To assess the importance and purpose of strategic management in GCB business

development.

In assessing the purposes of strategic management in GCB business development, 28

respondents representing 93.33% acknowledged the importance and purposes of strategic
management in GCB’s business development. 2 respondents representing 6.67%
provided no response. However those who acknowledged the importance and purposes of
strategic management in the development of GCB business advanced the following as
grounds in support of their assertion:-

Strategic management provides GCB a better and up-to-date information about the
organization's current position and to also helps it to predict where the organization can
be in the/stand in future through its SWOT analysis and informed projections. Again, it
makes managers and organizational members more alert about the opportunities and
threatening development in their corresponding field thus conscious of which type of
business programme to roll in.

It further enables the top management of GCB to unify its managerial and organizational
efforts in a direction believed to create competitive advantage for the Bank. Furthermore,
it allows management to align business policy with strategic management process by
creating a more proactive management posture readily looking out for opportunities for
the bank. Finally, strategic management enables top management to promote the
development of a constantly evolving business model and also provides the opportunities
to managers for evaluating the bank’s budget for business development purposes
according to the situation.

It must also be noted that strategic management is a plan of action and managerial
decisions which measure the future growth and long term performance of any
organization or business. As indicated in the literature review, the term strategic
management originated from the army which used strategies in wars. So the term
strategic means something that is done cleverly. Therefore GCB uses strategic
management principles in business development to build up the competitive edge against
any competition posed by other banks.

The basic purpose, therefore, of strategic management in the development of GCB

business is to foresee business value in the future, to eliminate the possible risks in the
environment, and to look for the changing markets trends. Thus strategic management
purpose is not only profit making but involves the entire sector which requires special
attention.

The survival of GCB over the years is linked to its ability to identify and use competitive
advantage to lead the market or to maintain itself at the top and also link the management
functions of both middle and top management officials with strategic management
processes in a way that brings the desired results. It is undeniable fact that strategic
management gives GCB specific thoughts to overcome current problems and to look to
the future.
Determining if Ghana Commercial Bank has a functional strategic planning
committee/team.

In determining if GCB has a functional strategic planning committee/team, 30

respondents representing 100% response rate affirmed the position and added that the
Strategic Planning Committee (SPC) of the GCB is a standing committee of the bank and
it is responsible to the bank’s Board of Directors. The respondents further stressed that,
the SPC has among its responsibilities to assist the Board of Directors in business
development and annual review of GCB’s Strategic Plan

The SPC’s scope of work among others is said to include overseeing GCB’s strategic
management processes which includes examining the core purpose (mission) and values
statements, the governing principles, the envisioned future (vision) and vivid descriptions
for currency and relevancy, reviewing and recommending revisions to the strategic goals
and objectives, conducting environmental assessments (internal and external forces),
reviewing current strategies, generating and evaluating alternatives, and revising the
documentation as required, hence maintaining the integrity of the GCB

The SPC has additional core functions of providing an environmental scan; review
current strategies, proposing revisions to the strategic direction; reviewing strategic issues
that represent challenges for the bank, generating background materials that will inform
the Board of Directors on the issues, and identifying alternatives for the Board’s
consideration.

The SPC is further charged to evaluating the effectiveness of strategies and measuring
progress towards objectives; continuously assessing progress towards objectives;
participating in operational planning and strategic programme assessments to review
GCB’s product and service portfolio, and finally, providing an annual assessment,
describing progress against the strategic direction.

It was also revealed from the response that the SPC specifically assist the Board of
Directors of the Bank in determining GCB’s core purpose (mission) and envisioned
future (vision), ensuring plans are in place and resources are provided to achieve the
mission, and overseeing progress against plans and how resources are being utilized.

The chairperson of SPC with coordination responsibility ensures the participation of

other committees; conducting a comprehensive review, with participation of the Board of
Directors, at the end of the programme year; managing and leading the Committee.

In conclusion, the SPC generally ensure that GCB’s strategic management process is in
place, it is being utilized, and it is effective and capable of being adjusted when
necessary; assuring that the strategic goals is properly related to and integrated with the
operational objectives of GCB; reviewing GCB’s strategic goals and objectives
periodically to ensure they advance the envisioned future; establishing GCB priority
objectives annually and overseeing progress made in achieving the objectives; identifying
strategic issues of importance to GCB that represent challenges to the organization; and
finally, establishing strategic direction, operational plans and budgets, and overseeing
operational and asset performance.

Find out if Ghana Commercial Bank applies strategic management theory in their
management process or functions.

To identify the effective marketing strategy of Ghana Commercial Bank.

In identifying the effective marketing strategy of GCB, 27 respondents representing 90%

response rate indicated that GCB develops and administer different marketing strategies
in promoting and sustaining it operations in the urban and the rural setting. 3 respondents
representing 10% response rate provided no answer. However the justification for the
differential approach as indicated by the 27 respondents is discussed below under the
following separate headings:-

(a) Marketing strategy for the urban areas

The urban areas of Ghana are relatively developed taking into account all parameters of
development. The level of income of the people, the literacy rate and level of education
as well as awareness of the people about rights of the customer are higher than that of the
rural. Thus different and effective bank marketing is considered necessary than that of
rural areas. One of GCB’s marketing strategies is based on customer service and the use
of modern technology in banking. It is strategically affirmed that under competitive
environment, the success of GCB’s business must be better customer service. GCB can
attract new customers and retain existing ones principally only with excellent customer
service supported by the use of modern technology in banking services.

The technology based service like the use of MasterCard, ZWICH, credit card, debit card,
Automatic Teller Machine (ATM), anywhere and internet banking, are necessary for
urban setting. This is because it provides customers with easy banking thus enables them
to perform banking transactions at their convenience.

Secondly, business hours of the bank are also considered an important factor for effective
marketing strategy in the urban setting. Banking services for long hours, say 8 hours for
five days a week and 5 hours on Saturdays is preferred by urban customers and suitable
to urban life style. In Ghana many private sector banks, have also started this practice and
they find it successful.

To attract business and wholesale customers, GCB adopts technology based product and
service which is suitable to such class of customer. For instance the use of MasterCard,
ATM, ZWICH, Credit card, traveller’s cheque, among others is necessary and they have
proved to promote the business growth of GCB. Again, GCB has considered as another
strategy for effective marketing and has changed the focus from the traditional banking to
universal banking.

The bank observed that in the urban areas the extent and variety of economic activities
demands that one institution should meet all financial needs of a customer. Thus, under
such an expectation of customers, universal banking was considered as most rewarding
and successful approach to promote the business growth.

The term ‘universal banking’ within the context of this research, generally refers to the
combination of commercial banking and investment banking, that is, issuing,
underwriting, investing and trading in securities. GCB offers a wide range of financial
services, beyond commercial banking and investment banking, such as insurance. The
idea is to create convenience for customers by conducting three banking and allied
activities under one roof and these allied activities may include credit cards, asset
management, housing finance and insurance, all of which are run concurrently with core
banking operations. The concept create a ‘supermarket’ of financial products such that
under one roof, corporate organisation can get loans and avail of other handy services,
while individuals can bank and borrow. GCB therefore uses universal banking as one of
its effective strategies to increase its customer base and retain the existing clientele.

In justifying the universal banking strategy, respondents stressed that, it creates

economies of scale which arise in multi-products the bank offers, because the costs of
offering various activities by different units are greater than the costs when they are
offered together. For GCB, economies of scale relate to cost-savings through sharing of
overheads and improving technology by jointly providing generically similar groups of
services. Since universal banking basically provides financial services, the inputs like
human resource, infrastructure is more or less same. The required changes in the inputs
can easily be made. For example, training can be given to staff for providing different
financial services to customers and more importantly, it is useful to increase the fee based
income of the bank. All banks are striving hard to increase their fee based income to
improve their bottom line and universal banking is one such key approach to doing so.

Furthermore, the wide range of financial products and services that GCB offers holds a
greater appeal for the customer than specialised banks due to the comprehensive service
provided by GCB under the universal banking. And it is one of the major factors which
has helped GCB face competition successfully and increase their market share. Finally,
modern banking now requires that banks depend heavily upon retail banking approach to
be able to attract retail customers. It is an open secret that almost all banks are taking
retail customers seriously and focusing their marketing strategy towards them. However,
the universal banking approach has shot GCB into the lead by being the first to focus on
retail customers.

(b) Effective marketing strategy for rural customers

The respondents hold the view that rural area strategies are different from that which
pertains in the urban setting, because the rural area is dominated by relatively
unorganized sector. It therefore means that the nature of competition is also different, and
banks have to face competition with the unorganized sector. It was also established that
rural banking is highly regularised activity by the Government. Lending as well as
interest rate is regularised, which therefore requires that under such environment different
marketing strategy is required.

The key GCB marketing strategy for the rural areas is their product development,
promotion and communication. The bank balances product development, promotion and
communication with socio-economic factors prevailing in the rural areas. GCB innovate
product that can attract the depositors. GCB introduces various loan schemes that are
suitable for the rural customers such that they get funds at right time and also find it
convenient to repay. For example, the traditional saving bank account is given a fixed
deposit concept such that, once a particular limit of balance is reached the funds from the
saving account is automatically converted into fixed deposit attracting higher interest rate
and same way giving more liquidity status to fixed deposit account.

Again, GCB develops some scheme which attracts rural customers to bank with it. For
example, there are loans and advances products which are suitable to farmers, small
traders; small scale agro based rural industries. GCB constantly try to see how to make
value addition to these existing schemes.

In addition, GCB has in some cases tied up with Non Government Organisations and
various Self Help Groups for different types of loans, micro financing projects among
others. This has helped GCB to build good image and reputation in the rural areas over
and above their normal business.

Another potential area which GCB has explored strategically is the retail banking. With
the steady increase in the income of the rural people there is ample scope for retail loan
products like housing loans and loans for consumer durables. GCB’s customer services in
the rural areas are mostly personalised banking. This is because the high level of
illiteracy makes it necessary for the rural people to prefer to undertake banking
transaction themselves. They hesitate to depend upon technology based service.

GCB has also for the purposes of effectively marketing its services have trained bank
staff with the right soft skill like concern for customers’ problem, positive attitude, good
communication and negotiation skills. At every level of dealing with the customer the
bank staff educates them for banking activities and processes. And one key to attracting
the customers in the rural areas has been GCB’s ability to provide the borrower the
required finance of right amount and at right time.

In conclusion, it is clear from the foregone discussion that GCB has different strategies
for different market environment. In the urban areas customer service is of paramount
importance as the level of literacy and awareness of the people is more. Again,
technology based marketing has a higher degree of success due to typical urban life style
of the people. The adoption of universal banking providing all financial services under
one roof will have more success in urban areas. In the rural areas however, marketing
personalized banking is the key to its success and growth. Again, GCB offers innovative
tailor made deposits and advances products to suit individual customers and the delivery
of advances of right amount and at right time has effectively promoted its operation in the
rural areas.

(v) To examine the role strategic management plays in the activities of the Ghana
Commercial Bank

In examining the role strategic management in the activities of GCB, 29 respondents

representing 96.67% response rate indicated that the roles are enormous whilst 1
respondent representing 3.33% gave no answer. The respondents who acknowledged the
enormous role of strategic management in the activities of GCB identified the following
as some of them:-

Strategic management enables GCB to formulate strategies to promote it activities. This

enhances the GCB’s ability to prevent problem, even if it did occur strategic
management enable the bank to address it effectively. It also makes Managers to
encourage subordinates and direct their attention to planning and this makes their
monitoring and forecasting responsibilities more easily given that they are aware of the
needs of strategic planning.

Another role in the activities of the Bank is that, it helps the bank to draw grouped-based
strategic decisions from the best available alternatives. The strategic management process
results in better decisions because group interactions generates a greater variety of
strategies and because forecasts are based on the specialised perspectives of group
members it improves the screening of options.

Furthermore, the strategic management principles encourage senior management to

involve employees in strategy formulation and this improves their understanding of the
productivity-reward relationship in every strategic plan and, thus, heightens their
motivation. Strategic management also enables GCB to reduce gaps and overlaps in
activities among individuals and groups as participation in strategy formulation clarifies
differences in roles.

Additionally, strategic management offers the platform in the activities of GCB to reduce
resistance to change. This is because the involvement of perceived resistant elements in
strategy formulation expose them to greater awareness of the parameters that limit the
available options thus create room for them to accept those decisions arrived at.

Finally, strategic management offers GCB the value of planning ahead. There is an old
saying that if one fails to plan, one is planning to fail. By acting on this, strategic
management actually gives the GCB direction, a sense of identity and unity towards the
corporate goal of the bank. Every business has a vision and a mission. Strategic
management takes into consideration both of these. Strategic management creates
workable path that helps in achieving the GCB’s corporate goals in an effective and
efficient manner. An improved strategic management processes also has facilitated the
development of the GCB’s complex management structure which has accommodated the
growth of the bank. The strategic management principles and processes have helped top
management of the bank to articulate, communicate and monitor the implementation of
strategy using a system interlinked with the long-term vision of the bank.