Bank of Beirut Performance Analysis

This assignment analyzes the performance of Bank of Beirut, focusing on its internal and external factors through a SWOT analysis. It explores the impact of competitive advantages on business growth and delves into the bank's ethical practices and corporate social responsibility (CSR) in alignment with stakeholder theory. The overall aim is to assess the effectiveness and future prospects of Bank of Beirut's banking services.

Business in
Global Context

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Analysis of company’s growth and its performance..............................................................1
PART 2............................................................................................................................................2
SWOT analysis of BOB.........................................................................................................2
PART 3............................................................................................................................................4
Determination of effects of competitive advantages..............................................................4
PART 4............................................................................................................................................6
Ethics and Corporate Social Responsibility (CSR)................................................................6
PART 5............................................................................................................................................7
Reflective summary................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business organisation is a combination of an individual or team of members who unite in
order to attain some specific commercial aim and objectives. These are formed to earn profit for
owners. In order to operate at international level, they need to face various challenges that
consist of HR problems, financial issues, cultural differences and other legal obligations
(Scullion and Collings, 2011). To succeed, financial institution or Bank of Beirut (BOB) is a
commercial bank to comply with host country's rules and regulations as well as other business
practices. This project report consists of various crucial information about BOB’s growth and
performance by analysing its internal and external capabilities. For better performance, SWOT
analysis is done and its effects of competitive advantages are determined clearly. Ethical aspects
and CSR perspectives are discussed in this project. The overall outcomes are reflected by using
entire summary of outcomes collected about international bank in Oman.
PART 1
Analysis of company’s growth and its performance
Bank of Beirut is a well-known commercial bank. It is established in 1963 in Oman with
four branches i.e. Muscat, Sohar, Ghubrah and Wave. This has also developed its one of the
branched in Dubai which is termed as representative office. The Bank currently works in around
90 branches across four other continents that consists of 60 in Lebanon, 16 in Sydney,
Melbourne, Australia, UK, Germany, Cyprus, Qatar, Lagos and Accra. The total number of
bank’s ATM is about 6 in Oman. The mission of this particular bank is to expand monetary
institution in many parts of the country.
The Vision statements of this bank is to make a bright future for each person
(Trompenaars and Hampden-Turner, 2011). The total average number of staff at BOB is 1459
employees. They are always ready for hiring only talented, qualified and experienced employees.
The bank is able to maintain one of the largest networks in Lebanon. The primary activity of
BOB consists of retail banking services, commercial and other correspondent banking services as
well as trade finance in order to target high net worth customers in both domestic and regional
markets. They are responsible for providing cash management services to its customers who
belong to Lebanon. At international stage, bank of Beirut provides commercial banking service
operations in the UK and other parts of Europe through its entire subsidiary. With the targets set
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by bank, they have become the most growing institution in current scenario by there leading
services and operations. They also proved to be the pioneer in more than one segments of
banking business.
BOB is having loans ranging from various housing loans, education, vehicle as well as
personal loan. However, it also offers certain insurance such as LIC, home, schooling life
insurance . It is also associated with online banking services, card payment and other
promotions. It offers commercial banking services in every part of the trade finance that consists
of short term financing. BOB also renders corporate, investment and private management. It
delivers online banking facilities to encourage the customers to see and perform there individual
records through internet mode.
 Market share in Oman: The CEO of BOB said that business in that particular segment
would be trying to increase there market stake in even if the GDP growth rate that falls
in the previous year (Mendenhall and et. al., 2017). With the least number of branches of
just 4, they are having only 8% of total stake as compared to other cities.
 Profitability index for previous year: It is used to determine the relationship among
total cost and benefits of a proposed project. As per the financial statement recognised in
a yearly rate of 7.96% in its total net income generated in the year ending 2015, a ratio of
1.0 is logically be the lowest acceptable measure for total index. Any value which is
lower than 1.0 would determine that the project's PV is minimum than initial investment.
The profitability index states that ratio needed to be greater higher than 1.0 for any
project to get succeeded.
PART 2
SWOT analysis of BOB
In order to determine proper growth and performance, they need to do internal and
external analysis. For getting more effective outcomes, they need to analyse market condition
and internal impacts which are affecting the profitability of Bank of Beirut. SWOT analysis is
the best suitable tool for determining current situation of an organisation.
Strength: It has been determined by its total resources and capabilities that can be useful
as a main aspect of developing competitive advantages. These are mainly known as positive
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outcomes that are making them able to improve its goodwill in front of others. It includes some
benefits such as: Good brand image: It has been seen that BOB is having effective brand image in other
parts of the country with services and facilities offered to customers (Geppert, Matten and
Williams, 2016). With the help of this, customer services can also be increased and they
are highly stratified at the same point of time. Having a wide range of financial services and products: It has been found that plenty of
effective and attractive services are offered to its clients in the form of online banking,
insurance scheme and other short and long term financing facilities. Largest bank portfolio: It has been analysed that BOB is having one of the wide range of
services such as assets, market capitalisation and market share as well as number of
customers and profitability along with many branches. Resources are owned by a
company that has future economic value. It can be measured and expressed in dollar. Position in stock market: According to international financial institution, they are having
a strong presence in the stock market, both at domestic as well as global level.
 Relationship with other banks: Bank of Beirut is associated with making healthy and
profitable relationship by using joint venture and mergers.
Weaknesses:
 If the bank can incurs sales and revenue just from national market and not from global
level then the chance of diversification cannot be done in more efficient manner. It will
require more efforts for expansion of there business units.
 Management team is sometimes not able to deal with every decision that is beneficial for
company (Steers, Sanchez-Runde and Nardon, 2012). It leads to mismanagement of
operations and profitability also gets affected.
 Highest rate of interest in market can also be the major limitation for BOB.
 Banks depend on low based income.
 Weak consumer finance as compared to other banks.
Opportunities:
 Acquisition of new branches can sometimes help them to add support for the group in
order to gain possession.
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 Offering innovative products and services to its clients so that maximum number of
customers can get connected with there banks to avail the services.
 Increasing trends towards internet banking and digital technology. Under this, various
opportunities are introduced with online banking in different countries.
 Increasing customer’s wealth so that efficiency of bank can be increased.
Threats:
 With the implementation of new rules and regulations, it can create more burden on
employees to manage records of customers.
 Competition, market share and brand name are the biggest threats for BOB (Nahavandi,
2016). It is because; there are so many other effective banks that are offering the best and
attractive banking services with minimum risk.
 Political instability between other countries can be another issue that needs to be kept in
the minds of banks. With the changes of government, new rules and policies are
introduced which is not easy for them to grab quickly.
 Economic situations across international level can affect the bank’s services.
 Unstable market can be another problem that BOB needs to face as the risk of investment
is high as compared to normal rate.
 Financial losses, credit problems and unethical behaviour of clients would be the major
threat for bank of Beirut.
PART 3
Determination of effects of competitive advantages
A superiority gathered by an organisation when, it can provide the same point of interest
and value as, its other competitors are offering but at a very low price. It is the situation in which
Bank of Beirut sustains profitability can increases from its industry. Company is said to be in
great chance of getting competitive benefits (What Is Competitive Advantage, 2017). The main
aim of business planning is to attain sustainable competitive advantages so that in the future, they
can come up with new plan and opportunities. It can be a great move of companies over
competitors by offering consumers wide value either by the ways of minimum cost or through
providing large amount of profit sharing . Globalisation develops market dynamics that increase
competition, requirement of expertise in optimisation of supply chain and broad quality or
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efficiency level. The primary role of CA is used for acquiring superior position in the global
market. The majorities categories of CA are cost saving, concentration and differentiation
(Harrison, 2013). There are various effects on the performance of BOB which are affecting them
to gain competitive advantages. Some of them are discussed underneath:
 Operations: The performance of banks are needed to be more effective as they are
related with daily transactions of financial aspects. The managers are required to take
necessary actions regarding increasing goodwill as well as market share.
 HR workforce: Another biggest aspect is about team and individuals which are working
in an organisation. Continuous monitoring over them can be done in terms whether they
are performing their tasks in an efficient manner or not. It is more difficult for
management to manage these task. The efficient allocation of workforce is always said
to be a crucial results of documentation and estimation of performance by HR and
finance.
 Culture: A healthy functional banks can help in providing an effective environment that
supports stronger recruiting, increasing customer intimacy and enhance productivity as
well as increase sense of employee ownership. People required to be articulated the Bank
of Beirut vision which is more clearly and effectively. It can be a complex issue as it
consists of attitude and behaviour of customers those are operative in that particular bank.
The efforts would be made by financial institution and by supervisors to detect the
understanding of culture and its impacts on safety and soundness.
 Innovative and creativity: The banking sector is growing and changing rapidly as an
effective business services. It is important for owners to driver for upward encompass.
The knowledge creativity and ability to take necessary steps in order to increase market
growth as well as profit (Shiel and Fitzmaurice, 2011). The creativity can be done by
implementing new system through which customers can take help without visiting to
bank branches. They are having both positive and negative implications on the
performance and organisational culture. They require innovation and creativity in
thinking as much as any sector. They are responsible for managing cash inflows and
outflows of various businesses.
 Management and leadership style: The essence of leadership consists of changes that
come out in accomplishing particular aim and objectives. Planning is not a representative
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aspect of leadership. It includes orders of current situations. Directive style would be
implemented in a wide structured team as this technique is more effective in generating
more positive outcomes for company. Bank managers should use participative leadership
style to remove stress of employee’s formulation by infusing every level of management
with a point of happiness and concern.
PART 4
Ethics and Corporate Social Responsibility (CSR)
Stakeholders are those individuals and entities that can get affected by firm’s decision
and put direct or indirect impact on a firm. According to the information provided for Bank of
Beirut, all ethical considerations and corporate social responsibilities are needed to be
determined which are performed during the year. Although, top managers are termed as
technically stakeholders those primary role is to operate on behalf of the firm with other outside
stakeholders. Corporate governance is the means by outside stakeholders relation. The main
objective of stakeholders is to make decision according to the aim set by company which can
create interest for shareholders. With CSR activities and perfect corporate governance, the
performance and operations go hand in hand.
Stakeholders theory: It is known as the theory of an organisational management that
explain a business ethics can addresses moral value in managing any business. It suggests that
main objective of banking sector is to create as much value as possible for stakeholders. It is
done so to follow and be sustainable over there decision during that time. The governing body
must keep the interest of customers, supplies, employees and other shareholders allied those are
active in same directions. Stakeholders theory states that the objective of BOB is to develop and
create value for stakeholders (Aronczyk, 2013).
In the recent scenario, CSR is receiving an increase in attention from academic and multi-
disciplinary perspectives. Several key approaches are important areas of CSR that have remain
under explored and existing performance of banks. Under this case, bank of Beirut is having
good images and does continuous corporate social responsibility in both empirical and
theoretical nature. This particular study examines a broader research on stakeholders theory that
tests the essence of consideration in accordance with corporate strategies. Every stakeholders by
distinguishing a coordinated system of long-lasting relationships with the individuals. CSR is a
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concept whereby banking sector combines social and environmental interest in their business
dealing with their stakeholders on a voluntary basis. It means that there is a strong bonding
between CSR and stakeholders because they are related with rational processes that banking
company is able to develop at internal and external level.
CSR Lebanon held its 6th annual convention in the ongoing examination of the impacts of
social programs on corporate success that are determined under their projects. According to
juridical bodies, businesses are looking for different ways in current integrated social impact
through using well organised corporate social responsibility (Bloom and et. al., 2012). Saad
Azhari, chairman and general manager of bank, spoke regarding the bank’s aim at incorporating
social responsibility. It consists of humanitarian advantages. It has been expressed that banks are
providing special credit card that can help in removing mines and clusters bombs by helping
small monetary finance upon every transaction made by customers.
The performance of banks is monitored by using automatic application software which
can detect any unethical practices that are affecting the profitability of banking sector. The major
target is to provide maximum support system to customers so that they can anytime contact with
banks. All financial institutions in common have been keen on developing their social
performance in the current business scenario. Every decision-making done by top management is
essential for the benefits of society as well as economic sustainability.
PART 5
Reflective summary
From the above studies, it has been summarised that Bank of Beirut is one of the fastest
growing banks in most parts of the nations. Their expansion is covering many areas whether at
domestic or international level. It is responsible for delivering commercial, corporate and retail
banking in overseas through conventional and digital banking modes. With their innovative
services, they are liable to deliver more efficient solution to customer’s common issues. It was
developed as a reality business bank. The particular role of bank is to deposit products which
consist of current, savings and time deposit accounts. It offers personal and small business loans.
The project finance service also offers personal motor, educational housing and small business
loan to customers that are making new steps in setting up their business venture. BOB is
operating their business through various segments such as banking, insurance and management
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of funds. It also offers a wide range of financial solution that consists of savings, loan, trade
finance as well as corporate management.
According to the study, it has been found that growth and performance of banks are based
on the decision-making which is done in order to improve the market image in front of other
banks. The use of appropriate tools is for analysing internal as well as external aspects that are
making huge impacts on the profitability and efficiency of banking businesses (Osland, Bird and
Oddou, 2012). There are various effects that are making competitors able to offer competitive
advantages to company. The operational activity which are performed by a BOB banks are
determined in more efficient manner. The banks is delivery more valuable services to its
customers by offering wide variety of benefits to them. Plenty of customers are attracted towards
online services those are easy to make transactions without going to banks.
Every effects that are analyse during formulation of business planning, it is necessary for
them to make use of information in the benefits of customers in long run. Examination of ethical
aspects of CSR activities are operate by bank of Beirut in order to increase their profitability.
Compliance of bank in accordance by using stakeholders theory (McCann and Ward, 2011). It is
essential for them to provide better technology in saving information of customers those are
regular client of BOB. Customer enquiry system is needed to be developed so that quick
solutions can be provided to them.
CONCLUSION
From the above report, it has been concluded that business is more crucial aspects for any
organisation. This project consists of various information about banking and other financial
services those are delivered by bank of Beirut. The performance of banks are analysed by using
internal and external information. The analysis is done by using SWOT and evaluation of
various impacts of competitive advantages on the growth of business are discussed underneath.
Ethical and CSR analysis of compliance of banks though using stakeholders theory are explained
in well organised manner. The overall performance of banking services are more positive and
effective in order to make better future.
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REFERENCES
Books and Journals
Aronczyk, M., 2013. Branding the nation: The global business of national identity. Oxford
University Press.
Bloom, D and et. al., 2012. The global economic burden of noncommunicable diseases. Program
on the Global Demography of Aging.
Geppert, M., Matten, D. and Williams, K. eds., 2016. Challenges for European management in a
global context: Experiences from Britain and Germany. Springer.
Harrison, A., 2013. Business environment in a global context. Oxford University Press.
Mendenhall, M.E and et. al., 2017. Global leadership: Research, practice, and development.
Routledge.
Nahavandi, A., 2016. The Art and Science of Leadership -Global Edition. Pearson.
Osland, J.S., Bird, A. and Oddou, G., 2012. The context of expert global leadership. In Advances
in global leadership (pp. 107-124). Emerald Group Publishing Limited.
Scullion, H. and Collings, D., 2011. Global talent management. Routledge.
Shiel, M. and Fitzmaurice, T. eds., 2011. Cinema and the city: film and urban societies in a
global context (Vol. 48). John Wiley & Sons.
Steers, R.M., Sanchez-Runde, C. and Nardon, L., 2012. Leadership in a global context: New
directions in research and theory development. Journal of World Business. 47(4). pp.479-
482.
Trompenaars, F. and Hampden-Turner, C., 2011. Riding the waves of culture: Understanding
diversity in global business. Nicholas Brealey Publishing.
McCann, E. and Ward, K. eds., 2011. Mobile urbanism: cities and policymaking in the global
age (Vol. 17). U of Minnesota Press.
Online
What Is Competitive Advantage?. 2017. [Online] Available through:
<https://www.thebalance.com/what-is-competitive-advantage-3-strategies-that-work-
3305828>.
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