BANCO DE ORO or BDO UNIBANK INC

INTRODUCTION
The Philippine banking company Banco de Oro, also known as BDO Unibank,
Inc., is the largest bank in the Philippines in terms of total assets the firm provides
industry-leading products and services including Lending to corporate and consumers,
Depositing-taking, Foreign Exchange, Brokering, Trust and Investments, Credit Cards,
Corporate Cash Management and Remittance in the Philippines. Through its
subsidiaries, the Bank offers Leasing and Financing, Investment Banking, Private
Banking, Bancassurance, Insurance Brokerage and Stock Brokerage services.

HISTORY
BDO Unibank was established on January 2, 1968, as Acme Savings Bank, a
thrift bank with just two branches in Metro Manila. In November 1976, Acme was
acquired by the SM Group, the group of companies owned by retail magnate Henry
Sy, and renamed Banco de Oro Savings and Mortgage Bank. In December 1994,
BDO became a commercial bank and was renamed Banco de Oro Commercial Bank.
In September 1996, BDO became a universal bank, which led to the bank's name
being changed to the current Banco de Oro Universal Bank (BDO Unibank). It is one
of the many banks owned by a Chinese-Filipino in the Philippines (others
include Metrobank and Chinabank). BDO Unibank eventually became involved in
insurance services in 1997 (it is a bancassurance firm) by establishing a subsidiary
called BDO Insurance Brokers. In 1999, BDO Unibank expanded its insurance
services through partnerships with Zamora Assurance and Assicurazoni Generali
s.p.a. (Generali), one of the world's largest insurance firms, and Jerneh Asia Berhad, a
member of Malaysia's Kuok Group. Later, BDO Unibank partnered up with its
insurance affiliates, which are Generali Pilipinas Life Assurance Company and
Generali Pilipinas Insurance Company, in March 2000.

VISION
We shall be at the forefront of the leasing and financing industry in the Philippines
and in the Asia Pacific Region. We shall have the most extensive market reach and
shall be composed of highly trained, technically competent and upright professionals
working as a team and contributing to the growth of the nation and the communities
we serve. Recognizing that the customer is the focus of our activities, we shall lead
the industry by providing modern and relevant financial services which exceed their
expectations.
 
MISSION
We are in business for our customers, shareholders and employees. We shall
deliver creatively innovative products and cross-sell the BDO Unibank Group’s
services supported by procedures, systems and processes which will ensure utmost
customer satisfaction. We shall recognize and reward excellence in our employees
and shall provide an environment conducive to maximizing their potentials as we
work cohesively as a team. We shall generate consistently high returns for our
shareholders.
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POSTER FIVE ANALYSIS

Threat of new entrant -low

In the banking industry, there is a high capital requirement (reserve
requirement) needed as set by BSP. Setting up a bank requires a huge amount of
investments and technology requirements, especially with today’s fast-paced digital
age. Although there are many international banks present in the Philippines, the law
still regulates the number of foreign banks to be present in the country. Customers, on
the other hand, still have that brand loyalty and as one of the most trusted banks, most
people would still prefer BDO. Lastly, there are high switching costs for the
consumers, especially the depositors who have deposited via time-deposit. Customers
find it difficult to switch to other banks as their investments have a certain term.

Substitutes Products - low

There are no substitutes for financial services other than the substitutes of the
nonbanks that have quasi-banking functions. In the banking industry alone, only
banks are considered.
Bargaining Power of Buyers - moderate
                  The buyers are the consumers of the banks and they are either individuals
or corporate accounts. They can easily choose to invest their money in a different
bank depending on the interest rates. Similarly, the bank being the supplier, gives
these products and services to benefit the buyers financially.

Bargaining Power of Suppliers - moderate

                  Usually the suppliers of banks are only for ATM machines, cards, and
slips. They can change their prices depending on the market condition and these
materials and equipment are necessary for the banks to function in their daily
transactions, but without the banks, suppliers would have no use for these materials.

Rivalry among Competitors – High

Banks are constantly competing with one another, either through fast service,
variety of products, or innovative measures. BDO has its equally balanced
competitors, which are Metrobank and BPI. Lastly, with the undifferentiated services
(banks offer the same services like loans and deposits and asset management to name
a few) banks would compete with each other even more to get a larger market share

SWOT ANALYSIS
Being the premier universal bank in the country, BDO has utilized its strengths in
building customer loyalty throughout the years. With their slogan, “We Find Ways”,
the bank has been able to build a strong customer base to the extent of operating in
extensive banking hours. BDO is capable of meeting the customers’ needs efficiently
with the use of advanced technology. This allowed the company to diversify and
innovate its services through offering loans and deposits, payments and settlement
services, asset management, investment banking, dealership and brokerage, insurance
services, etc. In addition, BDO has a firm and competent management operated by the
Sy family, which pioneered the establishment of SM Malls. However, due to its
limited international presence, BDO has not yet expanded into most of the
geographical areas of the ASEAN region. The bank has also limited presence in rural
areas, and some branches pose inconsistencies with regard customer services. Also, a
big threat to BDO would be the tight competition in the market, with Bank of the
Philippine Islands (BPI) and Metropolitan Banking Corporation (Metrobank) as its
close competitors. The competitors of BDO in the market are not just confined in
domestic financial institutions but also in foreign banks. This can be due to the
increase of the presence of foreign banks as there is an existence of foreign bank
liberalization act. Other external factors contributing to the threats of BDO includes
government regulation. The bank is regulated by laws and the government is in
control when it comes to tax implementations; the Bangko Sentral ng Pilipinas (BSP),
on the other hand, determines the interest rates which affects the bank’s profits.
On a lighter note, the weaknesses and threats currently experienced by the BDO can
be transformed into opportunities and later on, become strengths of the company.
BDO can expand their company to foreign markets by taking advantage in the
ASEAN integration since global tie-ups can boost the bank’s presence abroad.
Another effective option would be to merge with other banks. BDO could also
increase its exposure in the Philippines, especially to rural areas to create new and
loyal customers. Instead of focusing internationally, the bank can focus on the local
level first and strengthen the market, then gradually increase exposure afterwards.
BDO can overcome its tight competitors by continuously improving and innovating
its product and services. Through this, the bank’s market shares would progressively
improve soon after. The BDO has more strengths that it could use to counter the
threats, especially its competitors. The company can maximize its strengths and
eliminate weaknesses through expansion and wide customer base. Using these
abilities, it can also maximize the opportunities that come with the ASEAN
integration.
Strategy Recommendation
                Based on the matrices and strategy formulation that was analyzed by our
group. We recommended that BDO should focus on improving intensive strategy.
This includes market penetration, market development and product development.
                 For Market Penetration, the company seeks to increase their current
products in current markets through marketing efforts by putting advertisement on
social network and distribution channel.
                 For Market Development, the company looks for new markets in which
current products can expand, by branching-out in rural areas.
                For Product development, the company considers new product possibilities
by hiring qualified employees and improving the quality of their service

CONCLUSION
Therefore I conclude that market development is the most effective strategy. Second,
is product development and lastly, market penetration .          
 First, BDO should focus more on market development strategy to attract new
potent customers and to increase their sales by putting BDO branches in semi-urban
areas, large scale organizations, and by doing business operation outside the country.
             Next, BDO should strategize through product development by continuously
improving their products and services. By doing research and development to satisfy
customer wants and needs.
             Lastly, BDO should improve their market penetration strategy by putting
advertisement on trendy markets today such as internet and TV commercials.
Although BDO is the leading bank in the country and it is necessity to the people to
save money, still BDO should improve their brand awareness to increase their target
market not only here in the Philippines but also outside the country. Having a full
knowledge of the market it can also have a big impact in the process of penetration of
a foreign market. To continuously gain, build and sustain a competitive advantage
over the competitors, BDO needs to maintain or increase the market share of their
current product and services by combining with pricing strategies, advertising, sales
promotion and other resources.
             If BDO can properly execute these three strategies, surely BDO can achieve
the overall goals and it can gain, build and sustain a competitive advantage among
others.