Strategic Analysis of DBS Bank: Management, PESTLE & Porter's 5 Forces

This report provides a comprehensive analysis of DBS Bank, a major banking service firm headquartered in Singapore. It uses PESTLE analysis to evaluate the impact of political, economic, social, technological, legal, and environmental factors on DBS Bank's operations, highlighting the bank's strengths and weaknesses in the Singaporean and Southeast Asian markets. Furthermore, the report employs Porter's Five Forces to assess the competitive landscape, including competitive rivalry, supplier power, buyer power, the threat of new entrants, and the threat of substitutes. Based on these analyses, the report offers strategic recommendations for DBS Bank, such as exploring emerging markets like China, engaging in more business integrations through mergers and acquisitions, diversifying products and services, and legally acquiring workers from neighboring areas to reduce labor costs. The conclusion emphasizes the importance of adapting developmental strategies to maintain a competitive edge in the changing global business environment.

Running head: Management
Introduction to management

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Table of Contents
Introduction......................................................................................................................................1
PESTLE ANALYSIS OF DBS BANK...........................................................................................1
PORTER FIVE FORCE ANALYSIS.............................................................................................3
Strategic recommendations for DBS...............................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7
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Introduction
The bank is one of the worldwide banking service firms. Headquarter is on Marina Bay,
Singapore. DBS BANK was also considered as the Development Bank of Singapore Limited. It
has been seen that company was set up by the Singapore government in July 1968 and the
financial activities are conducted with the help of economic development board. 100 or more
branches are there all over the world. DBS BANK is one of the major banks in South East Asia.
DBS Bank was also awarded as the best digital bank all over the world in the year 2016. Award
was offered by the Euromoney with activities in more than 17 markets. There are more than 250
branches of the company and there are more than 1100 ATM'S in 50 cities. The nature of the
company is related with the banking services and it is a type of public company. The chairman of
the company is Peter Seah Lim Haut and the CEO of the company is Piyush Gupta. The services
provided by the company is related to retail banking, corporate banking, private banking,
mortgage loans and also investment banking.
PESTLE ANALYSIS OF DBS BANK
PESTLE ANALYSIS is a tool which is considered by the marketers and investors to
evaluate the Macro environmental factors which impact the activities of the company. PESTLE
is political, economic, social, technological, legal and economic (Rothaermel, 2015).
Political factor
It has been seen that political stability and political risk in Singapore is low. This type of
environment has boosted local and international investment in the country. The operations of the
company are enhanced due to the development which is taking place in the banking sector
(Rodan, 2016). DBS is one of the important players in this sector which is enjoying the
development of the industry. The Singapore has highly emerging market and there is high
profitability which can be achieved by the company. So, in this context it can be evaluated that
government might enhance the tax rates (Lam, 2015).
Economic factors
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It has been seen that in Singapore there is increase in the labor cost and it is affecting the
company by taking away the cost advantage. When focus is given on the Singapore dollar it is
seen that it is strengthening the overall currency market. This has made the overall process costly
for DBS to conduct the activities in the countries and continents like Europe, Africa and South
America. In Singapore there is enhancement in the high per capita and the overall potential
market has enhanced for the higher end consumers of the services offered by the DBS. There is
labor storage in the Singapore that has brought increase in the labor cost in the country and it is
negatively affecting the DBS Bank (Koha & Tanb, 2014).
Social factors
The overall culture of Singapore is related with hard work and materialism that
encourage the improvisation in the living standard. There is increase in the living standards in the
country that has encouraged the operations of the country including the activities of the banking
sector. This has given advantage to the banking institutions by focusing on the DBS bank. The
High level of education the country has enhanced the labor for the company like DBS Bank.
Technological factors
It is considered as one of the important factor in this framework. It has been seen that it is
a key driver which is related with the economic development in Singapore. It has linked the
overall connectivity and also brought improvisation in the communication system. The country
has global infrastructure related to IT infrastructure. This has boosted the e-commerce on which
the banking industry is more dependent. DBS bank has exploited the opportunity to enhance the
connectivity with the stakeholders. DBS Bank is one of the leading businesses that has
effectively implemented the usage of the Infocomm technology which has also enhanced the
network of ATM and also enhanced the satisfaction level of the customers.
Legal factors
DBS is one of the highly regulated sectors and there are various laws which are related to
protect the right of all the players in the banking sector. With the growth in the economy it has
been seen that the operations of the activities in the country is enhancing. The government is
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likely enhanced the litigation to the both public and also of the financial sector (Egan, Hortaçsu
& Matvos, 2017).
Environmental factors
Overall activities in the banking sector have the adverse effect on the environment. It has
been seen that it is important to be ethical so that environmental responsibility can be enhanced
within the community where the activities are conducted. Singapore is under a severe issue of
environmental pollution due to industrialization. The country of the mangrove forest is under the
threat and it has been depleted by 30% (Sia, Soh & Weill, 2016).
PORTER FIVE FORCE ANALYSIS
Porter Five force analysis is a tool that is considered to evaluate the five competitive
forces that bring shape in every sector. This can also help to analyze the strengths and weakness.
The forces in this model are Supplier power, buyer power, and competitive rivalry, threat of
substitute and also threat to new entry (Dälken, 2014).
Competitive rivalry
It has been seen that the banking industry is competitive and also there is high level of
competition in the market. There are many companies in this sector that are focusing on securing
the good position in the market. In the banking sector every company is trying to induce the
customers to avail their services so that the company can survive in the competitive environment.
It has been seen that banking institution that are located in Europe and America are also
spreading their offers and services to Asian market so that more competition can be given to
DBS banks. The company has considered the strategies which assisted to acquire and maintain
the trust with the customers. The strategy focuses on giving lower financing and also good
investment services with the higher rates. The organization also considers the company
integration like merger and acquisition so that activities can be expanded with the size of the
operations so that in a competitive environment the company can survive (Tan & Sousa, 2015).
Bargaining power of Suppliers
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The basic services for the company in this financial sector are related to the capital. There
are various suppliers of the capital in the banking sector and it is related to mortgages and loans,
customer deposits, mortgage-backed securities and loans from the financial institutions. It can be
evaluated that DBS bank is focusing on proper utilization of the four suppliers so that important
services can be conducted in a proper manner (Khan & Fasih, 2014).
Bargaining power of the buyers
It is the important factor which is giving impact on the power of the buyers in the
financial sector is the high switching cost. There are various consumers who trust a particular
bank with their banking needs, mortgage checking, and savings. The switching cost of the other
company can be costly. It has been analyzed that DBS bank has the benefit to adjust the
bargaining power of the customers (E. Dobbs, 2014).
The threat of new entrants
In this sector it has been seen that it is facing a high threat of entry. It is analyzed that
around 300 new banks are there that are opened every year. It is the barriers to entry which is just
because of the various aspects like high cost of opening and there are also several laws and
regulations related to government. It has been seen that Singapore is one of the countries which
is experiencing a major threat (Tremewan, 2016). In the present scenario, there are many firms
who are led by the DBS bank consider the integration like merger and acquisition as a strategic
measure which manages the threat. DBS bank has acquired various small banking firms so that
competitive advantage can be gained easily. It has been seen that through this benefits can be
achieved which helps the company to grow and achieve profitability.
The threat of substitute
In the banking sector is from the non-financial players like fixed insurance, income
securities and mutual funds. There are fewer substitutes related to bonds and withdrawal
facilities for the companies if focus is given in this sector. Payment technique is the major threat
to all the companies in this sector by considering the DBS bank. For instance: Big companies of
electronic, car companies which provide advanced purchase payment for the great services
which need low-interest rates if the comparison is made with the bank rates. This also
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discourages to take loans from the banks (Schermerhorn, Davidson, Poole, Woods, Simon &
McBarron, 2014).
Strategic recommendations for DBS
DBS should focus on exploring the more emerging markets
It has been seen that DBS Bank is recently considered as the biggest and the best banking
association in Singapore and also in Southeast Asia. This suggests that organization is placed in
the banking sector of particular regions. However, the organization should focus on continuing
the activities beyond Singapore and also Southeast Asia boundaries. There are also developing
markets like China and Japan which has grown in the bank sector. The organizations can
enhance the existence in the regions by finding the branches in many zones.
For instance: China has the biggest population among the various countries globally. The
organization has a great improvisation economy categorized by enhancing the standard of living.
This area shows to create a good atmosphere for finance organization like DBS bank (Koh,
Phoon & Ha, 2017).
DBS should engage in more business integrations
The company is considered as the dynamic participation in the corporate integration
particularly acquisition and merger. The organization has to attain the small businesses in this
sector so as to enhance its size and revenue. The organization should enhance its engagement in
various integrations. Integration with the small institution in the industry can assist the
organization too simply search for its ways in the various emerging markets. For instance: if the
organization acquires with the small organizations in China can enter into the country's banking
sector. This assists DBS bank to increase its activities to the areas which are more suitable in the
funding sector.
DBS should diversify the products and services
The services should be diversified and it is considered as the strengths of the company
which will help to attain the good state in the Singapore and Southeast Asia banking sector. This
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is considered as one of the best strategies which the company should focus on so that growth can
be achieved.
The bank should legally focus on acquiring the workers from the neighboring areas
with a economical pool of the workers
The country has less labor which has given the outcome related to the high labor cost.
The neighboring company like China also has a cheap labor so that company can easily acquire
labor by considering these labors so that production enhances and also the cost of labor reduces.
This will assist the organization to bring improvisation in the overall production and helps in
achieving the profits in an effective manner (Cranston, 2018).
Conclusion
Therefore, by analyzing all the factors it can be seen that DBS bank has attained a large
market share and the achievements are because of the suitable management which has created a
effective relation between the business and the investors. Good relations help to focus on the
targets that the company should achieve to conduct the activities. The better position is also
acquired by the company in the banking sector of Singapore and Southeast Asia. Therefore, just
because of the changing business environment on the global basis the company requires to adjust
the developmental strategies so that in future good position can be achieved. It is important to
achieve success on the global basis so that more profits can be earned in an effective manner.
The strategies that are discussed above will help the company to bring improvisation in the
activities and also the relations can be maintained with the stakeholders and other customers.
It is important for the company to focus on the strategic strategies so that it can be easy
for the company to accomplish goals and objectives. The overall objective can be achieved if the
activities of the company are conducted in a right direction.
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References
Cranston, R. (2018). Principles of banking law. Oxford university press.
Dälken, F. (2014). Are porter’s five competitive forces still applicable? a critical examination
concerning the relevance for today’s business (Bachelor's thesis, University of Twente).
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Egan, M., Hortaçsu, A., & Matvos, G. (2017). Deposit competition and financial fragility:
Evidence from the us banking sector. American Economic Review, 107(1), 169-216.
Khan, M. M., & Fasih, M. (2014). Impact of Service Quality on Customer Satisfaction and
Customer Loyalty: Evidence from Banking Sector. Pakistan Journal of Commerce &
Social Sciences, 8(2).
Koh, F., Phoon, K. F., & Ha, C. D. (2017). Digital Financial Inclusion in South East Asia.
In Handbook of Blockchain, Digital Finance, and Inclusion, Volume 2 (pp. 387-403).
Koha, F., & Tanb, P. (2014). Wealth Management: A Comparison of Switzerland, Singapore,
and Hong Kong. Handbook of Asian Finance: Financial Markets and Sovereign Wealth
Funds, 1, 195.
Lam, N. M. (2015). Development strategies of small economies: Singapore, Hong Kong and
Macao. Asian Education and Development Studies, 4(3), 265-281.
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Rodan, G. (2016). The political economy of Singapore's industrialization: national state and
international capital. Springer.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Schermerhorn, J., Davidson, P., Poole, D., Woods, P., Simon, A., & McBarron, E.
(2014). Management: Foundations and Applications (2nd Asia-Pacific Edition). John
Wiley & Sons.
Sia, S. K., Soh, C., & Weill, P. (2016). How DBS Bank Pursued a Digital Business Strategy. MIS
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Tan, Q., & Sousa, C. M. (2015). Leveraging marketing capabilities into competitive advantage
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Tremewan, C. (2016). The political economy of social control in Singapore. Springer.
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