Download - Operations Management MBA Assignment
1. Introduction
This report covers a detailed analysis of the operations strategy of Sampath Bank PLC
with the view to identify how operations strategy is exercised by the bank and to find
out the contribution of operations strategy towards the success of it. The report covers
sections starting from introduction and ending up with of concluding remarks.
2. Operations Management and its importance
Operations are the part of a business organization that is responsible for producing
goods and/or services. Goods are physical items and services are activities that provide
some combination of time, location, form or psychological value. Operations are what
must be done internally in order to deliver to the customers whether in goods or
services. Thus, from an organizational perspective, operations management may be
defined as the management of the conversion process that transforms inputs such as raw
material and labor into outputs in the form of finished goods and services.
Operations management is recognized today as a critical functional area within every
organization. No longer is operations management considered to be subservient to the
finance and marketing areas; instead, it is now treated as an equal. Firms that fail to
recognize the significant contribution of the operations management function will lose
profits and market share of the firm will also tend to decline. The once reactive role of
operations management, which concentrated solely on minimizing costs has been
replaced by a more proactive position of maximizing the value added to the goods and
services that the organization provides.
Businesses are operating in a highly competitive environment. Some of the major issues
facing operations management executives today in this turbulent environment include;
achieving and sustaining high quality while controlling costs, integrating new
technologies and control systems into existing processes, working effectively with other
functions of the business (marketing, finance, human resources) to accomplish the goals
of the firm, working effectively with suppliers and being user-friendly for customers.
All of these issues are inter-related. The key to success is for operations management to
do all of these at a level that is competitive in both global and domestic markets.
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3. Operations Strategy - An Overview
3.1 What is Operations Strategy?
Operations strategy is the development of a long-term plan for using the major
resources of a firm for a high degree of compatibility between the resources and the
firm’s long-term business strategy. The role of operations strategy is to provide a plan
for the operations function so as to make the best use of its resources. Operations
strategies are developed from the competitive priorities of an organization, which
include low cost, high quality, fast delivery, flexibility and service.
3.2 The Relationship between Operations and Strategy
All business organizations are concerned with how they will survive and prosper in the
future. A business strategy is often thought of as a plan or set of intentions that will set
the long-term direction of the actions that are needed to ensure future organizational
success. However, no matter how grand the plan, or how noble the intention, an
organization’s strategy can only become a meaningful reality in practice if it is
operationally enacted. An organization’s operations are strategically important precisely
because most organizational activity comprises the day-to-day activities within the
operations function. The relationship between an organization’s strategy and its
operations is a key determinant of its ability to achieve long term success or even
survival. Organizational success is only likely to result if short term operations activities
are consistent with long term strategic intentions and make a contribution to competitive
advantage.
The relationship between operations and the other business functions is similarly
important. The objective of the operations function is to produce the goods and services
required by customers whilst managing resources as efficiently as possible. This can
lead to conflicts within an organization. Conflicts between the operations and the
marketing functions are likely to centre on the desire of marketing to ensure that
operations concentrate on satisfying customers. Whilst this may seem desirable,
marketing will usually want operations to be able to meet customer needs under any
circumstances. This is likely to lead to demands to produce greater volumes, more
variety, higher quality, a faster response and so on, all of which are likely to lead to less
efficient operations. Conflicts between the operations and the accounting and finance
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functions, on the other hand, are likely to centre on the desire of accounting and finance
to want operations to manage resources as efficiently as possible. This will tend to pull
operations in exactly the opposite direction of that desired by marketing. Conflicts
between operations and the human resource management function are likely to centre
on issues of recruitment, selection, training, management and the reward of those
employed within operations. For example, operations managers may want to vary
organization wide policies in order to meet local needs; a move likely to be resisted by
human resource managers. The operations function lies at the heart of any organization
and interacts with all the other functions. As such, achieving agreement about what
decision areas lie within the remit of operations and what should be the basis of
decision making within operations is an essential part of ensuring the consistency of
action over time necessary for a successful organizational strategy.
3.3 Operations Strategy Process
A company’s business strategy is developed after its managers have considered many
factors and made some strategic decisions. These include developing an understanding
of what business the company is in (company’s mission), environmental scanning, and
identifying the company’s strengths (core competencies). These three factors are critical
to the development of the company’s business strategy. It can be further explained with
the help of following diagram.
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Figure 1: The Operations Strategy Process
As you can see from the diagram that mission, environment and core competencies play
a crucial role in the strategy formulation of a business.
The first decision a company needs to make is to identify its mission. Mission is a
statement defining what business an organization is in, who its customers are and how
its core beliefs shape its business. Identifying the mission is a very important part of
developing a business strategy. The mission basically defines the company. If a
company doesn’t have a well defined mission it may pursue business opportunities
about which it has no real knowledge or that are in conflict with its current pursuits, or
it may miss opportunities altogether.
The second factor that must be considered when developing a business is the external
environment in which the business is operating. This environment includes trends in the
market, economic, political environment and in society. These trends must be analyzed
to determine business opportunities and threats. This process of monitoring the external
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Mission
Business StrategyEnvironmental Scanning
Core Competencies
Competitive Priorities
Order qualifiers & winners
Operations strategy decisions.
(Structure, infrastructure)
Strategies of other functions
Linked
environment is called environmental scanning. To remain competitive, firms have to
continuously monitor their environment and be prepared to change their business
strategy in light of environmental changes. Environmental scanning allows a company
to identify opportunities and threats. Through environmental scanning an organization
can easily get to know the gaps in what customers need and what competitors are doing
to meet those needs. A study of these gaps could reveal an opportunity for the company
and based on which the company can design a plan to take advantage of it.
The external business environment is always changing. To stay ahead of the
competition, a company must constantly look out for trends or changing patterns in the
environment. Changes in the technology, such as point-of-scale scanners, automation,
computer-assisted processing, electronic purchasing and electronic tracking are the clear
examples for the recent trends that take place in the market place. One rapidly growing
trend is e-commerce. All these factors changed the way the services being provided by
the companies.
In addition to market trends, environmental scanning looks at economic, political and
social trends that can affect the business. Economic trends include recession, interest
rates, inflation and general economic conditions. Suppose that a company is considering
obtaining a loan in order to purchase a new facility. Environmental scanning could
show that interest rates are particularly favorable and that this may be a good time to go
ahead with the purchase.
Political trends include changes in the political climate-local, national and international
that could affect a company. There has been a change in how companies view their
environment-a shift from a national to a global perspective. Companies seek customers
and suppliers all over the globe. Many have changed their strategies in order to take
advantage of global opportunities, such as forming partnerships with international firms
called strategic alliances. For example, companies like Motorola and Xerox want to take
advantage of opportunities in China and developing strategic alliances to help them
break into that market.
Finally, social trends are changes in society that can have an impact on a business. An
example is the awareness of the dangers of smoking, which has made smoking less
socially acceptable. This trend has had a huge impact on companies in the tobacco
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industry. In order to survive, many of these companies have changed their strategy to
focus on customers overseas where smoking is still socially acceptable or have
diversified into other product lines.
The third factor that helps define a business strategy is an understanding of the
company’s strengths known as core competencies. In order to formulate a long term
plan, the company’s managers must know the competencies of their organization. Core
competencies could include special skills of workers, such as expertise in providing
customized services or knowledge of information technology. Another example might
be flexible facilities that can handle the production of a wide array of products. To be
successful, a company must compete in markets where its core competencies will help it
win. Highly successful companies develop a nosiness strategy that takes advantage of
their core competencies or strengths.
All these factors namely vision, environmental scanning and core competencies help the
formulation of the business strategy. The following diagram shows the snapshot view of
the contribution of these three factors towards the creation of business strategy.
Figure 2: Three inputs towards the development of a Business Strategy
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Environmental Scanning
(Monitoring the business environment
for market trends, threats and
opportunities)
Mission
(Statement that defines what is the
business; who are the clients and how values define
business)
Core competencies
(Unique strengths that can help a firm to win
the market)
Business Strategy
As you can see from the figure 2, which shows a dynamic, ongoing process that is
constantly allowed to change. As environmental scanning reveals changes in the
external environment the company may need to change its business strategy to remain
competitive while taking advantage of its core competencies and staying within its
mission.
Once a business strategy has been developed, an operations strategy must be
formulated. This will provide a plan for design and management of the operations
function in ways that support the business strategy. The operations strategy relates the
business strategy to the operations function. It focuses on specific capabilities of the
operation that give the company a competitive edge. These capabilities are called
competitive priorities. Competitive priorities are capabilities that the operations function
can develop in order to give a company a competitive advantage in its market. By
excelling in one of these capabilities a company can become a winner in its market.
Skinner and others initially identified four basic competitive priorities. These were cost,
quality, delivery and flexibility. These four priorities translate directly into
characteristics that are used to describe various processes by which a company can add
value to the products and services it provides. There now exists a fifth competitive
priority known as service and it was the primary way in which companies began to
differentiate themselves.
To help decide which competitive priorities to focus on a firm should be able to
distinguish between order winners and order qualifiers. Order qualifiers are competitive
priorities that must be met for a company to qualify as a competitor in the market place.
Order winners on the other hand are the competitive priorities that help a firm to win
orders in the market. Knowing the order winners and order qualifiers in a particular
market is critical to focusing on the right competitive priorities.
As soon as the competitive priorities have been identified, a plan is developed to
support these priorities. The operations strategy will specify the design and use of the
organization’s resources; that is, it will set forth specific operations requirements. These
can be broken down into two categories namely structure and infrastructure. Operations
decision related to the design of the production process such as characteristics of
facilities used, selection of appropriate technology and the flow of goods and services
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through the facility are coming under the category of the structure. Operations decisions
related to the planning and control systems of the operations such as the organization of
the operations function, the skills and pay of workers and quality control approaches are
coming under the category infrastructure.
Together the structure and infrastructure of the production process determine the nature
of a company’s operations function. The structure and infrastructure of the production
process must be aligned to enable the company to pursue its long term plan. This what
the way an operations strategy is developed. A sound business strategy coupled with of
supporting operations strategy will make an organization more competitive in the
market place.
4. Trends affecting Operations Strategy decisions
Operations management is continuously changing to meet the new and exciting
challenges of today’s business world. Two major trends that have significantly impacted
the role of operations strategy within an organization are an increasing trend towards
globalization of business and advances in technology especially information
technology.
4.1 Globalization
The world is quickly becoming a global village, caused in large part by technology. As
a result, competition in most industries has intensified significantly in recent years and
this trend towards hyper competition is expected to continue. Because of globalization
markets once dominated by local or national companies are now vulnerable to
competition from literally all corners of the world. At the same time globalization
provides new opportunities for companies in the form of new previously untapped
markets for their products as well as new sources for raw material and components at
significantly lower costs.
As a result of globalization of business, managers must extend their vision beyond their
own national boarders while developing operations strategies. When companies expand
their business beyond the territorial boundaries the operations management function
take a broader, more global perspective for companies to remain competitive. To
survive and prosper in such a global market place companies must excel in more than
one competitive dimensions.
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4.2 Advances in Technology
Advances in technology in recent years have had a significant impact on the operations
management function. The increased use of information technology, automation and
robotics has permitted firms to improve the quality of the goods that are being provided.
According to Stan Davis and Chris Meyer three factors that are significantly affecting
the way the business is being conducted namely connectivity, speed and intangibility.
They suggest that the combination of all three is causing changes to occur in the
business.
All three factors are directly related to advances in technology. Connectivity refers to
the fact that virtually everyone is now connected electronically, be it through e-mail,
internet, telephone or fax. At the same time firms with these connected networks in
many cases provide services that are now available twenty four hours. As a result of this
connectivity information is transmitted in a matter of seconds or minutes, instead of
hours or days which was the previous norm. The combination of connectivity and speed
suggests that firms are now focusing on the intangible aspects of their business to gain
competitive advantage in the market place which translates into providing better and
more innovative services.
Technology has also dramatically affected one of the basic concepts in operations
strategy that of making trade-offs between priorities. With advances in technology
managers no longer have to make pure trade-offs between competitive priorities as they
once did. Instead, today’s technology allows firms to compete on several priorities
simultaneously resulting in shifts to superior performance curves.
5. Competitive Dimensions as a Source for Competitive Advantage
The key to developing an effective operations strategy lies in understanding how to
create or add value for customers. Specifically, value is added through the competitive
priority or priorities that are selected to support a given strategy. Skinner and others
initially identified four basic competitive priorities namely cost, quality, delivery and
flexibility. These four priorities translate directly into characteristics that are used to
describe various processes by which a company can add value to the products it
provides.
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5.1 Cost
Competing based on cost means offering a product at a low price relative to the prices
of competing products. Within every industry, there is usually a segment of the market
that buys strictly on the basis of low cost. To successfully compete in this niche, a firm
must necessarily be the low cost producer. Products sold strictly on the basis of cost are
typically commodity-like. In other words, customers cannot easily distinguish the
products made by one firm from those of another. As a result customers use cost as the
primary determinant in making a purchase.
To develop this competitive priority the operations function must focus primarily on
cutting costs in the system, such as costs of labor, materials and facilities. Companies
that compete based on cost must study their operations system carefully to eliminate all
waste. They should offer extra training to employees to maximize their productivity and
minimize scrap. Generally, companies that compete based on cost offer a narrow range
of products and product features allow for little customization and have an operations
process that is designed to be as efficient as possible.
5.2 Quality
Many companies claim that quality is their top priority and many customers say that
they look for quality in the products they buy. Yet quality has a subjective meaning; it
depends on who is defining it. When companies focus on quality as a competitive
priority they are focusing on the dimensions of quality that are considered important by
their customers. Quality as a competitive priority has two dimensions. The first is high
performance design. This means that the operations function will be designed to focus
on aspects of quality such as superior features, close tolerances, high durability and
excellent customer service. The second dimension is product and service consistency,
which measures how often the product or service meets the exact design specifications.
A company that competes on this dimension needs to implement quality in every area of
the organization. One of the first aspects that needs to be addressed is product design
quality, which involves making sure the product meets the requirements of the
customer. The second aspect is process quality, which deals with designing a process to
produce error free products. This includes focusing on equipment, workers, materials
and every other aspect of the operation to make sure it works the way it is supposed to.
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Companies that compete based on quality have to address both of these issues; the
product must be designed to meet customer needs and the process must produce the
product exactly as it is designed.
When it comes to a bank, service quality plays a crucial role in its success. One way to
improve quality is to improve communication with the bank’s customers.
Communication includes all customer contact from monthly statements to personal
contact at the branch. Each contact is vital because banking is an intangible service,
which cannot be readily assessed by potential customers before the service is delivered.
When it comes to operations, quality is a key component from a banker’s perspective
and is one of the key objectives of operations. Quality can be improved by decreasing
the variations in the services being delivered by the banks. Therefore attention should
be given towards customers’ interaction with the bank.
The operations manager is right in the middle of the quality discussion. He is having the
sole responsibility to make sure that the bank’s system of delivery is satisfactory both
from the customer stand point and internally. Bankers along with operations officers
should also consider the internal service quality. For bankers this means having timely
and accurate information. In order to sell the product or additional products to
customers bankers must have reliable information. The banks that cannot access timely
information will not survive. Courteous and consistent service, enlarge customer
relationships, accurate and timely information, efficient bank office processing, highly
personalized service, high value and convenient service these might be the aspects of
quality of banks based on which banks can differentiate their services being delivered to
customers as far as the quality is concerned.
5.3 Delivery
Speed of delivery is an important determinant in the purchasing decision of customers.
Here, the ability of a firm to provide consistent and fast delivery allows it to charge a
premium price for its products. In addition to speed of delivery, the reliability of the
delivery is also important. In other words, products should be delivered to customers
with minimum variance in delivery times. Today’s customers do not want to wait and
companies that can meet their need for fast service are becoming leaders in their
industries.
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When it comes to delivery it can be divided into two categories namely rapid delivery
and on-time delivery. Rapid delivery refers to how quickly an order is received and on-
time delivery refers to the number of times deliveries are made on time. When delivery
is a competitive priority, the job of the operations function is to critically analyze the
system and combine or eliminate processes in order to reduce time so as to speed up
delivery. Often companies use technology to speed up processes rely on a flexible
workforce to meet peak demand periods and eliminate un-necessary steps in the
production process.
As far as the banking service is concerned, banks should concentrate on reducing the
waiting time of customers. The shorter the time customers waiting in the line the higher
the satisfaction will be and vice versa.
5.4 Flexibility
Flexibility is a competitive priority focusing on offering a wide variety of products or
services. There are two dimensions of flexibility. One is the ability to offer a wide
variety of products or services and customize them to the unique needs of clients. This
is called product flexibility. A flexible system can quickly add new products that may
be important to customers or easily drop a product that is not doing well. Another aspect
of flexibility is the ability to rapidly increase or decrease the amount produced in order
to accommodate changes in the demand. This is called volume flexibility.
Companies that compete based on flexibility often cannot compete based on speed,
because it generally requires more time to produce a customized product. Also, flexible
companies typically do not compete based on cost, because it may take more resources
to customize the product. However, flexible companies often offer greater customer
service and can meet unique customer requirements. To carry out this strategy, flexible
companies tend to have more general purpose equipment that can be used to make many
different kinds of products. Also, workers in flexible companies tend to have higher
skill levels and can often perform many different tasks in order to meet customer needs.
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6. A brief Overview of Sampath Bank PLC
Sampath Bank commenced business early 1987 as the Investment and Credit Bank. In
September 1987, the name was changed to Sampath Bank Limited. The bank has had a
broad based shareholding from the time its shares were quoted on the local stock
exchange-at that time. In fact, it had the largest number of shareholders (over 18,000)
for a public quoted company in Sri Lanka. The bank was an immediate success; and it
revolutionized the banking industry in Sri Lanka by introducing customer-centric
products and services, and drastically reducing transaction times. Blending modern
technology with a strong sense of national consciousness was the secret of its success.
Value addition has been its main strength. It invests in technology and employs
dynamic and self-motivated professionals to enhance its service capabilities.
Innovation, team work and high ethical standards have contributed to the success of
Sampath Bank. In a relatively short time span the bank has produced many firsts. It was
the first local bank in Sri Lanka to be fully computerized and the first to issue Master
Cards. It was also the pioneer in networked Automated Teller Machines (ATMs) and
the first bank in Sri Lanka to introduce telephone banking.
Sampath Bank PLC has also been a trailblazer in Information Technology (IT) and
Transmission Control Protocol (TCP) in communications. Regularly acquiring cutting
edge technology, it localizes this aspect to make it more adaptable and suitable to meet
the needs of customers. Indeed, it is the first bank to bring virtual banking to the door
step of even remote rural areas in the country. The bank has also introduced internet and
mobile banking, and it is a principal member of Master Card and Visa. A staff strength
more than 1900 and a network more than 100 branches in Sri Lanka is testimony to the
bank’s impressive growth over the years.
6.1 Vision and Values of Sampath Bank
Vision is an aspirational description of what an organization would like to achieve or
accomplish in the mid-term or long-term future. It is intended to serve as a clear guide
for choosing current and future courses of action. The vision of Sampath Bank is “The
Growing Force in Sri Lankan Financial Services”. The vision of Sampath Bank has a
more clarity in business perspective than the focus. Therefore the vision of Sampath
Bank can be placed as the Mission where the organization doesn’t have any mission
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statement in the current context. This will enable the organization to have more clarity
in business perspective whilst clearly defining the overall objectives of the organization.
Values are a company’s ethical and moral compass and decision making foundation.
They are the ideals and ethics that management holds valued. They drive decision
making in that they are constantly referred to in the decision making process. They tell
those in the company how things are done and those outside the company why they
want to be associated with this company. Sampath Bank has six values namely; create a
learning culture that promotes individual and organizational development as well as
promoting innovation and value for customers, treat all internal and external customers
the way we would like to be treated, encourage and promote team work in all aspects of
behavior, open to feedback and demonstrate an impressive commitment to results and
uncompromising ethical and professional standards of behavior.
7. Core areas of Operation of Sampath Bank
Sampath Bank is the third largest private sector commercial bank in the country, in
terms of total assets, focusing on delivering futuristic financial services to individuals,
corporates and other institutions. The core areas of business are organized in to Personal
Banking, Corporate Banking, Treasury Operations, Credit and Debit Cards and E-
Banking.
7.1 Personal Banking
It caters to wide range of customers facilitating management of personal finances
through a range of products that address their investment with transactional and
financing needs.
7.2 Corporate Banking
It delivers financial solutions tailored to meet corporate investment and operational
needs through the bank’s sub divisions; Corporate Credit, Development Banking, Trade
Services, Corporate Finance and the Foreign Currency Banking Unit.
7.2.1 Corporate Credit
It provides credit facilities across a spectrum of products tailored to the corporate sector.
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7.2.2 Development Banking
It focuses on financing the business commencing operations utilizing credit lines
available to the banking industry, concessionary funds from their own funding base and
an allocation from the Investment Fund Account.
7.2.3 Trade Services
It provides documentary credit and related facilities to importers and exporters
harnessing technology effectively to provide a fast and reliable service.
7.2.4 Corporate Finance
It provides Merchant Banking and Professional Corporate Services, advisory and other
corporate services.
7.2.5 Foreign Currency Banking Unit
It has been formed with a view to provide solutions and expertise for corporate clients’
foreign currency financing needs.
7.3 Treasury Operations
It carries out interbank operations to manage the bank’s exposure to exchange rate risk,
interest rate risk and liquidity risk arising from normal banking activities.
7.4 Credit and Debit Cards
It offers a range of cards to suit the diverse life style needs of Sri Lankans with
unmatched promotions and the highest security for all transactions.
7.5 E-Banking
It develops and maintains a range of products facilitating electronic transactions for the
convenience of the bank’s customers. These range from Mobile Cash to the Sri Lanka
e-gateway for tourist visas to Sri Lanka.
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8. Operations Strategy Model of Sampath Bank
Core areas of Operation
Stakeholders Products Delivery Channels Strategy
Personal Banking
Senior CitizensSampath Sanhinda Savings & FD’s
Bra
nch
Net
wor
k
AT
M N
etw
ork
Inte
rnet
Ban
kin
g
Mob
ile
Ban
kin
g
Growth through innovative product design and outreach
Children‘Pubudu’ & ‘Sapiri’ Minor Savings
Teenagers ‘X Set’ Savings
Professionals
‘Supreme’ Current Accounts, Local & Foreign Currency Savings, FD’s, Housing & other loans
Families ‘Sevana Dayada’ Housing Loans
Corporate Banking
Corporates
Working Capital Financing, Import & Export Financing, Leasing, Guarantees, Corporate Payment System
Organic Growth through superior Service
Development Banking
Corporates Project Financing
Selective GrowthSME’s SME LoansSmall Entrepreneurs
Micro Financing
Trade Services
Corporates LC’s Bills Collections Professional Service using cutting edge technology
SME’sImport Financing, Shipping Guarantees
Individuals Vehicle Import Facilities
Treasury Operations
CorporatesTreasury Bills, Bonds, Repos & Reverse Repos
Understanding Customer needs and delivering best solution
SME’s
Individuals
Credit & Debit Card Operations
ProfessionalsMaster & Visa Credit Cards Affinity Cards
Achieve Industry Leadership
Employed PersonsSelf-Employed
Safeguard Asset Quality
Maintain Stability
Improve Risk Management, Compliance & Corporate Governance
Sustainable Growth in returns
Employees Shareholders CustomersSupplies &
Service Providers
Government & Regulators
Figure 3: Operations Strategy Model of Sampath Bank PLC
(Source: Adapted from Sampath Bank Annual Report 2012)
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As you can see from the figure 3 that it provides a detailed view of the framework of
operations strategy adopted by the Sampath Bank PLC. The figure consists of four main
pillars starting from core areas of operation, stakeholders, products, delivery channels
and at last strategy. Each core areas of operations of the bank is segmented towards
various stakeholders connected with the business and the bank provides specific
products and services tailored to fit the requirements of the stakeholders of their
business. The service of the bank is being delivered via four delivery channels namely
Branch Network, ATM Network, Internet Banking and Mobile Banking. Each area of
operations uses different kind of strategy.
As you can see from the figure that the bank is having diversified products to meet the
requirements of its clients. This is an indication of product flexibility being applied by
the Sampath Bank. Furthermore, the figure depicts the core strategy of the bank
defining areas of growth within the risk appetite of the bank linked to support services
and delivery channels necessary to support the defined growth. Ambitious organic
growth through inclusive banking, consolidate branch operations, improve profitability
through responsive pricing and cost management, safe guard asset quality, technology
driven banking, focus on key customer groups, business growth through innovative
products and pioneering services these are the strategies used by the bank which lead
them towards sustainable growth in returns.
When it comes to banking now a days technologies are being employed by various
banks to streamline their operations and creating sustainable competitive advantage.
That is technology driven banking plays a crucial role towards the success of banks.
Sampath Bank is the first one introduced the ATM in the banking history of Sri Lanka
and is known as the pioneer in applying technologies for the betterment of services
being provided by the banks.
The best way to measure growth is to check on how it has benefited stakeholders as it is
clearly evident by the strategic model being applied by the bank. While being focused
on corporate development and product innovation, the bank has contributed to uplift the
living standards of its stakeholders.
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As you can see from the figure that the bank’s operations strategy model is very
detailed across the operational areas and flexible in reacting to environmental changes.
For a strategy to be effective it must not only be well-fitted to its competitive
environment but it also must be communicated and widely understood throughout the
organization. As far as I know the strategic model being applied by the Sampath Bank is
organic (adaptive to changes in the environment) and well suited to the turbulent
business environment.
9. Concluding Remarks
The banking sector is a key player in the country’s financial system accounting for
69.7% of the total financial sector’s assets. There are 33 banks in operation as of 2012
comprising 12 domestic licensed commercial banks, 12 foreign commercial banks and 9
licensed specialized banks.
The information revolution in computers and tele communications technology has had
and will continue to have a major impact on the financial services industry of Sri Lanka.
Banks in Sri Lanka have to vie with host of competitors not only with other banks but
also with investment companies, finance companies, insurance companies and
brokerage companies. Therefore, success depends on how they differentiate their
services and how adaptive they are to the changes in the turbulent business
environment. Thus, strategy plays a crucial role when it comes to the success of them.
The strategic model or framework of the banks should be organic and should align with
the overall corporate strategy of them. If a bank fails to adapt a model to the changes in
the environment will definitely result in entropy.
What I came to know was the business strategy of Sampath Bank was to take advantage
of an opportunity in the market. The combination of globalization of business coupled
with advances in technology has created a hyper-competitive environment in which
managers must constantly be looking for new and innovative strategies to stay ahead of
competition. The operations strategy model of the Sampth Bank PLC was detailed and
the strategies used in the each operational areas were very good when it comes to facing
the challenges in the modern business era.
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Banks that ignore the important role of operations management within an organization
pay a price: failure. From an operations management perspective banks should focus on
continuously providing high quality service to the customers with shorter waiting times
and better customer service while simultaneously reducing staff and material costs and
increasing the utilization of existing facilities. All of which translates into higher
profitability and lead the banks towards sustaining their business for long.
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References
1. Retrieved from <http://highered.mcgraw-hill.com/sites/dl/free/0070922837/158533/
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