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Bank of Maldives SWOT, Pestle and Porter's Five Analysis

Paper Type: Free Essay Subject: Business
Wordcount: 5431 words Published: 5th Dec 2017

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Bank of Maldives Overview

On 23rd May 1982, Bank of Maldives was registered (Company Registry No. C-22/1982) with Ministry of Home Affairs as a company. On 10 November 1982 BML was registered at Maldives Monetary Authority and was given license to provide banking business in the Maldives. http://www.indexmundi.com/g/g.aspx?c=mv&v=71

Joint venture with IFCI

On November 11, 1982 Bank of Maldives Plc was inaugurated and started commercial operation as a joint venture bank with 60% shares held by the Government of the Maldives (including its Agencies and Maldivian Companies) and 40% shares owned by International Finance Investment Company Limited (later IFIC Bank Limited), Dhaka, Bangladesh.

Until 31st December 1992, the Bank was managed by the professionals of IFIC Bank Limited and they were paid 10% of the Bank’s profit. During the tenth year of the Bank, the Government of Maldives decided to re-structure the Bank of Maldives as such requested the IFIC Bank Ltd to reduce the share holding and also the number of representation in the Board. Consequently IFIC Bank Ltd decided to dispose off its entire shares in the Bank of Maldives and terminate its relations with the Bank with the expiry of the Management Contract on December 31, 1992.

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Bank of Maldives Become Public Limited Company

Government of Maldives purchased 40 per cent shares On 14 November 1992, held by IFIC Bank Ltd. As a result, 80 per cent of the share capital of the Bank of Maldives was owned by the Government while the remaining 20 per cent of the share capital was sold equally to the State Trading Organization and Maldives Transport and Contracting Company respectively.

Company Shares

Government decided and started, to sell Bank’s shares to the general public In December 1992, by way of a assessment to expand the Bank’s capital. From January 1, 1993, Bank of Maldives Plc has become, and since then remained, a bank fully owned by the people and the Government of the Maldives.

The Bank of Maldives Plc issued shares during 1993, 1994, 1995, 1996, 1997, 1998 and 2007. In 2007, Memorandum and Articles of Association of the bank was revised, shares were split and bonus shares were given to the existing shareholders. As a result the authorised caiptal of the bank was increased from Rf 300 million to Rf 800 million. The face value of BML shares stand at Rf 50/-.

Bank of Maldives Branches

Bank of Maldives has 25 branches in the country Maldives. Out of 25 three branches are in Male’, the capital, and 1 branch in Male’ International Airport (Hulhule’ Island) and 01 each in both Villingili ward and Hulhumale’. The other branches of Bank of Maldives are distributed amongst the atolls of the country, each with a chosen command area. Therefore, the Bank of Maldives Plc is able to serve the whole nation.

Strategies for businesses

The main business of Bank of Maldives is retail banking in addition Bank of Maldives handle most of the development banking activities in all the atolls of the Nation, Bank of Maldives PLC covers a variety of modern banking services online in a fully computerized environment and is proud to be serving the nation as the leading bank in the Maldives. http://ebanking.bankofmaldives.com.mv/page/view/n/company/o/introduction

Businesses are often so preoccupied with immediate issues that they lose sight of their ultimate objectives. That’s why a business review or preparation of a strategic plan is a virtual necessity. This may not be a recipe for success, but without it a business is much more likely to fail.

A business strategy is a pattern of decision and actions that are taken by the business to achieve its objectives. Business planning involves deciding what is to be done, setting objectives and developing polices to achieve them. Strategic process is steps taken to achieve those objectives.

Frame Work of Business Strategy

In practice, strategic management process has three main components, shown in the figure below.


There is a number of stages involve in the planning process. These include

Identifying the objectives

Analalysing the positions of the business

Deciding on suitable strategy

Implementing a suitable strategy

Evaluating its effectiveness

Strategic Planning Process



Mission statement includes descriptions of the overall aims of the business and they tend to be aimed at stake holders in the business. Stakeholders are those individuals or groups that affect or have interest in how the business is running and also what it achieves. Mission statement of business will include information for all key stake holders of the business including employees, shareholders, and also customers.

Bank of Maldives Mission statement

“We will lead the way through quality of service and dedication of our staff. We will serve all our communities to the best of our ability, strive always to listen to your needs and so build total customer confidence and satisfaction”

From BML Mission statement I found that the mission that the company established is based on blending the various interest of range of stakeholder grouping.

Example one of the objective mentioned in mission statement is ‘to lead the way through quality of service and dedication of our staffs’ it will benefits many stakeholders because customers will receive high quality product and services, shareholders will receive high dividends, employee will receive good wages, and so on.


A vision statement is sometimes called a picture of your company in the future but it’s so much more than that. Vision statement is our inspiration, the framework for all our strategic planning.

A vision statement may apply to an entire company or to a single division of that company. Whether for all or part of an organization, the vision statement answers the question, “Where do we want to go.

Vision statement of Bank of Maldives

To be the leader in the financial industry in Maldives, spreading its presence in all key economic geographies in Maldives

To be the leader in the financial industry in Maldives, inculcating a long term saving culture in the nation and promoting a cashless society

To be one of the most Efficient, Profitable and Respected financial institutions in Maldives.




The bank values lot of things like innovation, giving respect to others and receiving respect from others, also communication, innovation and integrity.

Stakeholders of the business

Customers – Customers are one of the key stakeholders of the business as they are vital to the survival of the business. Bank of Maldives provides excellent services to its customers and has excellent relationship through respects, friendly services and also greeting and so on.

Shareholders – Bank of Maldives try to give maximum benefits to its shareholders and also have good relationship with them. The Annual General Meeting of the company is used to have an effective discussion with the shareholders on matters and issues which are of relevance and of concern to the general membership. The Bank’s website also provides information for the shareholders of the business.

Employees – Employees are other key stake holders of the company. Bank of Maldives has various ways. Bank provides training programs to employees to familiarize them company’s policy and working practice. Bank also provides many packages and development opportunity to its employees.

Suppliers – In today’s environment it is very important for good relationship to exist between business and suppliers.

Government – Government can influence and affect business in number of ways. Bank of Maldives has to follow the rule and regulation that is made by the government. And also government is 51% shareholder of the bank. Therefore provide full support to the company.

Hierarchy of Objectives

There are two types of objectives, corporate and functional level objectives. At the top level of an organization will often create a ‘vision’ setting what and where they want to be in long run or in future and also the top level of organization will often create ‘mission’ setting out the purpose of the organization and also mission statement is a path way to achieve its vision and then Organizations will create a hierarchy of objectives. The hierarchy of objective is a breakdown of

  • Mission
  • Corporate Objective
  • Functional/Departmental Objective
  • Team objective
  • Individual Objective

the objectives and presenting in a more understanding and also able to manual to the operational/functional level of employees of the organization. This process is because organizations believe that each and every individual should be clear of what is expected from them in order to accomplish the corporate objective.

Strategic analysis

Strategic analyses is all about analyzing the strength of businesses’ position and also analyzing the weakness and understanding the important external factors that may influence and effect the business position. The business strategy of a company provides the big picture that shows how all the individual activities are coordinated in the organization in order to achieve a desired end result.

It is through the strategy process that the overall direction of the company is established. This is based on the external opportunities and threats, outside the organization or external environment creates, also the internal strengths and weaknesses of the business. There are many tools for process of Strategic Analysis which we can use to analyze the business such as:

  • SWOT Analysis
  • PEST Analysis
  • Scenario Planning
  • Five Forces Analysis
  • Market Segmentation
  • Directional Policy Matrix
  • Competitor Analysis
  • Critical Success Factor Analysis

SWOT Analysis

We can use SWOT analysis as a tool to conduct a general or detailed picture of a company’s health. SWOT analysis is quick examination of a business current position so that it can identify internal strength and weakness and also external opportunities and threats.


  • Financial stability and bank is well capitalized and this has enabled it to perform relatively well with largest financial network of 25 branches and 37 ATMs in Maldives.
  • Highest market shares/over 260,000 loyal deposit account holders/ Over 53,000 lending relationships
  • Government helps since it has 51% their share power
  • Most effective recruitment and selection process and over 748 dedicated employees
  • Awarded for 3 years about their customer satisfaction methods.
  • Easy transections for its customers
  • Updated technology as leader in electronic banking in card issuance with a wide network of POS terminal
  • Nations most trusted company with the highest transections and strong customer relationship
  • 27 years banking service in the market and well branded in the country Annual report 2009


  • Less number of employees to deal with their daily transections and customers problems.
  • Limited dollar providing
  • Difficult to get loans compare to their competitors

Maldives is facing shortage of US dollars these days and most of the Expatriate working in Maldives is paid in Rufiyaa. Even to buy dollars from Bank of Maldives is something impossible these days. Due to the shortage of dollars most of the businesses are facing problems since Maldives import almost everything and businesses need to transfer their money to their suppliers. Also the foreigners those who are working in Maldives are paid in Rufiyaa and they also face problem due to shortage of dollars.

I think that the shortages of US dollars are due to the world economy experienced tremendous instability in the year 2009, due consequences were felt in the Maldivian economy as well. The depression in tourism industry and fisheries industry played huge role as it posed numerous effect while the US Dollar liquidity crisis contributed added to the challenges being faced by the Bank.


  • Since they have got a good financial stability they can expand their business to other islands
  • Sell more shares to the public market. It will increase their customers and also will be able to have a better capital to provide a good service
  • To deal with their daily transections and to get experience from developed banks like Swiss bank they can ask from the government talk about it with them.


  • Recently have stopped providing any types of card to the customers
  • Economic crises
  • Competitors

I think the strengths of the company can be assessed as company’s resources and also the company capabilities which can be used as a root to achieve its objectives and goals and also for developing a competitive advantage. There are many external threats and opportunities which organization has to face. So that Business can try to maintain the strengths and try to overcome from the weaknesses as internal factors those can be controlled by the business, but external factors cannot be controlled by the business because they are independent. Therefore business can try to take advantages of opportunities so it can be key to be success in future and have to try to manage the threats as well. Or have to try to reduce its negative influences to the organization.


It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning.



In Maldives government doesn’t influence most of the business. But Bank of Maldives is a government company so they take decisions according to their political decisions. Most of the businesses in this country are private business. Government helps to their business to carry it with the highest level they can and to expend it.

However they have recently announced that they will make new rules to the tertiary sector business. So it’s important for them to update the changes and obey the rules and regulation of ministry of trade and industry.

The political changes need to be monitored very often especially during these days. As there is changes in political system or due to the implementation of party system in the country and the new laws passed by the government plays a vital role in today’s business climate. So, I feel that the management and investors needs to be cooperative with the new system and government in order to keep running in the market.

Moreover, Bank of Maldives is one of the biggest service industry in the country and also it is central bank of Maldives so political factors may effect the business for some extent.


After the tsunami the country was developing rapidly their business and starting new business. Inflation of country is controlled in recent years. Mixed economy is one of the key features of the country that take account of tourism, fishing and other industry.


Mixed economy plays huge role in businesses growth and is can be an important aspect of the Maldives economy hence for most of the company government helps and government have shares in most of the leading company such as State trade Organization plc., Bank of Maldives and so on, In 1989, the economic reform program implemented by the government lifted the import quota and encouraged exports to the private sector. Later on, the liberalized conventions allowed more foreign investments. Therefore I feel one of the targeted markets for Bank of Maldives that is foreigners became the customers of the business. http://www.economywatch.com/world_economy/maldives/

On the other hand, GDP reduced in 2007-08, then contracted in 2009 and the reason may be due to the worldwide recession. Falling tourist arrivals and fish exports, combined with high government spending on social needs, subsidies, and civil servant salaries contributed to a balance of payments crisis in 2009. Diversifying the economy beyond tourism and fishing, reforming public finance, and increasing employment opportunities are major challenges facing the government.

Maldives GDP- Real growth rate (%)


Therefor Bank of Maldives may face economic problems in upcoming years. So it is very important for BML to keep an eye on economic changes that comes every now and then. Taking in this aspect, interest rate and inflation plays a keys role. A very slight change in the interest rate brings a change in the price of product. So I would advise the management to observe the economic changes that comes very often.

On the other hand most of the stakeholder of the company believes that in upcoming year economy will be favorable to the business.

Moreover, in the market Bank of Maldives have got so many new competitors like HSBC and Bank of Ceylon. Most of the people still trust Bank of Maldives because of being the oldest Bank in the country and also it’s under the control of government. Most of the transaction are done in the capital city. So economically they will face much trouble from other business, Because HSBC can be a competitor who will be able to get market share. They have the best dollar providing service. When looking in to the people perspective, most of the people have bank accounts. And all most all the people are aware about the modern world

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Maldives economy is based on about the social could be their spending is higher and less saving. This way happens mostly with the youngsters. Everything for them is fun and enjoying. And each every of them has their own bank account. That’s why it increases the bank transection. Also government employees should have bank account in BML and most of the money transections of government are done through BML. Bank of Maldives caters to customers in unbanking islands through its Dhon services, Also facilitator of infrastructure development to enhance the living standard of local community.

BML extends its support to various initiatives in view of the socioeconomic benefits. Among these initiatives BML cosponsored GCE High Achievers Award ceremony and worked alongside the Maldives Police Service to create awareness regarding counterfeit currency. Furthermore BML also extended its support through providing sponsorship for the Democracy Fair held during 2009 and the fisherman’s day activities. Further efforts to extend our corporate responsibility stance involved daily collection facilitation for state insurance scheme “Madhana” by all branches of the Bank. BML fully funded the acquiring of an ECG Treadmill for IGM Hospital for the benefit of patients utilizing the services of the hospital. BML is the pioneer and leader of microfinance facilities for rural development and to SME sector projects throughout Maldives. These loans significantly contribute to improving the livelihood of rural communities, alleviating poverty and creating employment opportunities.

BML report 2009


Technology is vital to gain competitive advantage, and is a major driver of globalization. Changes in technology have also become mainly weighty in the world. This is for the most part true in terms of modern communication technologies todays environment. The creation of databases and electronic communications help to have easy communications and have enabled huge quantities of information to be shared and quickly distributed all around the world with cost reductions, and often improvements in service and product. Organizations need to be aware of the latest relevant technologies for their business and due to high competition in the market.

Bank of Maldives use latest technology to implement business processes, manage risks and provide excellent customer service. Such as Online electronics banking, mobile banking and internet banking, ATM service etc. Also bank is fully computerized and provides almost all the banking services needed for the citizens and business establishments in Maldives.

There for I suggest bank of Maldives it is very important to be in touch with new technology as the technology has brought the people together with the best, comfortable and convenient life. Also technology is one of the biggest issues in modern world and also to provide best services to its customer and to create competitive advantage against rivals in the market.

Porter’s Fives Forces

Five Force analyses assume that there are five important forces that determine competitive power in a situation. These are:http://www.tutor2u.net/business/images/five_forces.gif

Threat of New Entrants

The number of business in a market may not be always be a useful guide to completion in that market. New entrants to an industry can raise the level of competition, by this means reducing its attractiveness an also if it is easy for business to enter markets then the competition likely to be greater. The threat of new entrants largely depends on the barriers to entry. High entry barriers exist in some industries. Key barriers to entry include:

  • Economies of scale
  • The need of Capital or investment requirement
  • Customer switching costs
  • Access to industry distribution channels
  • The likelihood of retaliation from existing industry players.

Bank of Maldives is the only local bank in Republic of Maldives. There are other banks like State bank of India, Habib Bank, HSBC bank, etc in Maldives, but they do not have more than one branch.

I am not sure if there is any restriction to open more than one branch for foreign banks in Maldives. Bank of Maldives has many branches in Male’ the capital of Maldives as well as in remote islands.

In my point of views It is difficult for new entrants to enter in banking industry due to threat of new entrants largely depends on the barriers to entry. To enter in the banking industry in Maldives for local business it will be difficult due to capital requirement they need to invest on the business, and also it is difficult to gain economies of scale. Also Bank of Maldives is one of the highest distributors with 25 branches all over the country.

Threat of Substitutes

This depends upon the extent to which business can differentiate their products from those of competitors .The substitute products can lower industry attractiveness and profitability because they limit price levels. The threat of substitute products depends on:

  • Buyers’ willingness to substitute
  • The relative price and performance of substitutes
  • The costs of switching to substitutes

Bargaining Power of Suppliers

Suppliers are the businesses that supply materials & other products into the industry. Powerful suppliers can increase the cost of a business. If suppliers have high bargaining power over a company, then in principle the company’s industry is less attractive. The bargaining power of suppliers will be high when there are number of suppliers and also when there are many buyers and also the importance of the product which is supplied or undifferentiated, highly valued products bargaining power of supplier will be high.

For BML bargaining power of suppliers will be less due to more dominant supplier like Rainbow, all brothers business and so on.

Bargaining Power of Buyers

Buyers are the people / organisations who create demand in an industry. The bargaining power of buyers is greater when

  • There are few dominant buyers and many sellers in the industry
  • Products are standardized
  • Buyers threaten to integrate backward into the industry
  • Suppliers do not threaten to integrate forward into the buyer’s industry
  • The industry is not a key supplying group for buyers

For BML I feel bargaining power of buyer is less because BML is only a company that caters the customers all over the country and they have branches in many part of the country and also the other competitors such as HNB is have only one branch in the country which is also is located in capital Male’.

Intensity of Rivalry

The intensity of rivalry between competitors in an industry will depend on:

  • The structure of competition – for example, rivalry is more intense where there are many small or equally sized competitors; rivalry is less when an industry has a clear market leader. BML is a market leader of Banks in Maldives.
  • The structure of industry costs – for example, industries with high fixed costs encourage competitors to fill unused capacity by price cutting
  • Degree of differentiation – industries where products are commodities (e.g. steel, coal) have greater rivalry; industries where competitors can differentiate their products have less rivalry . For BML the degree of differentiation is higher than the other competitors.
  • Switching costs – rivalry is reduced where buyers have high switching costs – i.e. there is a significant cost associated with the decision to buy a product from an alternative supplier
  • Strategic objectives – when competitors are pursuing aggressive growth strategies, rivalry is more intense. Where competitors are “milking” profits in a mature industry, the degree of rivalry is less
  • Exit barriers – when barriers to leaving an industry are high (e.g. the cost of closing down factories) – then competitors tend to exhibit greater rivalry.

Having a good pricing strategy and a good customer care will enhance Bank of Maldives to catch up the marker easily and maximize the profit.

GAP analysis

Bench Marking

“Benchmarking is the process of measuring an organization’s internal processes then identifying, understanding, and adapting outstanding practices from other organizations considered to be best-in-class.

By Benchmarking the business can discover performances of the business compare to competitors or with the organization which the business is bench marking and also can identify the most compatible for the business to bench mark..

Source: http://www.benchnet.com/wib.html View date: 20 November 2009

Core Competency

Core competencies are those strengths or abilities that are critical to a business achieving competitive advantage. Senior management cannot focus on all activities of a business and the competencies required undertaking them. So the goal is for management to focus attention on competencies that really affect competitive advantage.

The Core competencies are the most significant value creating skills within Bank of Maldives and key areas of expertise which are distinctive to the business and critical to the Bank of Maldives long term growth. I believe core competencies are the thing that Bank of Maldives can do better than the competitors in the field. So there are competitive advantages in Bank of Maldives that is difficult to imitate by the competitors in the market to gain the core competencies. The loyalty customers had towards the Bank of Maldives is a core competency that business had, compared to the competitors, and is also high. Customer care had a great impact on the business as well since the employees services to the customer of human resource cannot be copied by competitors.

Segmentation and Products and services of Bank of Maldives

Segment Analysis

By Geographical segment- Bank operate only in Maldives

By business segment

Retail banking

Corporate banking

Electronic banking

Development banking

Bank of Maldives

Corporate Banking

Loans and leasing

Working capital facilities

Working capital facilities

Investment financing

Credit card lines, electronic banking and foreign trade services and so on

International Banking

Electronic Banking

Mobile Banking

Online Banking

ATM Services

Development Banking

For Bank of Maldives using technology such as ,Automated Teller Machine, online banking and Mobile banking will reduce the amount of transections of bank and customers can acquire services at their offices every day. Also the bank can gain from such services, is reducing their operational costs via decrease in tellers and cashiers, when less number of customers attend the bank to get the services. Right now the bank is charging Rf 2 per any transaction on an Automated Teller Machine (ATM), and Rf 1800 for internet banking services with account to account transfer services. For the Bank implementing such services incur a huge cost.

BCG Matrix

The BCG matrix technique is based on the product life cycle concept that can be used to determine how much importance should be given in the product portfolio of a business element. To make sure long-term value creation, a company should have a portfolio of products that contains both high growth products in need of cash inputs and low growth products that generate a lot of cash. It has two dimensions. The first one is market share and second dimension is market growth. The basic idea behind it is that the larger the market share a product has or the faster the product’s market grows the better it is for the company.

http://cnx.org/content/m35356/latest/ Last edited by Jared Adler on Oct 6, 2010 1:05 pm GMT-5.

The four categories are:

Dogs – Dogs have low market growth and low market share and do not generate any money or consume a large amount of cash. So they need to be killed

Question marks – Question marks are also called as problem child and might have future potential as they are in growth market, but the sales are not particularly good. Also with rapid market growth and also consume large amount of cash due to low market share they do not generate much money. Such as Online banking and Mobile banking are question mark products of Bank of Maldives.

Stars – star products are those who with a large share of high growth

Cash cows – As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market


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