Associate Banking Diploma — Core Subject
Strategic Marketing Management
Objective
 To enable you:

1. To learn and understand concepts, processes, methods, approaches, issues and managerial task involved in Strategic Management in banking and non-banking organisations.

2. To think and manage strategically and to identify alternative strategies for coping with varied external and internal environments/situations.

3. To integrate and apply all materials covered in previous courses to explore and design competitive or winning strategies.

4. To integrate strategic management, marketing and financial strategies to gain competitive advantages.
3.0 Brief Outline/Syllabus
3.1 Changing (Financial/Banking) Environment, Banking Business and an overview of, and need for, strategic Management and Marketing, and Business Development.
3.2 Development of a Mission (business concept); objectives and a strategy/strategies.
3.3 Situation Analysis: External and Internal Environmental Analysis.
3.4 Alternative Business Strategies.
3.5 Marketing Strategy Elements.
3.6 Strategic Planning and use of Information Technology (T) in Banking and Finance.
3.7 Strategy Implementation, Control and Evaluation.
3.8 Selected and contemporary topics/issues in Strategic Management in banks and other business.
4.0 Syllabus in Detail
4.1 Financial/Banking Environment, Banking Business and an overview of, and need for, strategic management and marketing and business development.
  4.1.1) Changing (Financial/Banking) Environment in Tanzania and the world:
• The concept of organisational/Banking Environment.
• Environmental factors/forces: political; economic (including reforms); legal and regulatory; technical; competitive; social and cultural - ethics environment etc.
• Key driving forces and trends in the environment.
  4.1.2) Banking Business:
• Definition of Banking
• Role of banking system in the Economy: Financial intermediation.
• Types of bank financial intermediaries and non-bank financial intermediaries.
• Traditional Vs Modern Banking Business/Functions.
• Competition and Diversification of Banking business/markets/products/services.
  4.1.3) Strategic Management and Marketing:
• The relationship between Corporate Planning and Strategic Planning.
• The concept of Strategic Management and Marketing.
• The Strategic Management Process: Kay managerial tasks/phases.
• Requisites for successful strategic planning.
• Need and benefits of strategic management and marketing; and strategic thinking.
• Key terms.
  4.1.4) Business Development Concept; Business development and competitive strategy; and modalities of business development.
4.2 Developing Strategic Plan: MISSION (BUSINESS CONCEPT); OBJECTIVES AND STRATEGY.
  4.2.1) Developing the organisational mission: concept and rationale.
  4.2.2) Setting objectives:
• Types of objectives: Long-term Vs short-term; Strategic, financial and marketing objectives etc. and hierarchy of objectives.
• Characteristics of effective objectives.
• Rationale for setting objectives.
  4.2.3) Formulating strategy/strategies:
• Hierarchy of Strategies: Corporate, Business, Functional and Operating.
• Factors that influence the strategy.
• Approaches to strategy formulation.
• Characteristics of a good strategy.
4.3 Situation Analysis: EXTERNAL ENVIRONMENT AND INTERNAL (ORGANISATIONAL) ENVIRONMENT ASSESSMENT:
  4.3.1) External Environment Assessment:
• Industry/Market attractiveness/potential analysis: Industry and aggregate market factors; Porter’s 5 forces model; environment factors and industry driving forces.
• Competitor analysis: Factors (objectives, strategies, moves, capabilities etc.) and techniques.
• Customer analysis (current and potential customers (who, what, where, when and how they buy and use products and services); customer behaviour and segmentation analysis: variables, benefits and costs; and characteristics of viable market segments.
• Sales forecasting methods: qualitative and quantitative.
  4.3.2) Internal Assessment:
• Key issues/questions/factors in organisation/ bank situation analysis (Thompson, et al, and Channon p.69-73, etc.).
• Key success factors (KSF) or unique competitive advantages (UCA) e.g. Human resource (characteristics, quality and productivity of bank top management and staff); Marketing Strength, Technology/operations/ facilities; Financial resources and strength; bank image/reputation; product/service: range, quality, delivery, availability, pricing, and other KSFs.
• SWOT analysis: Strengths, weaknesses and external opportunities and threats.
• The Process and Techniques for analysing diversified organisations (Thompson, Ch.8).
4.4 Alternative Business Strategies:
  4.4.1) Determinants and selection of strategic options: approach, criteria and techniques
  4.4.2) Strategic options/alternatives:
• Generic competitive strategies: low cost leadership; differentiation and focus/niche.
• Offensive and defensive strategies: types and use.
• Diversification strategies: type, benefits and drawbacks (Thompson, Ch.7).
• Vertical integration strategies.
• Strategies for different external and internal environment (Thompson, Ch.6).
• Market and Marketing Strategies: (I) Market Strategies: market-scope strategy (single, multi - and total-market strategies); Market-geography strategy (local, regional, national or international-market strategies); Market-entry strategies (be-first-in the market, early-entry and laggard-market entry strategies); Market - commitment, strategy (strong commitment) average-commitment and light commitment strategies) and market-dilution strategy (demarketing; pruning-of-marginal markets; key-markets and market-harvesting strategies) (Jain, Ch.8) and (ii) Marketing strategies: market development; market/business positioning; product development; and diversification.
  Bank Financial Management Strategic decisions: Asset management, liability management, capital management, off-balance sheet activities management, liquidity management, credit risk management, interest rate spread; management of the burden (operating costs) and tax management etc.
• Financing strategies to finance new product/service development, new market and business growth: Asset-Liability management strategies; acquisition/mergers; strategic alliances; leasing/ factoring; going public; private placements; management buyouts (MBO); employee stock ownership plans (ESOPs); venture capital; franchising etc.
• Other business strategies e.g. Restructuring/Divestitures, etc.
4.5 Marketing Strategy Elements
  4.5.1) Product/Service Range and Development strategy
• Planning Corporate Account Strategy.
 

4.5.2) Pricing Strategy.
4.5.3) Distribution/Delivery System Strategy.
4.5.4) Promotion/Communication Strategy
• Selling Strategies: The Selling Process.

4.6 Strategic Planning/Management and use of Information Technology (IT) in Banking and Finance.
• IT in finance
• System Development Process
• Business information systems strategic planning
• Information Processing in Banking and Finance
• Strategic use of IT and Management information system (Fawcett/CBI, Reynolds, Ch.4 & 8 and Devanna, Ch.9).
4.7 Strategy Implementation, Control and Evaluation:
  4.7.1) Strategy Implementation:
• Fundamentals or conditions for successful implementation of strategic planning and management.
• Critical managerial tasks for successful implementation of the strategy (Thompson Ch.9 and 10).
• Preparation and execution of operational plans: resource, organisational, budget and profit plans.
4.7.2) Control and Evaluating a strategy/strategies:
• Concept: Organisational control; Strategic control; Management control and operational control.
• The Control Process.
• Requirements of a good control system.
• Techniques/methods of control.
• Problems of control.
• Evaluation of strategic planning system and strategies: evaluative criteria/questions and techniques (Channon, Ch.3 and Higgins & Vincze, Chap. 9).
4.8 Selected and contemporary topics/issues in Strategic Management in Banks and other business:
  1. Selected strategic concepts, techniques and models.
2. Human Resource Management (HRM) as a competitive strategy:
    Enhancing Productivity and Customer responsiveness.
3. Creating competitive sales force and programmes.
4. Managing effectively strategic and organisational changes.
5. Managing financial innovations: Definitions, modalities, etc.
6. Contemporary and future trends and issues in strategic planning and management:
    challenges ahead.

THE EXAMINATION

Time Allowed: Three hours

Examination Format: Attempt four (4) questions each 25 marks.

RECOMMENDED READING LIST:

1. TIOB (2003) Strategic Marketing Management. Central Printing Works, Dar es Salaam
2. Thompson, Arthur A., Jr. and A.J. Strickland: Strategic Management: Concepts and cases, 6th ed. Homewood, Illinois: Irwin, 1992.
3. Higgins, James M. and Julian W. Vincze: Strategic Management: Text and Cases, 4th Edition, Chicago/ London: The Dryden Press, 1989.
4. The Chartered Institute of Bankers: Banking Operations in a Changing Environment: The Profitable Use of Resources, London, 1991.
5. The Institute of Bankers: The Banks and Personal Customers, Cambridge Seminar, London 1983.
6. BAFIA, 1991, BOT Act 1995 and other financial/banking Acts.
7. Banking and Prudential Guidelines/directives issued by BOT.
8. CASE STUDIES: Selected Cases in Channon Derek F: Cases in Bank Strategic Management and Marketing, John Wiley, 1986.

Other Supplementary Textbooks:

1. Goman C.K.: Creative Thinking in Business, Crisp Publications, 1989.
2. Jain, Subhash, C.: Marketing Planning and Strategy, Cincinnati: South- Western Publishing Co., 1981.
3. March, John: Managing Financial Services Marketing, London, Pitman Publishing, 1993 (CIB Recommended textbook for Associateship Studies).
4. Cohen, Gerald J: Effective Management in Financial Services, 3rd ed., London: Graham & Trotman Ltd., 1990.

Articles/Journals/Management Videos:

1. Various articles in The Tanzania Bankers Journal.
2. Uganda Banker.
3. Banking World.
4. The Economist; Financial Times and other local and international business, financial and banking magazines/ journals.