Strategic Audit of Habib Bank Limited (HBL)

I. Current Situation

A. Current Performance

Return on Investment (ROI) HBL being a publicly traded company (KARACHI: HBL) discloses its financial
statements. calculating ROI using metrics like Return on Equity (ROE) is 9.0% or Total asset are 12565
millions .
Market Share Industry reports suggest HBL holds a 31.4% share of the Pakistani banking sector. or industry
research firms.
Profitability Analyze trends in HBL is
Mark-up Earned 670,134,034

Total Income 277,297,21

Profit after Taxation 56,855,995

EPS 38.76
B. Strategic Posture

Vision
Enabling people to advance with confidence and success.
Mission
To make our customers prosper, our staff excel and create value for stakeholders.

•Six Point Business Agenda(Objective)

1. Relentless focus on customer experience
2. People Agenda to be our top priority
3. Making Innovation the Driving Force
4. Embedding Risk, Compliance and Control in our Business Principles
5. Commitment to deliver on P&L
6. Giving back to the Country and the Communities that we serve

International Footprint
Branch Network:
Bahrain ,Bangladesh ,Belgium ,China ,Lebanon Maldives ,Mauritius ,Oman,Singapore ,Sri Lanka ,Turkey and
UAE
Subsidiary:
HBL Bank UK
Associates:
Diamond Trust Bank Kenya/Tanzania/Uganda/Burundi
Kyrgyz Investment and Credit Bank Kyrgyz Republic

II. Broad of Directors

Mr. Sultan Ali Allana Dr. Najeeb Samie

Chairman
Director
Mr. Moez Ahamed Jamal Mr. Shaffiq Dharamshi Director Director
Mr. Salim Raza Director
Ms. Saba Kamal Director
Mr. Muhammad Aurangzeb President & CEO
Mr. Khaleel Ahmed Director

A. Top Management.

1. Top management at HBL Pakistan consists of the President & CEO, Group Heads, and Executive
Committee Members.

2. Top management's chief characteristics

Strong banking and financial expertise, understanding of local and global markets.
Skills are Strategic thinking, leadership, communication, and problem-solving.
Background is Mostly seasoned bankers with extensive experience in the financial sector.Style is
Collaborative, innovative, and customer-focused.International experience many top managers have worked in
international banks or have experience in global markets.

3. Top management's responsibility for performance HBL Pakistan has shown consistent growth and
profitability in recent years.Several top managers have been in their current position for less than three years,
with a mix of internal promotions and external hires.

4. Systematic approach to strategic management HBL Pakistan has a well-established strategic planning
process, with clear goals and objectives.The bank regularly reviews and updates its strategy to adapt to
changing market conditions.

5. Level of involvement in strategic management is top management is actively involved in the strategic
management process, with regular meetings and discussions on strategy and performance.They encourage a
culture of innovation and experimentation, with a focus on digital transformation and customer-centricity.

III. External Environment: Opportunities and Threats (SWOT)

A. Natural Physical Environment: Sustainability Issues

1. Forces affecting the corporation and industry:

Climate change effect upon Rising temperatures, changing precipitation patterns, and increased frequency
of extreme weather events.
Weather related events like Floods, droughts, and heatwaves.
Solar phenomena is Not a significant concern for HBL Pakistan.

Threats:

Increased risk of natural disasters affecting operations and customers.

* Potential impact on agricultural sector, affecting rural customers.
* Rising energy costs and potential disruptions to supply chains.

Opportunities:

* Investing in sustainable energy sources and reducing carbon footprint.

* Offering climate-resilient financial products and services.
* Supporting sustainable agriculture initiatives.

1. Regional differences:
Climate change impacts vary by region, with some areas experiencing more frequent flooding or droughts.
Weather related events have different effects on different regions, e.g., floods in Sindh vs. droughts in
Balochistan.

B. Societal Environment

1. General environmental forces affecting the corporation and industry:

Economic: Economic growth, inflation, interest rates, and trade policies.
Technological: Digital transformation, cybersecurity, and emerging technologies like blockchain.
Political-legal: Regulatory changes, tax policies, and political stability.
 Sociocultural: Changing customer preferences, demographics, and social responsibility expectations.

Threats:

* Economic downturns or instability.

* Rapid technological changes requiring significant investments.
* Political instability or regulatory changes affecting operations.
* Changing customer preferences and expectations.

Opportunities:

* Leveraging technology for digital transformation and innovation.

* Expanding into underserved markets or customer segments.
* Embracing social responsibility initiatives and sustainability.
* Adapting to changing regulatory environments.
1. Regional differences:
- Economic conditions vary by region, with some areas experiencing higher growth or inflation.
- Technological adoption and digital literacy differ across regions.
- Political-legal environments vary by country or region, affecting operations and regulations.
- Sociocultural factors differ by region, influencing customer preferences and expectations.

C. Task Environment

1. Forces driving industry competition:

a. Threat of new entrants: Medium (regulatory barriers, but potential for fintech disruption)

b. Bargaining power of buyers: Medium (customers have some bargaining power, but loyalty programs and
switching costs exist)

c. Threat of substitute products or services: High (fintech, digital payments, and mobile banking)

d. Bargaining power of suppliers: Low (HBL Pakistan has a strong bargaining position)

e. Rivalry among competing firms: High (intense competition among banks and fintech companies)

f. Relative power of unions, governments, special interest groups, etc.: Medium (government regulations and
union negotiations)

1. Key factors in the immediate environment:

- Customers: Increasing demand for digital banking and financial inclusion

- Competitors: Fintech companies, other banks, and emerging technologies
- Suppliers: Technology providers, payment processors, and vendors
- Creditors: Shareholders, investors, and regulatory bodies
- Labor unions: Employee negotiations and collective bargaining
- Governments: Regulatory changes, tax policies, and political stability
- Trade associations: Industry standards, best practices, and advocacy
- Interest groups: Environmental, social, and governance (ESG) considerations
- Local communities: Corporate social responsibility and community development
- Shareholders: Expectations for financial performance and sustainability

Threats:

- Increasing competition from fintech companies

- Regulatory changes and compliance requirements
- Cybersecurity risks and data breaches
- Economic downturns and market volatility
Opportunities:

- Growing demand for digital banking and financial inclusion

- Expanding into underserved markets and customer segments
- Embracing sustainable finance and ESG practices
- Leveraging technology and innovation for competitive advantage

D. Summary of External Factors (EFAS Table)

| External Factor | Weight | Rating | Comments |

| --- | --- | --- | --- |
| Threat of new entrants | 0.1 | Medium | Regulatory barriers, but potential for fintech disruption |
| Bargaining power of buyers | 0.1 | Medium | Customers have some bargaining power, but loyalty programs
and switching costs exist |
| Threat of substitute products or services | 0.2 | High | Fintech, digital payments, and mobile banking |
| Bargaining power of suppliers | 0.05 | Low | HBL Pakistan has a strong bargaining position |
| Rivalry among competing firms | 0.2 | High | Intense competition among banks and fintech companies |
| Relative power of unions, governments, special interest groups, etc. | 0.1 | Medium | Government regulations
and union negotiations |
| Customers | 0.15 | High | Increasing demand for digital banking and financial inclusion |
| Competitors | 0.2 | High | Fintech companies, other banks, and emerging technologies |
| Suppliers | 0.05 | Low | Technology providers, payment processors, and vendors |
| Creditors | 0.1 | Medium | Shareholders, investors, and regulatory bodies |
| Labor unions | 0.05 | Low | Employee negotiations and collective bargaining |
| Governments | 0.1 | Medium | Regulatory changes, tax policies, and political stability |
| Trade associations | 0.05 | Low | Industry standards, best practices, and advocacy |
| Interest groups | 0.05 | Low | Environmental, social, and governance (ESG) considerations |
| Local communities | 0.05 | Low | Corporate social responsibility and community development |
| Shareholders | 0.1 | Medium | Expectations for financial performance and sustainability |

A. Corporate Structure

1. HBL Pakistan has a centralized decision-making authority, with a clear organizational structure and defined
roles and responsibilities.

a. The bank has a hierarchical structure, with the President & CEO at the top, followed by Group Heads,
Executive Committee Members, and then various departments and branches.

b. The corporation is organized based on functions, with separate departments for Retail Banking, Corporate
Banking, Treasury, and Operations.

1. The structure is clearly understood by everyone in the corporation, with regular communication and training
programs to ensure employees are aware of their roles and responsibilities.

2. The present structure is consistent with current corporate objectives, strategies, policies, and programs, as
well as with the firm's international operations.

3. HBL Pakistan's structure is comparable to other banks in the industry, with some variations to suit its specific
needs and goals.

B. Corporate Culture

1. HBL Pakistan has a well-defined culture composed of shared beliefs, expectations, and values, emphasizing
customer-centricity, innovation, and teamwork.

2. The culture is consistent with the current objectives, strategies, policies, and programs, supporting the
bank's vision and mission.
3. The culture prioritizes environmental sustainability, with initiatives like green banking and eco-friendly
practices.

4. The culture emphasizes productivity, quality of performance, adaptability to changing conditions, and
internationalization, aligning with the bank's goals and industry trends.

5. The culture is compatible with employees' diversity of backgrounds, promoting inclusivity and equal
opportunities.

6. HBL Pakistan considers the values of the culture of each nation in which the firm operates, adapting its
practices to respect local customs and regulations.

C. Corporate Resources

1. Marketing

a. HBL Pakistan's current marketing objectives include increasing brand awareness, expanding digital banking
services, and enhancing customer experience.

i. Marketing objectives are clearly stated in the bank's annual reports and marketing campaigns.

ii. Marketing strategies are consistent with the bank's mission, objectives, and internal and external
environments.

b. HBL Pakistan performs well in terms of market position and marketing mix, with a strong brand presence in
Pakistan and a growing digital banking platform.

i. Trends: Increasing demand for digital banking, growing competition from fintech companies, and a need for
enhanced customer experience.

ii. Impact: Past performance has been strong, but future performance may be affected by increasing
competition and changing customer preferences.

iii. Analysis supports strategic decisions to expand digital banking and enhance customer experience.

iv. Marketing provides a competitive advantage through its strong brand presence and customer loyalty
programs.

c. HBL Pakistan's marketing performance compares favorably with similar corporations in Pakistan.

d. Marketing managers use accepted marketing concepts and techniques, including product life cycle analysis
and market segmentation.

e. Marketing adjusts to conditions in each country of operation, with localized marketing campaigns and
product offerings.

f. Marketing considers environmental sustainability, with initiatives like green banking and eco-friendly
practices.

g. Marketing managers play a key role in the strategic management process, providing insights on customer
preferences and market trends.

1. Finance

a. HBL Pakistan's current financial objectives include increasing profitability, enhancing shareholder value, and
maintaining a strong capitalization structure.

i. Financial objectives are clearly stated in the bank's annual reports and financial statements.
ii. Financial strategies are consistent with the bank's mission, objectives, and internal and external
environments.

b. HBL Pakistan performs well in terms of financial analysis, with a strong capitalization structure and balanced
cash flow.

i. Trends: Increasing profitability, growing demand for digital banking, and a need for enhanced risk
management.

ii. Impact: Past performance has been strong, but future performance may be affected by changing market
conditions and increasing competition.

iii. Analysis supports strategic decisions to expand digital banking and enhance risk management.

iv. Finance provides a competitive advantage through its strong capitalization structure and risk management
practices.

c. HBL Pakistan's financial performance compares favorably with similar corporations in Pakistan.

d. Financial managers use accepted financial concepts and techniques, including ratio analysis and capital
budgeting.

e. HBL Pakistan's finance function adjusts to the conditions in each country where it operates, considering
local regulations, tax laws, and market conditions.

f. HBL Pakistan's finance function copes with global financial issues, such as changes in interest rates,
currency fluctuations, and economic downturns, by implementing risk management strategies and maintaining
a diversified portfolio.

g. The financial manager plays a crucial role in the strategic management process at HBL Pakistan, providing
financial insights and analysis to support strategic decisions, such as
- Financial planning and budgeting
- Capital allocation and investment decisions
- Risk management and mitigation
- Performance measurement and evaluation
- Strategic initiatives and project financing

1. Research and Development (R&D)

a. HBL Pakistan's current R&D objectives include developing digital banking solutions, enhancing
cybersecurity, and improving customer experience.

i. R&D objectives are clearly stated in the bank's annual reports and innovation strategies.

ii. R&D strategies are consistent with the bank's mission, objectives, and internal and external environments.

iii. Technology plays a crucial role in corporate performance, driving innovation and efficiency.

iv. The mix of basic, applied, and engineering research is appropriate, focusing on applied research for product
development and engineering research for process improvement.

v. R&D provides a competitive advantage through innovative products and services.

b. HBL Pakistan receives a significant return on investment in R&D, with successful product launches and
process improvements.

c. The corporation is competent in technology transfer, using concurrent engineering and cross-functional
teams in product and process design.
d. Technological discontinuity plays a significant role in product development, driving innovation and disruption.

e. HBL Pakistan's investment in R&D is comparable to similar corporations, with a focus on in-house innovation
and strategic outsourcing.

f. R&D adjusts to conditions in each country of operation, considering local regulations and market conditions.

g. R&D considers environmental sustainability in product development and packaging, prioritizing eco-friendly
solutions.

h. The R&D manager plays a key role in the strategic management process, providing innovative solutions and
driving product development.

1. Operations and Logistics

a. HBL Pakistan's current manufacturing/service objectives include enhancing digital banking infrastructure,
improving customer experience, and increasing efficiency.

i. Objectives are clearly stated in the bank's annual reports and innovation strategies.

ii. Objectives are consistent with the bank's mission, objectives, and internal and external environments.

b. HBL Pakistan's operations capabilities include:

- Domestic and international services
- Outsourcing of non-core functions
- Purchasing handled through centralized procurement
- Suppliers and distributors operate sustainably
- Highest profit margins in digital banking services, lowest in traditional banking

i. For service-oriented corporation

- Service facilities: Digital banking platforms, branches, and ATMs

- Operations system: Continuous service over time to varied clientele
- Supporting equipment: IT infrastructure, ATMs, and digital banking software
- Automation: Online banking, mobile banking, and digital payment systems
- Facility capacities and utilization: Optimized for efficiency and customer convenience
- Efficiency ratings: High for digital banking, moderate for traditional banking

c. Facilities are vulnerable to:

- Natural disasters (e.g., floods, earthquakes)

- Local or national strikes
- Resource limitations from suppliers
- Material cost increases
- Government nationalization

d. Appropriate mix of people and machines (digital banking platforms and human customer support)

e. HBL Pakistan performs well relative to competition, balancing inventory and logistical costs. Key
performance indicators include:

- Costs per unit of labor, material, and overhead

- Downtime
- Inventory control management
- Scheduling of service staff
- Production ratings
- Facility utilization percentages
- Number of clients successfully served by category (digital banking, traditional banking)
1. Operations and Logistics (continued)

i. Trends: Increasing digital banking adoption, growing demand for efficient services, and rising competition.

ii. Impact: Past performance has been strong, but future performance may be affected by changing customer
preferences and technological advancements.

iii. Analysis supports strategic decisions to invest in digital banking and improve operational efficiency.

iv. Operations provide a competitive advantage through efficient digital banking platforms and customer
support.

f. Operations managers use appropriate concepts and techniques, including cost systems, quality control, and
inventory control management.

g. Operations adjust to conditions in each country, considering local regulations and market conditions.

h. Operations consider environmental sustainability, prioritizing eco-friendly practices.

i. The operations manager plays a key role in the strategic management process, ensuring efficient and
effective operations.

1. Human Resources Management (HRM)

a. HBL Pakistan's current HRM objectives include improving employee engagement, enhancing diversity and
inclusion, and developing leadership capabilities.

i. Objectives are clearly stated in the bank's annual reports and HR strategies.

ii. Objectives are consistent with the bank's mission, objectives, and internal and external environments.

b. HRM performance is strong, with low turnover, few grievances, and high employee satisfaction.

i. Trends: Increasing employee engagement, growing demand for diversity and inclusion, and rising competition
for talent.

ii. Impact: Past performance has been strong, but future performance may be affected by changing employee
expectations and market conditions.

iii. Analysis supports strategic decisions to invest in employee development and diversity initiatives.

iv. HRM provides a competitive advantage through a skilled and engaged workforce.

c. HRM performance compares favorably with similar corporations.

d. HRM managers use appropriate concepts and techniques, including job analysis, performance appraisal,
and training programs.

e. The company manages diversity well, with a strong record on human rights and monitoring of suppliers.

f. HRM adjusts to conditions in each country, considering local regulations and cultural differences.

g. Outsourcing plays a role in HRM planning, with strategic partnerships for non-core functions.

h. The HRM manager plays a key role in the strategic management process, ensuring a skilled and engaged
workforce.

1. Information Technology (IT)

a. HBL Pakistan's current IT objectives include:

- Enhancing digital banking infrastructure

- Improving cybersecurity
- Automating routine operations
- Supporting strategic decision-making

i. Objectives are clearly stated in the bank's annual reports and IT strategies.

ii. Objectives are consistent with the bank's mission, objectives, and internal and external environments.

b. IT performance is strong, with:

- A useful database for customer information and transaction history

- Automated routine clerical operations, such as account management and transaction processing
- Decision support systems for managers, including data analytics and performance metrics
- Strategic information systems for senior management, including market analysis and competitor intelligence

i. Trends: Increasing adoption of digital banking, growing demand for cybersecurity, and rising competition from
fintech companies.

ii. Impact: Past performance has been strong, but future performance may be affected by changing customer
preferences and technological advancements.

c. IT performance compares favorably with similar corporations.

d. IT managers use appropriate concepts and techniques, including data governance, IT service management,
and cybersecurity frameworks.

e. IT adjusts to conditions in each country, considering local regulations and market conditions.

f. IT considers environmental sustainability, prioritizing eco-friendly practices and energy efficiency.

g. The IT manager plays a key role in the strategic management process, ensuring alignment with business
objectives and providing strategic insights.

i. Trends: Increasing digital transformation, growing demand for cybersecurity, and rising competition from
fintech companies.

ii. Impact: Past performance has been strong, but future performance may be affected by changing customer
preferences and technological advancements.

iii. Analysis supports strategic decisions to invest in digital banking and cybersecurity.

iv. IT provides a competitive advantage through efficient digital platforms and robust cybersecurity.

c. IT performance compares favorably with similar corporations, with appropriate use of Internet, intranet, and
extranets.

d. IT managers use appropriate concepts and techniques, including data governance, IT service management,
and cybersecurity frameworks.

e. The company has a global IT and Internet presence, with adequate data management across national
boundaries.

f. The IT manager plays a key role in the strategic management process, ensuring alignment with business
objectives and providing strategic insights.
g. The company is appropriately using cloud computing, artificial intelligence, and blockchain technology to
enhance IT performance.

h. IT managers are knowledgeable about building and managing complex databases, establishing secure Web
sites, conducting system analyses, and implementing interactive decision-support systems.

i. The company has a strong IT governance framework, ensuring effective management and oversight of IT
resources.

j. The IT manager works closely with other departments to ensure IT alignment with business objectives and
provides strategic recommendations to senior management.

Summary of Internal Factors:

- Core Competencies:
- Strong brand presence in Pakistan
- Digital banking infrastructure
- Cybersecurity capabilities
- Efficient operations
- Distinctive Competencies:
- Innovative products and services
- Customer-centric approach
- Strategic partnerships
- Most Important Factors (Present):
- Digital banking infrastructure
- Cybersecurity capabilities
- Efficient operations
- Most Important Factors (Future):
- Artificial intelligence and machine learning capabilities
- Blockchain technology adoption
- Enhanced customer experience
- Candidates for Outsourcing:
- Non-core functions like IT support, call center operations
- Specific business processes like transaction processing, data analytics

Situational Analysis (SFAS Matrix):

•External Strategic Factors (EFAS)

+ Strengths:
- Growing demand for digital banking in Pakistan
- Increasing adoption of mobile banking
+ Weaknesses:
- Intense competition from fintech companies
- Rising cybersecurity threats
+ Opportunities:
- Expanding into new markets and geographies
- Leveraging blockchain technology for innovation
+ Threats:
- Changing regulatory requirements
- Economic uncertainty and recession

•Internal Strategic Factors (IFAS)

+ Strengths:
- Strong brand presence in Pakistan
- Efficient digital banking infrastructure
+ Weaknesses:
- Limited artificial intelligence and machine learning capabilities
- Dependence on legacy systems
+ Opportunities:
- Investing in innovation and R&D
- Enhancing customer experience through technology
+ Threats:
- Inadequate cybersecurity measures
- Inefficient operations and processes

Review of Mission and Objectives:

1. The current mission and objectives are partially appropriate, but they need revision to address the key
strategic factors and problems. The mission and objectives should be more specific, measurable, achievable,
relevant, and time-bound (SMART).

2. The mission and objectives should be changed to:

Mission: "To be a leading digital bank in Pakistan, providing innovative financial solutions and exceptional
customer experience, while maintaining a strong brand presence and contributing to environmental
sustainability."

Objectives:

- Increase digital banking adoption by 30% within the next 18 months

- Enhance customer experience through AI-powered chatbots and personalized services
- Reduce carbon footprint by 25% within the next 2 years
- Expand into 3 new markets within the next 24 months
- Achieve a 20% increase in profitability within the next 18 months

Changing the mission and objectives will have the following effects on HBL Pakistan:

- Improved focus on digital transformation and innovation

- Enhanced customer experience and loyalty
- Increased efficiency and reduced costs
- Better alignment with environmental sustainability goals
- Increased competitiveness and market share
- Improved employee engagement and motivation.

Strategic Alternatives (TOWS Matrix):

1. Fine-tuning current strategies may not be enough to meet HBL Pakistan's revised objectives, as the bank
needs to adapt to changing market conditions and customer needs in the Pakistani banking industry.

2. Major feasible alternative strategies:

a. Corporate Strategies:

- Stability: Maintain HBL Pakistan's current market position and product offerings, ensuring low risk but
potentially limiting growth potential.
- Growth: Expand HBL Pakistan's presence into new markets and product offerings, increasing market share
but requiring significant investment and involving high risk.
- Retrenchment: Focus on HBL Pakistan's core business and reduce costs, improving efficiency but potentially
limiting growth potential.

Business Strategies:

- Cost Leadership: Focus on reducing costs and increasing efficiency, enabling HBL Pakistan to offer
competitive pricing but potentially limiting product differentiation.
- Differentiation: Focus on product innovation and customer experience, allowing HBL Pakistan to charge
premium prices but requiring significant investment in product development.

Scenarios:
- Scenario 1: Digital Transformation (Growth Strategy + Differentiation) - HBL Pakistan can leverage digital
transformation to drive growth and differentiation, enhancing customer experience and increasing market
share.
- Pros: Increased market share, improved customer experience, and enhanced brand reputation.
- Cons: High investment costs, risk of technological failure, and potential disruption to existing operations.
- Scenario 2: Cost Efficiency (Stability Strategy + Cost Leadership) - HBL Pakistan can focus on cost efficiency
to improve operational efficiency and reduce costs, but may limit growth potential and risk losing market share.
- Pros: Improved efficiency, competitive pricing, and reduced costs.
- Cons: Limited growth potential, risk of losing market share, and potential lack of innovation.

Recommended Strategy:

- Scenario 1: Digital Transformation (Growth Strategy + Differentiation) - This scenario aligns with HBL
Pakistan's revised mission and objectives, addressing key strategic factors and problems. By leveraging digital
transformation, HBL Pakistan can drive growth, enhance customer experience, and maintain its position as a
leading bank in Pakistan.

C. Functional Strategic Alternatives:

1. Marketing:

- Alternative: Digital Marketing Focus (social media, online advertising, content marketing) to enhance HBL
Pakistan's online presence and engage with customers more effectively.
- Pros: Increased online presence, targeted customer engagement, and improved brand reputation.
- Cons: High competition in the digital space, constantly evolving digital landscape, and potential difficulty in
measuring ROI.

1. Operations:

- Alternative: Process Automation and Optimization to streamline HBL Pakistan's operations and improve
efficiency.
- Pros: Improved efficiency, reduced costs, enhanced customer experience, and increased productivity.
- Cons: High initial investment, potential job displacement, and need for significant changes to existing
processes.

1. Human Resources:

- Alternative: Talent Acquisition and Development (focus on digital skills) to attract and retain top talent and
improve HBL Pakistan's digital capabilities.
- Pros: Attract and retain top talent, improved digital capabilities, and enhanced employee skills.
- Cons: High recruitment costs, potential cultural fit issues, and need for significant investment in training and
development programs.

1. Information Technology:

- Alternative: Cloud-Based Infrastructure and Artificial Intelligence Adoption to enhance HBL Pakistan's IT
capabilities and improve data analysis.
- Pros: Scalability, flexibility, enhanced data analysis capabilities, and improved customer insights.
- Cons: Security risks, high implementation costs, and potential dependence on third-party providers.

1. Finance:

- Alternative: Digital Payment and Transaction Solutions to improve HBL Pakistan's payment systems and
enhance customer experience.
- Pros: Increased efficiency, reduced costs, improved customer experience, and enhanced transaction security.
- Cons: High initial investment, potential security risks, and need for significant changes to existing payment
systems.
Recommended Strategy for HBL Pakistan:

1. Corporate Level:

- Growth Strategy: Expand into new markets and product offerings, such as digital banking and financial
inclusion.
- Differentiation: Focus on product innovation and customer experience, leveraging HBL Pakistan's brand
reputation and customer loyalty.

1. Business Level:

- Digital Transformation: Implement digital solutions to drive growth and differentiation, enhancing customer
experience and product offerings.
- Cost Efficiency: Implement cost leadership strategies in specific business units, such as process automation
and optimization, to improve efficiency and reduce costs.

1. Functional Level:

- Marketing: Focus on digital marketing to reach new customers and enhance brand presence.
- Operations: Implement process automation and optimization to improve efficiency and reduce costs.
- Human Resources: Develop talent acquisition and development programs, focusing on digital skills, to
enhance employee capabilities.
- Information Technology: Adopt cloud-based infrastructure and artificial intelligence to drive digital
transformation and innovation.
- Finance: Develop digital payment and transaction solutions to enhance customer experience and drive
growth.

Justification:

- Resolves long-term problems by addressing changing market conditions and customer needs.
- Resolves short-term problems by improving efficiency and reducing costs.
- Effectively deals with strategic factors by leveraging digital transformation, product innovation, and customer
experience.

Policies:

- Develop policies for data privacy and security to ensure customer trust and confidence.
- Establish a digital transformation office to oversee implementation and ensure successful execution.
- Create an innovation incubator to foster new product development and drive innovation.
- Develop a comprehensive training program for digital skills to enhance employee capabilities.

Impact on Core and Distinctive Competencies:

- Enhances core competencies in digital banking and customer experience.

- Develops new distinctive competencies in artificial intelligence and data analytics.
- Strengthens brand presence and reputation for innovation and customer-centricity, enhancing HBL Pakistan's
position as a leading bank in Pakistan.

Implementation:

A.
1. Programs to implement the recommended strategy:

- Digital Transformation Program (DTP) to drive HBL Pakistan's digital banking initiatives and enhance
customer experience.
- Innovation Incubator Program (IIP) to foster innovation and develop new banking products and services.
- Customer Experience Enhancement Program (CEEP) to improve customer satisfaction and loyalty.
- Process Automation and Optimization Program (PAOP) to streamline operations and enhance efficiency.
- Talent Acquisition and Development Program (TADP) to attract and develop top talent in the banking industry.
1. Who should develop these programs:

- Cross-functional teams led by senior executives from various departments, including IT, Marketing, and
Operations, to ensure a collaborative approach.
- External consultants and experts as needed, to bring in fresh perspectives and industry best practices.

1. Who should be in charge of these programs:

- Senior executives with clear accountability and authority, such as the Chief Digital Officer, Chief Innovation
Officer, and Head of Customer Experience, to oversee program implementation and ensure successful
execution.

B.
1. Financial Feasibility:

- Conduct a thorough cost-benefit analysis to assess the financial viability of new initiatives and programs, such
as digital transformation and innovation, and develop pro forma budgets to ensure effective resource allocation.
- Prioritize programs based on their expected Return on Investment (ROI) and strategic importance to HBL
Pakistan's growth and success, ensuring alignment with the bank's overall vision and objectives.

1. Priorities and Timetables:

- Develop realistic timelines and milestones for the implementation of new initiatives and programs, taking into
account potential challenges and risks, and ensuring achievable goals and objectives.
- Establish clear metrics for success, such as key performance indicators (KPIs) and benchmarks, to measure
progress and evaluate the effectiveness of new initiatives and programs, and make data-driven decisions to
drive HBL Pakistan's growth and success.

C.
1. New Standard Operating Procedures (SOPs):

- HBL Pakistan should develop new SOPs for digital transformation, innovation, and customer experience, to
ensure a seamless and efficient transition to new digital banking platforms and services.
- Update existing SOPs to align with new strategies and programs, such as the adoption of emerging
technologies like blockchain and artificial intelligence, and the expansion of digital banking services.

1. Training and Communication:

- HBL Pakistan should develop comprehensive training programs for employees to ensure they have the
necessary skills and knowledge to effectively implement new strategies and programs, and provide excellent
customer service in a rapidly changing banking landscape.
- Communicate changes and progress to all stakeholders, including employees, customers, shareholders, and
regulators, to ensure transparency and buy-in, and to build trust and confidence in HBL Pakistan's vision and
strategy.

Evaluation and Control:

A.
1. Current Information System:

- HBL Pakistan's current information system is capable of providing some feedback, but it is limited in scope
and depth, and needs enhancement to measure strategic factors and performance metrics, such as customer
satisfaction, revenue growth, and risk management.

1. Performance Measurement:

- With enhanced systems, performance can be pinpointed by area, unit, project, or function, allowing for more
effective monitoring and evaluation, but HBL Pakistan needs to develop key performance indicators (KPIs) and
dashboards to measure progress towards its strategic objectives.
1. Timeliness:

- Information is not always timely at HBL Pakistan, and there needs to be improvement in reporting cycles to
ensure that data is available when it is needed, and that it is up-to-date and relevant.

1. Benchmarking:

- Benchmarking is not currently used extensively at HBL Pakistan, and it needs to be adopted to evaluate
functions and activities, such as customer service, digital banking, and risk management, to identify areas for
improvement and optimize performance.

Recommendations:

- Enhance HBL Pakistan's information systems to measure strategic factors and performance metrics, and
provide real-time feedback.
- Develop KPIs and dashboards

B.

1.Control Measures:

- HBL Pakistan has partially implemented control measures, but needs to enhance them to ensure
conformance with the recommended strategic plan, including regular audits and compliance checks to monitor
and control risks.
- Clear standards, metrics, and benchmarks are needed to measure performance in areas like customer
service, digital banking, and risk management, to ensure alignment with the bank's strategic objectives.

Standards and Measures:

- HBL Pakistan is using some appropriate standards and measures, but needs to review and update them to
align with its new strategy, including metrics and KPIs to measure progress towards its goals.
- Additional metrics and KPIs need to be developed to measure performance in areas like customer acquisition,
revenue growth, and employee engagement, to ensure the bank is meeting its strategic objectives.

Reward Systems:

- HBL Pakistan has reward systems in place, but needs to revise them to recognize and reward good
performance aligned with its new strategy, including bonuses and promotions tied to performance metrics.
- Incentives and recognition programs need to be developed to motivate employees, including training and
development opportunities, employee recognition programs, and rewards for innovation and excellence.

Recommendations:

- Develop and implement clear standards, metrics, and benchmarks to measure performance in areas like
customer service, digital banking, and risk management.
- Enhance control measures to ensure conformance with the recommended strategic plan, including regular
audits and compliance checks.
- Revise reward systems to recognize and reward good performance aligned with the new strategy, such as
employee recognition programs and bonuses tied to performance metrics.