd. (UCBL)

22/03/2013 21:00

SWOT analysis is the detailed study of an organization’s exposure and potential in perspective of its strength, weakness, opportunity and threat. This facilitates the organization to make their existing line of performance and also foresee the future to improve their performance in comparison to their competitors. As though this tool, an organization can also study its current position, it can also be considered as an important tool for making changes in the strategic management of the organization.

Strengths:

• UCBL Limited has already established a favorable reputation in the banking industry of the country. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth in the profits and deposits sector.
• ­­ UCBL has provided its banking service with a top leadership and management position. The top management officials have all worked in reputed banks and their years of banking experience, skill, and expertise will continue to contribute towards further expansion of the bank.
• UCBL Limited has already achieved a high growth rate accompanied by an impressive profit growth rate in 2001. The number of deposits and the loans and advances are also increasing rapidly.
• UCBL has an interactive corporate culture. The working environment is very friendly, interactive and informal. And, there are no hidden barriers or boundaries while communicate between the superior and the employees. This corporate culture provides as a great motivation factor among the employees.
• UCBL has the reputation of being the provider of good quality services too its, potential customers.

Weakness:

• The main important thing is that the bank has no clear mission statement and strategic plan. The banks not have any long-term strategies of whether it wants to focus on retail banking or become a corporate bank. The path of the future should be determined now with a strong feasible strategic plan.
• The bank failed to provide a strong quality-recruitment policy in the lower and some mid level position. As a result the services of the bank seem to be Deus in the present days.
• The poor service quality has become a major problem for the bank. The quality of the service at UCBL is higher than the Dhaka Bank, Prime Bank or Dutch Bangla Bank etc. But the bank has to compete with the Multinational Bank located here.
• Some of the job in UCBL has no growth or advancement path. So lack of motivation exists in persons filling those positions. This is a weakness of UCBL that it is having a group of unsatisfied employees.
• In terms of promotional sector, UCBL has to more emphasize on that. They have to follow aggressive marketing campaign.

Opportunity:

• In order to reduce the business risk, UCBL has to expand their business portfolio. The management can consider options of starting merchant banking or diversify into leasing and insurance sector.
• The activity in the secondary financial market has direct impact on the primary financial market. Banks operate in the primary financial market. Investment in the secondary market governs the national economic activity. Activity in the national economy controls the business of the bank.
• Opportunity in retail banking lies in the fact that the country’s increased population is     gradually learning to adopt consumer finance. The bulk of our population is middle class. Different types of retail lending products have great appeal to this class. So a wide variety of retail lending products has a very large and easily pregnable market.
• A large number of private banks coming into the market in the recent time. In this competitive environment UCBL must expand its product line to enhance its sustainable competitive advantage. In that product line, they can introduce the ATM to compete with the local and the foreign bank. They can introduce credit card and debit card system for their potential customer.
• In addition of those things, UCBL can introduce special corporate scheme for the corporate customer or officer who have an income level higher from the service holder. At the same time, they can introduce scheme or loan for various service holders. And the scheme should be separate according to the professions, such as engineers, lawyers, doctors etc.

Threats:

• All sustain multinational banks and upcoming foreign, private banks posse’s enormous threats to UCBL Limited. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against an on slough of foreign the banks.
• The default risks of all terms of loan have to be minimizing in order to sustain in the financial market. Because default risk leads the organization towards to bankrupt. UCBL has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem if not elimination.
• The low compensation package of the employees from mid level to lower level position threats the employee motivation. As a result, good quality employees leave the organization and it effects the organization as a whole.