Strategic analysis of IBA

19th November, 2014

 Term Paper on “Strategic analysis of IBA”

Prepared for

Prof. Dr. A.K.M. Saiful Majid

Course Instructor
Course Title: Business Strategy (W650)

Prepared by

AvijitMallik
ID: ZR 47, Batch: 49D
MithilaSanhitaMajumder
ID: RK 49, Batch: 49D
Suman Saha
ID ZR 08 ,Batch 47E

Institute of Business Administration

University of Dhaka

November 19, 2014

November 19, 2014

Dr. A.K.M. Saiful Majid

Professor
Institute of Business Administration
University of Dhaka
Dhaka – 1000

Dear Sir,

Subject: Submission of proposal of term paper

This is our privilege to submit the term paper entitled “Strategic analysis of IBA” to you. This is
prepared as per the requirement of the course Business Strategy (w650) of Masters of Business
Administration (MBA) program.

In this paper, it is briefly discussed that how the research for the term paper will be conducted.

We have given all of our sincere effort in the preparation of this proposal and will appreciate if
you suggest for any kind of rectification.

Sincerely yours,

Avijit Mallik

Mithila Sanhita Majumder

Suman Saha
Table of Contents
Executive Summary.....................................................................................................................................5
1. Introduction.............................................................................................................................................6
1.1 Objectives..........................................................................................................................................6
1.2 Scope.................................................................................................................................................6
1.3 Limitations.........................................................................................................................................6
2. Methodology...........................................................................................................................................7
3. Strategic Analysis of IBA...........................................................................................................................8
3.1. PESTEL Analysis.................................................................................................................................8
3.1.1. Political Factors.........................................................................................................................8
3.1.2 Economic Situation.....................................................................................................................9
3.1.3 Socio-Cultural Factors................................................................................................................9
3.1.4 Technological Factors...............................................................................................................10
3.1.5 Environmental Factors..............................................................................................................10
3.1.6 Legal Factors............................................................................................................................11
3.2. SWOT Analysis................................................................................................................................12
4. Process of Executing Strategy of IBA.....................................................................................................13
4.1 Vision...............................................................................................................................................13
4.2 Mission............................................................................................................................................13
4.3 Values..............................................................................................................................................13
4.4 Balanced Scorecard..........................................................................................................................14
5 Strategic Group Mapping......................................................................................................................14
6 Drivers of Industry Change in Tertiary Education Industry of Bangladesh...............................................15
7 Dominant Traits of Tertiary Education Industry in Bangladesh................................................................17
8 Conclusion..............................................................................................................................................18
Executive Summary

The Institute of Business Administration (IBA), University of Dhaka, is the leading business
school in Bangladesh. The objective of this study was to analyze the external environment and
strategy of IBA. The study was focused on mission & vision formation, balanced scorecard,
situational analysis, competitor analysis & strategic group mapping of IBA, Dhaka University.
The methodology was a combination of primary research & secondary research. Relevant
persons were interviewed & related documents were gathered from credible sources to conduct
the study.
IBA has positioned itself as a pinnacle of business study in Bangladesh. Currently it does not
have any vision, mission or values. So in this report we tried to formulate vision, mission and
values of IBA.We also tried to make a balance scorecard for IBA by bringing balance between
learning & growth perspective, business process perspective, customer perspective & financial
perspective. As an institute of public university IBA has to maintain certain Govt. rules. Political
instability sometimes hampers regular process but IBA has maintained a strict timeline to
complete sessions in time. Bangladesh is an emerging economy & increased economic activity is
creating more demand for degrees of IBA. IBA is incorporating technological changes
gradually.Major Legal issues regarding business in Bangladesh are regularly updated in the
course curriculum of IBA. Increased urbanization & literacy is creating more demand for
business degrees from IBA. IBA needs to include more & more environment related issue in its
course curriculum. IBA has more green space for activities which makes it an eco-friendly
institute.Its vision should focus to be a leading university in Southeast Asia and remain as a top
center of excellence in higher education and research. As per our study, its mission is to provide
excellence in business education with a focus on career orientation as the country’s top business
school. Values of IBA should be integrity, excellence, quality business education, new initiatives
and talent management. Its major strength is brand value, unique curriculum, rigorous admission
process, effective teaching method & faculties with versatile knowledge base, strong intent for
research & development, strong alumni association and timely completion of every term. IBA is
unparalleled in terms of delivering quality business education and seemingly far ahead from
other competitors.Drivers of industry change in tertiary education industry of Bangladesh are:
democratization of knowledge and access, Government regulations, digital technologies, global
mobility, integration with industry, variety of degrees anddemand for tertiary education. In the
last part we have several recommendations for further progress of IBA.

In this study, we have tried to apply the learning of our ‘Business Strategy’ course. It was very
much helpful to apply our theoretical knowledge in practical aspects.
1. Introduction
The Institute of Business Administration (IBA), University of Dhaka, is the pioneer in rendering
business education in Bangladesh. It is also the leading business school in the country.IBA was
founded in 1966 in collaboration with Indiana University, Bloomington, USA, under a Ford
Foundation Financial Assistance Program with the objective of providing professional training to
create future business leaders. The founder-director of IBA is Professor M. Shafiullah.

IBA began its journey by launching its flagship MBA program. In the 1970s, the MPhil and PhD
programs were introduced. In response to the growing demand for business education at the
undergraduate level, the BBA program was started in 1993. In 2007, the Executive MBA
program was launched to cater to the growing demand for quality education among mid-career
executives.

In the report there will be an extensive analysis of the strategy and external environment of IBA.

1.1 Objectives
 To evaluate the external environment of IBA.
 To assess the vision, mission, values, balanced scorecard and objectives of IBA.
 To evaluate drivers of industry change, dominant industry traits & strategic group for
IBA

1.2 Scope
The report will only cover the external environment of IBA. Most importantly the research will
be conducted with a focus ontertiary education sector of Bangladesh.

1.3 Limitations
Following were the limitations of the study

 Inadequate research and statistics are available related to this particular education sector.
 Lack of access to expert

Though these limitations were present while conducting study but the best effort was given to
make it a meaningful research.
2. Methodology

To explore the objectives of this studymixed approach of research was followed. In-depth
interviewwas the crucial qualitative research instruments.

This study was conducted following the descriptive method of research. This method of research
was employed to gather information about the existing condition of a particular issue. Describing
a phenomenon rather than on judging or interpreting it was emphasized. Moreover, this method
allowed a flexible approach, thus, when important new issues and questions arose during the
duration of the study, further investigation was conducted.

In-depth interview was employed to grab primary source qualitative data from the stakeholders

The entire information for the study were collected from two sources:

 Primary source
 Secondary source

So there were two types of data: Primary data and secondary data.

At first the data were collected and then they were analyzed. Then everything was discussed in
terms on economics. And finally there was a conclusion. So the steps in the study were

 Data collection
 Data Analysis
 Discussion on the basis of tools of economics
 Drawing conclusion

3.Strategic Analysis of IBA

3.1.PESTEL Analysis
PESTEL analysis is a tool for external analysis of an organization. It involves collection &
portrayal of information about external factors which might have impact on the business of the
organization. PESTEL analysis is useful to identify current external factors affecting the
organization and the external factors that might change in the future. It also helps to modify the
business strategy to cope with changes in the external factors. Macro-environmental factors
included in PESTEL analysis are as depicted in the following figure:

Figure: PESTEL Analysis

The findings of PESTEL analysis is used to identify opportunities and threats of the organization
in SWOT analysis. PESTEL analysis helps to break unconscious assumptions and helps to adapt
the realities of real business environment.

3.1.1. Political Factors

In 2013 &Q1 of 2014, there were severe political unrest in Bangladesh regarding general
election and some other factors. There were numerous strikes in both local& national level. In
case of political unrest or strikes, classes can’t be held at IBA. It hampers the academic process
of IBA. IBA is an institute of a public university. It has to rely on the Govt. funds. Govt. funding
is not so high for IBA compared to the income of the comparable private universities or foreign
institutes.

3.1.2Economic Situation
In recent years Bangladesh is having a stable around 6% growth in its gross national product.
Govt. expenditure on education as a percentage of total national budgets has been hovering
around 15% for last 10-12 years [www.worldbank.org]. However private expenditure on
education in recent days has increased. People are willing to expend more for quality education.
Inflation rate in Bangladesh is around 7%. Due to this inflation IBA has to increase its different
program fees every year by a certain percentage. Disposable income in Bangladesh is growing at
an impressive rate (from BDT 19619 in 12004 to BDT 31080 in 2013)
[www.tradingeconomics.com]. It would translate into increased expenditure in education sector.
With booming of economy, many multinationals of different sectors like FMCG (e.g. Unilever),
banking (e.g. HSBC, CiTi, SCB), telecom (e.g. Telenor, Orascom, Axiata) and domestic firms
like readymade garments (e.g. Viyellatex), FMCG (e.g. PRAN), banks & NBFIs (e.g. EBL,
MTBL, IDLC), NGOs (e.g. BRAC) are expanding their business which requires more & more
top quality business graduates from top business schools like IBA.

3.1.3 Socio-Cultural Factors

In Bangladesh rural population is gradually shifting in urban area. Currently 35% people live in
urban area with a yearly increment rate of 3% [data.worldbank.org]. Urban people are more
interested in quality business education than rural people. Also 23% of the total population is at
the age range of 20-39 [www.indexmundi.com]. This age group is more likely to pursue a degree
in IBA.
In 1991 Bangladesh had a literacy rate of 38% which has jumped to 78.5% in 2010. More and
more people are getting into higher level education which also increases the demand of degrees
from IBA.

3.1.4 Technological Factors

Bangladesh is going through a change towards digital era. The main focus of the Government is
to enhance efficiency of the daily process by introducing digital equipment & services. People
are getting more and more used to internet. They are using internet regularly in the daily life. Up
to date IT technology has been introduced in different manufacturing& service sectors.Major
corporate organizations are using enterprise resource planning (ERP), supply chain management
system (SCM), management information system (MIS). In this scenario, business graduates are
also required to be tech savvy. Business schools like IBA need to incorporate these technology
related courses in the syllabus. High end computer systems are required to be installed to ensure
students are getting access to digital educational resources.

Way of delivering education system is also changing. Digital audio visual system is replacing
legacy chalk & board system. Access to information is easier now through internet. Both
faculties & students can access required academic resources through internet. The admission
system of IBA has been renovated by introducing form fill-up using internet, payment using
mobile phone& script checking using OMR machines. So, education system is incorporating
technology in almost all the aspects.

3.1.5 Environmental Factors

Environmental issues are gaining more and more focus day by day & business schools like IBA
also need to pay attention on this. Almost all the industries are required to follow certain
guidelines regarding environmental policies. So business graduates are required to have a
thorough knowledge on environmental issues. Business schools need to incorporate more
environmental issues in their course outlines. Public business schools like IBA have adequate
green space available for activities whereas private business schools lack in this area. Most of the
regular activities in IBA are paper based which use significant amount of toner and paper to
produce printed information. IBA needs to shift towards a paperless culture which will help to
reduce carbon emission. Certain guidelines regarding usage of light, fan, AC, computers can be
devised which might reduce the power consumption in IBA as well as carbon emission.

3.1.6 Legal Factors

The University Grants Commission (UGC) of Bangladesh was established under the President's
Order (P.O.) No. 10 of 1973 which was deemed to have come into force with effect from 16
December 1972.The UGC is the apex and statutory body of the universities of Bangladesh
including the private universities.UGC receives funds from the Government and allocate and
disburse, out of such funds, grants to the public universities for their maintenance and
development. Since IBA is an institute of Dhaka University, its funds/budgets is derived from the
grants of UGC.

An important legal factor for the business schools like IBA is the prevailing laws related to
business. Major laws related to business in Bangladesh falls under following category [Board of
Investment Bangladesh]:
 Taxation, Customs & Revenue Laws
 Investment Related Laws
 Banking & Financial Institution Laws
 Insurance Laws
 Trade, Companies, Commercial or Mercantile Laws
 Securities & Exchange Laws
 Imports-Exports & Shipping Laws
 Labor and Industrial Laws
 Consumer Laws
 Foreign Trade & Foreign Exchange Laws
A business graduate needs to have knowledge of the laws which fall under aforementioned
categories. In IBA there is a course regarding legal environment of business which covers major
laws like: Labor Act (2006), Company Act (1994), Negotiable Instrument Act (1881),Partnership
Act (1932) etc.

3.2. SWOT Analysis

Strengths Weaknesses
 • Superior Brand Value
• Rigorous Admission Process
• Unique curriculum in line with global
& local business requirement
• Effective teaching method& faculties
with versatile knowledge base
• Strong intent for research &
development
• Strong alumni association
• Timely completion of every term
Opportunities
• More specialized programs like AFNA,
ACBA, DBA
• Starting online & distance learning courses
• More attachment with domestic & foreign
industry
• Offering degrees for foreign students
4.Process of Executing Strategy of IBA
4.1 Vision
To become a leading university in SoutheastAsia and remain as a top center of excellence in
higher education and research.
• Lack of industrial attachment
• Lack of collaboration with foreign
universities
• Major courses on technology & operations,
entrepreneurship, information systems,
management are not offered
 Dependence on Govt. funds
 Overall system is not digitalized
 No central digital repository of
documents, research works and
academic resources
Threats
• Financial prowess of private business
schools
• More business graduates from other
business schools than IBA
• Less number of faculties are being recruited
in recent times than before
• Political instability
4.2 Mission
To provide excellence in business education with a focus on career orientation as the country’s
top business school.

4.3 Values
 Integrity: In all our academic activities
 Excellence: In everything we do.
 Quality business education: Total commitment to this.
 New initiatives: Thinking ahead.
 Talent Management: Valuing and inspiring talents by providing research facility.

4.4 Balanced Scorecard

Strategic Objective Financial Objective

  Improve quality of academic programs  Improve budget performance
 Increase Student learning  Improve school operations efficiency
 Improve quality of students  Improve management/leadership
 Attract/keep talented faculty staffs
 Faculty Development
 Increase educational innovation

Internal Business Objectives Stakeholder’s Perspective

 Improve faculty productivity  Quality of faculty

 Improve recruitment/advertisement  Student centeredness
 Improve staff productivity  Alumni Satisfaction
 Maintain responsibilities towards  Value for money
communities

5 Strategic Group Mapping

Strategic groups are set of organizations emphasizing similar strategic dimensions and using a
similar strategy. They can be useful for analyzing an industry’s competitive structure. These
groups can also be helpful in diagnosing competition and positioning of organizations’s within an
industry.

An important competitive edge has been quality of education, such that it is perceived by the
students as well as the recruiters of different industry. Providing quality education at comparable
cost has led to the increase of brand value of IBA in the job market.
 Figure: Strategic Group Mapping of IBA

IBA remains at top if quality of education is compared. No other business school is at per with
IBA, Dhaka University. Even cost is also the lowest in IBA, DU. Faculty of Business Studies
(FBS), Dhaka University comes next to IBA with comparable cost. North South University &
BRAC University provides nearly similar quality of FBS, DU but with much higher cost

6 Drivers of Industry Change in Tertiary Education Industry of

Bangladesh

The world changes quickly, in ways that we can’t really imagine today and our strategy must be
designed to be futures ready – to be ready for many possible futures. Our research and industry
discussions highlighted a number of major forces impacting the higher education sector in
Bangladesh and internationally. These forces coalesced around the following key drivers of
change.

1. Democratization of knowledge and access

The massive increase in the availability of ‘knowledge’ online and the mass expansion of access
to university education in developed and developing markets will mean a fundamental change in
the role of universities as originators and keepers of knowledge.

2. Government Regulations

Competition of students, in Bangladesh and abroad, is reaching new levels of intensity with the
increasing number of GPA-5 every year, at the same time as governments face very tight
situation as students are increasing than the University’s capacity. Universities will need to both
maintain quality and face Government regulations as never before.

3. Digital technologies

Digital technologies have transformed media, retail, entertainment and many other industries –
higher education is next. Campuses will remain, but digital technologies will transform the way
education is delivered and accessed, and the way ‘value’ is created by higher education
providers, public and private alike. Once projector and computer were unthinkable in a
classroom but now it has become a part and parcel. To compete with the quality of education
abroad, the Universities will need to upgrade their digital technologies.

4. Global mobility

Global mobility will grow for students, academics, and university brands. This will not only
intensify competition, but also create opportunities for much deeper global partnerships and
broader access to student and academic talent.

5. Integration with industry

Universities will need to build significantly deeper relationships with industry in the decade
ahead – to differentiate teaching and learning programs, support the funding and application of
research, and reinforce the role of universities as drivers of innovation and growth.

6. Variety of Degrees

Higher education, especially Business education is now multidimensional. Even in Bangladesh a

no. of degrees are offered like CIMA, ACCA, CMA, CA, CFA, Specialization is everywhere. So
Universities must cope with these trending degrees as these are considered as substitute product
of the Graduate and Post Graduate degrees that Universities provide in general.

7. Demand for tertiary education

Tertiary education is referred to as the third stage or post-secondary education. Higher

education is taken to include undergraduate and postgraduate education. IBA as a business
school provides tertiary education. So demand of tertiary education is a driving force for the
business of IBA. In recent days demand for tertiary education is increasing at a higher rate. More
and more people are trying to get a BBA degree. Demand for MBA degree has also increased by
a certain level. As a result IBA is getting more & more applicants for its MBA & BBA
admission. To better serve different needs of tertiary education, IBA has also introduced different
short term program like: Accounting for non-accountants (AFNA), Management Development
Programs (MDP), Advanced Certificate in Business Administration (ACBA) etc.

7 Dominant Traits of Tertiary Education Industry in Bangladesh

Strong Regulatory Monitoring: Tertiary education industry is highly regulated in Bangladesh.

Government has its control in many cases through University Grants Commission (UGC).

Research & Development: Faculties & students in tertiary education industry in Bangladesh are
highly involved in research & development. Research outcomes are highly valued & have
industry usability in Bangladesh.

Standards & Conformity: In tertiary education industry, course curriculum is very much
standard. Due to industry acceptance almost all the business schools follow similar type of
curriculum for business degrees.
8 Conclusion

Due to its quality of education, IBA, Dhaka University has become the role model in business
study of Bangladesh. Most of the graduates of IBA are in the top notch positions in different
industry. Due to its quality of education, the degree of IBA is valued in both domestic &
international level.

By studying the whole lot scenario, we offer the following recommendation for IBA, Dhaka
University:

1. Introduce more & more technology in pedagogy & regular work processes
2. Increase industry attachment
3. Offer more short term & diverse degrees to meet the increasing needs of a quality
education for executives of domestic industry.
Bibliography
www.iba-du.edu

www. Wikipedia.org

www.worldbank.org

www.indexmundi.com

www.boi.gov.bd

Thompson, A. Crafting and Executing Strategy. Tata Mcgraw-Hill.