dapo

STRATEGY EXECUTION WITH BALANCED

SCORECARD

GROUP PROJECT

ON

ACCESS BANK PLC

BY

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Table of Contents
1.0

Executive Summary

2.0

Introduction
2.1

Company Profile

2.2

About Access Bank

2.3

Trends

2.4

Operational Environment

3.0

External Analysis

4.0

Recommendations and Conclusion

5.0

References

List of Figures

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1.0

EXECUTIVE SUMMARY
Access Bank Plc is the third largest bank in Nigeria by market share, out of a total of 21
commercial banks. The bank was established in February 1989, but commenced
business in 1990. The bank is a major player in the oil, gas, energy, fast moving
consumer goods and multinationals sectors, in financial and educational institutions and
in real estates. With its corporate head office in Lagos, the bank has nine offshore
subsidiaries including the United Kingdom, DR Congo, Gambia, Ghana, Rwanda, Sierra
Leone, Zambia and Burundi.
Access bank, over the years, has grown from a position of 65 out of 89 banks in the
country to the 3rd largest bank in Nigeria. The take-over of the bank by a new
management in 2002 was highly instrumental to the achievement of this feat. The
management executed a number of strategies including both organic and inorganic
growth strategies, manpower development, active employee participation and a reward
system that only rewarded high performing individuals or teams. In addition a culture of
excellence was inculcated in the minds of the employee, through ensuring that
employees buy-in to the mission, vision and strategic objectives of the bank.
In the execution of its growth strategy, the bank adopted a of low centralisation with an
element of organic structure, where the corporate head office is responsible for policy
formulation and management of strategic decision and the branches are expected to
implement the decisions from the corporate head office. Branches are allowed the latitude
to take decisions on their daily operations, as long as it is within the comfort of the
established policies or operating procedures in the bank. Also, branches are empowered
to approve credits within their limits as captured in the banks credit policy guide. Credit
approvals outside the branchs limit are sent to the applicable officers for approval in line
with the banks credit policy guide.

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2.0 INTRODUCTION
COMPANY PROFILE
Access Bank is a full service corporate-commercial bank group operating through a
network of over 350 branches located in all major commercial centers / cities across
Nigeria and service outlets in the UK, and eight other African countries (Gambia, Ghana,
Burundi, Sierra Leone, Zambia, DR Congo, Cote dIvoire, Rwanda).

VISION
Access Banks vision (see appendix) is to be the worlds most respected African Bank.
Using its growing network, it aims to facilitate inter and intra African trade by working with
businesses and organizations to grow them and empowering the vertical and horizontal
value-chain stakeholders (the suppliers and distributors).
Through the maintenance of a quality balance sheet, it supports infrastructural development
and fast becoming an active change agent in Africa across the continent and is the leading

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bank in Africas renaissance.

MISSION
Access Banks mission (see appendix) is Setting standards for sustainable business
practices that unleash the talents of our employees, deliver superior value to our
customers and provide innovative solutions for the markets and communities we
serve. Its business strategy is built on being the bank of choice for businesses across
the African continent. The bank values its reputation as a financial institution, conducting
its businesses within strict regulatory guidelines in a way that protects its reputation,
coupled with a strong emphasis on delivering exceptional customer service.
Essentially, the bank has the following strategic roadmap for the next five years, which
sets a new agenda, and one that will sustain the growth trend of the bank.
SHARED (CORE) VALUES
Access Bank provides employment directly or indirectly to 8,250 employees who fondly refer to
themselves as 'Access Warriors'. The employees (most important resource) are guided by the
groups core values of Excellence, Innovation, Empowered employee, Professionalism, Passion
for customers and Leadership. The Bank's 'best-place-to-work initiative' has created a pleasant
work environment where young professionals have grown and transformed into accomplished and
well-motivated professionals.
Access Bank has a consistent brand promise for its customers which is built around what is
largely referred to as the 3S within the bank which stands for (Speed, Service and Security). The
brand promise is defined as follows:

Speed:

Driving new innovations in the banking sector at record speed

Service: Providing a world class and unparalled customer experience

Security: Generating safe, consistent and sustainable returns for investors
Strategic Objectives:
Strong growth by adopting an aggressive approach to market, tagged Access United, which
involves huge employee participation as all categories of staff are involved. The focal point of the
initiative is on driving deposit growth, improving cross selling and value chain banking through
enhanced synergies across the Group. In line with the Access United campaign, the Bank intends
to attain the following milestones by 2017:

Be a truly multi-channel bank

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Rank 1st, 2nd or 3rd in each market we serve

Be the preferred African bank in Africas most attractive markets

Have a global operating model

Core capabilities to achieve market leadership in the Nigerian and African market
- Introduction of innovative cutting edge technology in the delivery of products and

services.

- Attraction, development and retention of high performing (sales) staff.

- Customer Service Excellence (>90%) and continuous employee engagement (>90%).

The Nigerian banking sector consists of three main segments (retail, small and mediumscale enterprises (SMEs) and corporate/commercial customers) which are evenly spread
across the country, though the corporate/commercial customers are found majorly in major
cities and towns (see appendix 16). The major competitors of Access Bank in the Nigerian
market in decreasing order of importance are Guaranty Trust Bank (GTB) Plc, Zenith Bank
Plc, First Bank of Nigeria (FBN) Limited, UBA Bank Plc and Diamond Bank Plc. GTB is the
market leader judging by its financial indices and customer service excellence reputation.
While FBN and Diamond compete with Access Bank majorly in the retail and SME
segments, Zenith, GTB and UBA compete with Access Bank in the corporate segment.
The major suppliers (among other bank contractors) are institutional and non-institutional
fund providers and providers of banking software, ERP and CRM systems (like Oracle,
Infosys technologies, Parkway, Nucleus, Harland, etc.) - these are mainly foreign
companies, are highly fragmented and operate via local agents/partners.

Deploy best-in-class technology in Africa

3.0 EXTERNAL ANALYSIS

Market Insights Key Trends

Banks contending with a lower yield environment and pressure on fee income
Attention returning to the customer as banks look to grow earnings
Customers are redefining the agenda for the first time in five years
Excellent customer service has replaced financial stability as the primary reason for
maintaining banking relationships in the retail and corporate segments (see appendix xx)

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An increase in the number of retail banking customers that are either planning to or have

recently switched banks

Prevalence of customers with multi-bank relationships (see appendix xx)
In the corporate segment, knowledge of their business is extremely important and a key
driver of satisfaction (KPMG, 2014)

MARGIN

Value chain

PRIMARY ACTIVITIES
PRIMARY ACTIVITIES
EXTERNAL
FACTORS

CAPITAL
STRUCTURE
REGULATORY
AGENCIES
FEDERAL
RESERVE
CLEARING
PARTNER
ALLIANCE
PARTNER

OPERATIONS

DEPOSITS

SERVICES
LOAN

ADMINISTRATION
TREASURY

OPERATION
ITEM

PROCESSING
PAYMENT

PROCESSING
REGULATORY

REPORTING

Porters 5 Force Analysis

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DELIVERY
CHANNELS

MARKETING&
SALES

BRANCH

NETWORK

ATM NETWORK
INTERNET

CALLING

OFFICER
TELEPHONE
BANKING
MOBILE

BANKING
BANK BY MAIL
CALL CENTER

BRANDING
DEPOSIT
GATHERING
CROSS SALES
FEES REVENUE
GENERATION
PUBLIC
RELATION
COMMUNITY
RELATION
COMPETITIVE
AFFAIRS
NEW ACCOUNT
ACQUISITION

REVENUE
STREAMS

BANKING
PRODUCT
INSURANCE
PRODUCT
INVESTMENT
PRODUCT
BUSINESS
SERVICE
TREASURY
SERVICE
WEALTH MANG.
SERVICE

Even though, the industry environment is relatively dynamic, PESTEL and Porters 5-forces
analyses that follow can adequately describe it and indicate how it has reached its current form as
well as what kind of trends are evolving for the future. Our teams analysis of the Nigerian banking
industry attractiveness using the well-known Michael Porters five-force model (shown below) and
PESTEL analysis showed that the industry is relatively unattractive.

1. Buyer Power The power of the buyers in this industry is very high. This is because the
buyers (bank customers) are well-informed and are aware of the fact that there are at least 24
banks (ICR, 2009) that are competing for their patronage. Customers (buyers) are in three
segments retail, small and medium scale enterprises (SMEs) and corporate customers.
There are general key success factors (KSFs) across all segments like customer service
excellence, brand reputation, banks financial stability and customer-centric staff. However, for
the corporate segment, distinguishing KSFs include sound knowledge of their business and
business cycle as well as easy access to foreign currency-denominated credit lines.
Differentiating KSFs for the retail segment include adequate branch network and alternative
banking channels. For the SME segment, easy access to soft loans (without the need for
much collateral) and fast turnaround time for credit processing are unique value
differentiators. Buyers are highly concentrated (especially in major cities and capitals) and are
individual in orientation (decision-making). Buyers are also price-sensitive and have low
switching cost; hence, they have high bargaining leverage.

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2. Supplier Power The suppliers include providers of banking software, CRM and ERP systems
as well as key sources of suppliers cost, which include but are not limited to cost of money or
the saving rate offered to depositors (individuals, the inter-banking lending system and Central
bank of Nigeria - CBN) and employees (c/o wages through unions). There are many suppliers
of banking software, CRM and ERP systems in the market and they are highly fragmented.
The threat of forward integration by these suppliers is also low. Medium to long-term contracts
are usually signed with them in order to lock them in. There are two major sources of funds in
the Nigerian banking industry, institutional (insurance and re-insurance companies,
government agencies and ministries, pension fund administrators, mutual fund managers,
commercial banks, CBN, SMEs and corporate bank customers) and non-institutional fund
providers (retail customers). The cost of fund (between 12 and 15% p.a) from institutional
fund providers compared to their non-institutional (3% for savings account, 0% for current
accounts and 6-12% for fixed deposit funds) counterparts whose funds make up about 40% of
the circulating funds in the industry. Inter-banking system is quite flexible and is moderated by
the CBN based on the state on the nations economy, the cost of funds from this source
averages between 10 and 10.5% currently. Overall, supplier power is relatively medium to
high.

3. Threat of substitution: The threat of substitution is very high. This is because buyers
switching cost is low as there are many banks offering similar products and services in the
market. Other substitutes to banking services include investing in real estate, mutual funds, Tbills and government securities, as well as borrowing from private lenders and non-bank
financial companies (NBFCs) like Credit and Thrift Investment societies. The returns on
investing funds with these substitutes are higher and riskier (except for T-bills and
government securities) compared to banking products, though their lending rates are much
higher with stiffer penalties in case of loan default. However, with customer service
excellence, ease of banking, easy access to credits, ease of international trade and good
branch network, the major competitive weapons in this industry, etc., a player can distinguish
himself in such a way to command a high patronage through value-added services, thereby
decreasing the threat of substitution

4. Threat of new entry: The threat of new entry is medium especially for overseas banks due to
the fact that local banks are well capitalized and are able to customize their offerings to meet
local demands in a way that will be difficult for overseas banks to replicate. Apart from the
required N25 Billion capital base by CBN, low product differentiation and other regulatory
requirements, cultural norms and sentiments endear locals to the local banks compared to
their foreign counterparts which have found it very difficult to make it to the list of the top 10

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banks in the Nigeria over the years. Though the capital requirement to start is small, the value
of important networks in this industry cannot be over-emphasized as it makes a company
grow ahead of the learning curve. Economies of scale is only achieved with an increase in the
scope of the business and customers patronage.

5. Strength of competitive rivalry: This is very high because we have key strong players with
almost equal capabilities and low product differentiation. The top four banks (GTB, First Bank,
Zenith and Access Bank) control about 35% of the market share, while exhibiting a cut-throat
rivalry due to the maturing state of the nearly perfect competitive market (Asogwa, 2002). The
exit barriers are also very high due to the huge investment in assets, except in the case of
bank liquidation which is quite rare. Zero sum competition, which exists in the market, also
makes the industry rivalry very strong. Key competitive weapons include customer service
excellence, product and service innovation, customer relations (especially for institutional
fund providers) and other KSFs discussed under Buyer Power.

Macro Trends PESTEL

POLITICAL
1. High Rate of Corruption: Corruption is endemic, with Nigeria scoring just 2.5 in Transparency
Internationals Corruption Perceptions Index, which places it 130th out of 180 countries worldwide.
This may discourage potential foreign investors in the industry as it may increase their level of
apprehension.
2. Political Stability: The political environment has been stable since 1999 but there is political
uncertainty as an election year (2015) approaches. This has the potential impact of slowing down
the attraction of foreign direct investments into the market due to the uncertainty in the likelihood
shift in power and political alignment since the CBN governor is a political appointee of the sitting
President.
3. Ongoing political problems that keep oil production below its full potential. Except this is
assuaged, it may increase buyer power tremendously especially for the non-institutional investors
since oil production is the mainstay of the economy.

Tightening of monetary policy

Repeal of universal banking model
Crime and Insecurity

ECONOMIC

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1. Industrial Growth: Nigerias perceived dependence on oil makes it more vulnerable. A severe
blow below the belt to the oil industry (e.g. a very sharp drop in the international price of crude oil)
may have ripple effects on other industries in the economy. However, huge infrastructural
development and reforms in power, Gas, Oil and Agriculture industry show positive signs for the
future growth of the industry.
2. Banking reforms: Ongoing banking sector reforms have the potential to create a consolidated
and much more efficient financial infrastructure (Premium Times, 2013). This has caused a shift in
the main key success factor in the industry from being financial stability and reputation to
customer service excellence since we have fewer but stronger banks compared to previous years.
It has also increased the industrys competitive rivalry, further decreased likelihood of financial
strength being an advantage on the part of foreign-owned banks and boosted the focus on the
customer satisfaction.
3. Recent GDP rebasing of the country to $510billion, with a new base year of 2010, as opposed
to 1990, when the last rebasing exercise was done. This propelled the Nigerian economy to
number one spot in Africa, and 26th in the world making the country a destination haven for
investments (see Appendix x). This also reduces the unemployment rate in the country

4. Increasing FDI: Foreign direct investment has brought overseas players into Nigeria, which
should help with the spread of international business norms. This has continuously increased the
competitive rivalry in the industry, a situation best described as the survival of the fittest. A
relatively stable exchange rate has however reduced the worries of incurring losses.

SOCIO-CULTURAL
1. Increase in Banked population: A large and growing population means an abundant supply of
cheap, albeit unskilled, labor and a growing consumer market. This makes the industry very
attractive to potential (foreign) investors, thereby increasing the industry competitive rivalry and
threat of new entries into the market.
2. Shifting customer demography: Young population ratio is on the higher side. 50% of
population is in this category. This partly explains the acceptance of the improved
technology by the customers. Younger customers (under-30) are particularly more
sophisticated and less loyal, they are twice more likely to change banks compared to customers
above 60 years. This has increased the level of buyer power since they are more informed, more
demanding, highly educated and are multi-banked.
TECHNOLOGICAL
1. Popularity of Mobile banking: Increasing popularity of mobile banking technologies and
modern banking tools (appendices 2, 3, 4 and 6) in order to appeal strongly and get a good
patronage from the growing population of young urban professionals who form a large chunk of
banks customer base. Mobile money platforms also open up means to cheaply and effectively
reach the unbanked and to tap into enormous payment/transaction revenue opportunities

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2. Adaptation to improved technology: Use of modern Automated Teller Machines (ATMs) that
accept cash deposits. This is a recent product innovation in terms of alternative banking channels
that is fast endearing customers to banks that provide such services (especially young urban
professionals) who do not need to queue up in banks in order to deposit, receive or transfer cash.
ENVIRONMENTAL
1. Taxation policies: Taxation is relatively low; with VAT just 5%, corporate tax 30% and
individual income tax rising progressively to a top rate of 25%. This makes the industry very
attractive to potential (foreign) investors, thereby increasing the industry competitive rivalry and
threat of new entries into the market.
2. Regulatory and surveillance framework: Increased regulatory activities by the Central Bank
of Nigeria (CBN). This has the effect of boosting potential foreign investors confidence in the
industry, with the resultant effect of increasing the power of buyers and suppliers (fund providers),
as well as threat of new entries and increased industry rivalry.
LEGAL
1. Uncertainty over the outcome of the suspension of the CBN governor by the countrys
President, the former having gone to court to seek redress. This has a tendency of sending the
wrong signals to local institutional fund providers (suppliers) and potential foreign investors as he
is widely perceived to be the stabilizing factor of the industry.
2. Unresolved court cases involving sacked bank chiefs indicted for corruption and poor corporate
governance practices. This may also increase the level of apprehension of local institutional fund
providers (suppliers) and potential foreign investors, and thereby slow down the attraction of
foreign direct investments into the industry.

Key Success Factors (KSFs)

The key success factors for the Nigerian banking industry differ among the customer segment
types (retail, commercial/corporate and SMEs) as explained under Buyer Power in PESTEL
analysis above also see appendix xx.
How PESTEL analysis relates to Porters 5-forces model, future projections and strategic
recommendations based on the identified KSFs
Buyer Power
Increased customer convenience in conducting transactions due to more sophisticated
technologies
Customers have become more demanding better quality (smoother and simplified
processes) at lower costs and improved security of online services
Young professionals (with distinct priorities and preferences) of today are fast becoming a
significant revenue driver for the retail segment in the future due to shifting demographics
in their favor
Shift of focus from price as competitive weapon to customer service excellence (appendix
10)

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Banks e-payment capabilities and product suitability are now of critical importance to
corporate/commercial segment of the market.

Supplier Power
CBNs cashless policy continues to shape the payments landscape.
Relatively stable monetary policy of the CBN may continue to reduce the power of fund
providers with time.
Competitive Rivalry
Innovation with online and e-payment solutions fast becoming the differentiating factor
among competing banks.
Value co-creation with bank customers for product development process is fast becoming
a popular trend among the key players in the market, especially in the retail and SME
segments. This will shape the future of banking landscape and competitive rivalry in the
industry.
Threat of new entrants
Increased government regulations has boosted potential investors interest in the industry
with the possibility of increasing the threat of new entrants.
There is the increased tendency of foreign-owned banks to customize their product/service
offerings to appeal to the cultural and religious sentiments of the citizens in order to satisfy
local customer demands.
Threat of substitutes
Improved confidence in the banking industry, coupled with a relatively stable monetary
policy, may continue to reduce the likely threat of substitutes identified previously under
PESTEL analysis.
With the falling prices of real estate, inhibitory interest rates and increasing incidences of
default with non-bank financial institutions, the banking industry will continue to gain more
patronage from the investing public (businesses) and depositors. This has the potential
impact of reducing the threat of substitutes.

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Internal Analysis

Appraising Resources and Capabilities (R&C): The Case of Access Bank Plc
Resources

Definition

Relative
Strength /
Importance

R1. Customer
experience

Staff members with

ability to create a
positive
consumer
experience at all
point of sale and
provide
post-sale
service

7/10

C1. Marketing
and Sales

Management
process
through which goods and
services
move
from
concept to the customer

7/9

R2. Branch
Spread and
ambience

Geographical spread
Ambience,
Accessibility,
Availability
of
parking space

7/10

C2. Product
Development

Capability for improving an

existing
product
or
developing new kinds of
products

5/7

R3. Secure
and modern IT
systems

Availability
of
alternative banking
channels and less
incidence of online
fraud

9/10

C3. Financial
Management

Efficient
and
effective
management
of
money
(funds) in such a manner as
to accomplish the objectives
of the organization

8/9

R4. Innovative
and Industrybest Staff

Top of the range and

well-trained staff in
line with consumer
changing needs and
modern
banking
trends

5/7

C4. Corporate
Social
Responsibility

Corporate
initiatives
to
assess
and
take
responsibility
for
the
company's effects on the
environment and impact on
social welfare

5/6

R5. Financial
Resources

A
stable
and
constantly improving
mix of assets (55%)
and liability (45%)

6/8

C5. Customer
Relations

Model
for
managing
companys interactions with
current
and
future
customers. It involves using
technology to organize,
automate, and synchronize
sales, marketing, customer
service,
and
technical
support

5/6

R6. Brand
Reputation
(Brand Equity)

The
commercial
value of the bank
that derives from
consumer
perception of the
brand name

5/7

C6. Credit Risk

Management
Framework

Essential
supporting
structure
for
the
identification, measurement,
monitoring and control of
risk
arising
from
the
possibility of default in loan
repayments

6/7

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Capabilities

Definition

Relative
Strength /
Importance

R7. Network
Infrastructure

Architecture of the
banks ICT systems,
in
terms
of
equipment
and
connections

8/9

C7. Operational
efficiency

Capability
to
deliver
products or services to its
customers in the most costeffective manner possible
while still ensuring the high
quality of its products,
service and support.

6/8

C8. Employee
training and
engagement

Capability to train and

harness
organization
members' selves to their
work roles in such a way
that staff members can
employ
and
express
themselves
physically,
cognitively, and emotionally
during role performances

7/9

Recommendation from the R & C Analysis

Strategy Map and Balance Scorecard at Access Bank

The strategic importance of strategy map and balance scorecard in commercial banks have been
extensively discussed in literature by many authors (Dave and Dave, 2012; Al-Najjar and Kalaf,
2012; Zhang and Li, 2009), including the accompanying challenges. Strategy Map and balance
Scorecard help to evaluate the strategic performance of an organization by analyzing the causeeffect relationships between the non-financial and the financial dimensions and how to turn
strategic vision into potential performance.

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By integrating the banks vision, mission and values with the inferences from our external/industry
analysis (PESTEL and Porters 5-forces model) and internal company analysis (as described
under R&C matrix above), our group developed the Balanced Scorecard and the Strategy Map for
the bank.

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STRATEGY MAP OF ACCESS BANK PLC

REFERENCES
Access Bank (2014) About Us. Available at: https://www.accessbankplc.com/aboutus.
{Accessed: 12 October 2014}
Du Plooy, J, & Roodt, G (2010), 'WORK ENGAGEMENT, BURNOUT AND RELATED
CONSTRUCTS AS PREDICTORS OF TURNOVER INTENTIONS', SAJIP: South African Journal
Of Industrial Psychology, 36, 1, pp. 1-13, Academic Search Premier, EBSCOhost, viewed 19
October 2014
Henry, A (2012), 'EFFECTS OF MONETARY POLICY ON BANKS ASSET PORTFOLIO
BEHAVIOUR; EVIDENCE FROM NIGERIAN ECONOMY (1980 - 2009)', International Journal Of
Academic Research, 4, 5, pp. 103-117, Academic Search Premier, EBSCOhost, viewed 19
October 2014
NOSSITER, A (2014), 'Nigerians Ask Why Oil Funds Are Missing', New York Times, 10 March,
Academic Search Premier, EBSCOhost, viewed 19 October 2014
Ramoo, V, Abdullah, K, & Piaw, C (2013), 'The relationship between job satisfaction and
intention to leave current employment among registered nurses in a teaching hospital', Journal Of
Clinical Nursing, 22, 21/22, pp. 3141-3152, Academic Search Premier, EBSCOhost, viewed 19
October 2014
Uzoechi, N (2011), 'Rethinking Labour Turnover: Prospecting For Shared Leadership', Petroleum
- Gas University Of Ploiesti Bulletin, Technical Series, 63, 4, pp. 1-10, Academic Search Premier,
EBSCOhost, viewed 19 October
Wheary, J (2009), 'One Step Forward, Two Steps Back', World Policy Journal, 26, 4, pp. 80-81,
Academic Search Premier, EBSCOhost, viewed 19 October 2014.

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