University of Dhaka

Department of International Business

Course Code: EIB 511

Business Research Methods

Term Paper
Topic: Strategy Implementation of bKash Ltd.

Prepared By:
Syed Mashhud Quader
ID# 801723007

Supervisor
Professor (Dr.) Md. Kamal Uddin

Date of Submission:
5/8/2018
 Table of contents

Title Page Number

1. Chapter 1: Introduction
- 1.1) Background of the study 2
- 1.2) Rationale of the study 3
- 1.3) Objectives of the study 3
- 1.4) Scope of the study 4
- 1.5) Limitations of the study 4
2. Chapter 2: Research Methodology
- 2.1) Concept of the chapter 5
- 2.2) Research Design 5
- 2.3) Target Population 6
- 2.4) Methods of Data Collection and Instruments used 6
- 2.5) Ethical Consideration 6
3. Chapter 3: Organizational Profile 7
4. Chapter 4: Analysis
- 4.1) Corporate Level Strategy 11
- 4.2) Business Level Strategy 16
- 4.3) Functional Level Strategy 23
- 4.4) Marketing Strategy and Mix 27
5. Chapter 5: Conclusion 31
6. Chapter 6: Recommendations 32
7. Bibliography 35
 Executive Summary

The purpose of the project is to analyze the strategic management of bKash to have a clear understanding

on how the company is affected by the external and internal environment and the different strategies the

company is pursuing right now and what should be done to overcome the challenges the company faces.

The project seeks to find out how bKash is performing compared to the competitors and the main

objective is to find out the strategies the company is pursuing and what needs to be done to improve

those strategies so that they can become the market leader. Through the project, the major findings

include the different strategies the company is pursuing and through these analysis I have tried out to find

out the problems of the company and what should be done to overcome them like in the corporate level

strategy, business level strategy and functional level strategy. Major recommendations include company

Can implement tapper integration, create more strategic alliances, pursue product development strategy,

implement cash management system, overall system improvements, strengthening the overall security

system and educating the rural customers on bkash through mobile retailers. Throughout the project we

faced many problems as time frame was still not enough as there were plenty of other works too with

added courses. Finally by delivering this project, I seek to improve the current position of the company so

that it can help them to gain their mission, which is to become the number one mobile banking brand in

Bangladesh.

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 CHAPTER 1

INTRODUCTION

1.1 Background of the study:

Banking system in Bangladesh has gone through many sweeping changes in the lapse of time. It has been

shaped by economic as well as political philosophies. The growth and evaluation of financial system of

Bangladesh since liberation can be clearly viewed. Since then the banking sector of Bangladesh

experienced different kinds of changes. With the help of the combination of two most recent

technological advancements – internet and mobile phone, banks of Bangladesh introduced a new service

which is known as “Mobile Financial Services” and thus it gave birth to a new industry which is known as

“Mobile Banking Industry”. Mobile banking refers to a system that enables bank customers to access

accounts and general information on bank products and services through a Mobile device. Banking

through mobile phone has been common in developed countries for years. The real potential of “m-

banking” may be to make basic financial services more accessible to millions of poor people. Therefore,

this mobile banking industry is significantly in favor of the rural areas compared to the urban areas. There

are around 160 million people in Bangladesh, of which only 13 percent have bank accounts whereas more

than 95 percent are mobile phone users. Banks can now offer the banking services to rural and unbanked

population through mobile phone. Mobile Banking is new in our economy. Only a few banks are now

offering this service. Through Internet Banking most of the banks are offering only balance information.

Actual fund transfer and fund disbursement is not possible in all the banks that are offering internet

banking services. So this product will enjoy the benefit of a first mover. It is cheap both for the banks and

the customers. The bank will be able to lower down the overhead costs and make more profit out of it.

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1.2 Rationale of the study:

For my research I chose bKash which started its operation here in Dhaka in the year 2011. It is a

mobile financial service in Bangladesh operating under the authority of Bangladesh Bank as a subsidiary

of BRAC Bank Limited. I chose this company as Fortune magazine ranked bKash among the top 50

companies in the list of "Change the World" in 2017. Hence I wanted to find out the key reasons as

to why this has been happening.

1.3 Objectives of the study:

Broad Objective:

The main objective of this research is to figure out the strategies the company is implementing

in order to uphold their first mover advantage in this industry.

Specific Objectives:

To achieve this broad objective, the following specific objectives were looked into:

- Corporate level strategy

- Business level strategy

- Functional level strategy

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1.4 Scope of the study:

This research study is based on bKash which is part of BRAC Bank Ltd. The main focus will be on

how the strategies have been implemented to stay ahead of its competitors.

1.5 Limitations of the study:

This particular study had a number of limitations. To begin with, time was one of the limitations

that I had. Due to time limitation I had trouble in making the report perfect and on point. Also,

due to the current situation of the country it was hard to travel to acquire information required

to make the report even better. Moreover, almost all the personnel who shared their information

were not comfortable to answer the questions asked. But I overcame the limitations by informing

participants that the information provided would be used for academic purposes only and would

thereby be treated with confidentiality. Also, I made attempts to show the respondents how the

research was to benefit them. For this study a lot of respondents took their time to respond and

it increased the content of the research.

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 Chapter 2

Research Methodology

2.1 Concept of the Chapter:

This chapter discusses all the approaches and methods that were taken and used for the purpose

of this particular study. This chapter includes of different sub sections which includes but not

limited to-research design, data collection, data analysis etc. The main aim of this study is to

analyze the strategies that the company has implemented in order to be one the most successful

mobile banking company in the country.

2.2 Research Design:

In order to produce results, the collected data research philosophy plays a crucial role. For this

particular study, a case study will be analyzed and based on that, a conclusion will be drawn.

According to Swanborn(2010)- The case study methodology involves studying a specific

phenomenon intensely by focusing on one or a few of instances, or cases, allowing for more

depth than a more extensive research approach would. According to Yin (2003) a case study

design should be considered when: (a) the focus of the study is to answer “how” and “why”

questions; (b) you cannot manipulate the behavior of those involved in the study; (c) you want

to cover contextual conditions because you believe they are relevant to the phenomenon under

study; or (d) the boundaries are not clear between the phenomenon and context. I used a case

study method as it was difficult to get the answers.

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2.3 Target Population:

Target population can be defined as the group of people whose opinion will reflect in the research

result. Mugenda & Mugenda (2003) define a target population as that population to which a

researcher wants to generalize the findings of a study. As bKash was chosen for this study, the

population wasn’t huge as this was mostly done through secondary data and for the primary data

collection, I contacted a few employees of the company with whom I had a good rapport.

2.4 Methods of data collection and instruments used:

For this particular study, permit was taken from the employees interviewed and also from the

organization on which the case is based on. Moreover, primary and secondary data were used to

make it more accurate.

2.5 Ethical Consideration:

The researcher assured the respondents that the information obtained would be kept

confidential and strictly for the research purpose. The respondents were also informed that they

were free to participate or withdraw from the study at their free will.

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 Chapter 3
Organizational Profile

bKash Limited is a subsidiary of BRAC Bank. It is a joint venture organization between Money in
Motion, LLC, USA and Brac Bank Limited Bangladesh (bKash, 2013). Its mission is to provide
affordable, convenient and reliable financial service towards the customers. Its technology
platform is Fundamo (visa) (Bangladesh Bank, 2013). It also has the Full Mobile Financial Service
permission. bKash’s mobile network partners are Robi, GrameenPhone, Banglalink and Airtel. It
is the only the mobile financial service provider which has one service menu for all the operators.
It has in total 30,000 agents all over the country. Still now it has the highest numbers of agents
in Bangladesh. bKash Limited is giving the service of cash in, cash out, send money (P2P) and
payment (payment through organization or in shop). It is offering free registration and also free
balance, statement check and changing PIN offer. Rather than the authorized agents it is also
available in all Robi WICs, BRAC channel and Continental Courier channel. Its highest amount of
daily transaction limit is 125,000 Taka and highest amount of monthly transaction limit is 250,000
Taka. Also its monthly highest P2P transaction limit is 25,000 taka (Bank, July 2012). Still now,
bKash is the most visible mobile bank in Bangladesh. It is running heavy advertising from the
beginning. It is running its marketing through TV advertisement, Radio advertisement, billboard,
Poster, festoon, leaflet, shop pointer etc.

bKash provides four type of services. They are:

 Cash- In
 Cash-Out
 Send Money
 Payment

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Cash- In

This is a process of deposit money to bKash account. This service is provide in the agent point.
The total process is given bellow:

1. Go to any bKash Agent

2. Let the agent know the amount want to Cash In
3. Write down the bKash Account Number and the Cash In amount in the Agent Register
4. Pay the amount of money want to Cash in
5. In exchange, the agent will send balance to bKash Account.

Cash-Out

If bkash users have sufficient balance in their bKash Account, users can withdraw cash anytime.
There is two way of withdraw money from bkash account, one option is from agents and another
is from BRAC Bank ATM Booth.

Send Money

Send Money allows you to transfer money from one bKash Account to another bKash Account.
To send money the process is given bellow:

 Go to any bKash Mobile Menu by dialing *247#

 Choose “Send Money”
 Enter the bKash Account Number who want to send money to
 Enter the amount who wants to send
 Enter a reference about the transaction.
 Now enter the bKash Mobile Menu PIN to confirm the transaction

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Payment

Anyone can make payments from bKash Account to any “Merchant” who accepts “bKash
Payment”. For example, if anyone wants to pay after shopping the process will be:

 Go to your bKash Mobile Menu by dialing *247#

 Choose “Payment”
 Enter the Merchant bKash Account Number for pay
 Enter the amount want to pay
 Enter the Counter Number* (the salesperson at the counter will tell you the number
 Now enter bKash Mobile Menu PIN to confirm (bKash, 2013)

Mobile Banking in Bangladesh Banking

Bangladesh is 8th largest populated country in the world with around 161 million populations. In
Bangladesh, almost 31.5% populations are living under poverty (The Central Intelligence Agency
(CIA), 2013). From this huge population only 13% people have bank account. On the other hand,
there are almost 90 million mobile phone subscribers in Bangladesh. From the point of view of
Bangladesh, the expansion of e-banking is opposed by the problem of institutional, infrastructure
and regulatory problems. Absence of central networking system, unskilled people and absence
of proper policies are lacking behind the whole system. Bangladesh Bank is developing country’s
payment system but by that time all the banks are not able to improve their ICT system. In this
scenario, it’s hard to reach to mass people with current banking system. From this plot, the
concept of mobile banking emerged to reach the banking facility to the unbanked people. People
also take this system as good one as 69% people believe this “mobile banking” has prospect in
Bangladesh (Bank, July 2012). Mobile banking is a new banking concept in Bangladesh.
Bangladesh Bank is influencing banks to operate this mobile in a serious manner to reach to the
unbanked people of Bangladesh. Bangladesh Bank believes that mobile is the easiest way to
reach to the rural part of the country with the banking service.

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Still now, Bangladesh Bank has given license to 23 banks to run this mobile banking operation.

Among these, 14 banks have full Mobile Financial Service permission and other 9 banks have the

permission for international remittance transaction only through mobile. (Bank, July 2012)

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 Chapter 4
Analysis

4.1 Corporate Level Strategy:

Corporate level strategies drive a company’s business model over time and determine which
types of business and functional level strategies managers will choose to maximize long run
profitability. Corporate level strategies make the headline decision for the company and give a
direction to the company. We now look at the different corporate level strategies bKash in
pursuing.

Mission

By providing financial services that are convenient, affordable and reliable, bKash aims to widen
the net of financial inclusion. bKash wants to provide a solution for Mobile Financial Services,
built on a highly scalable Mobile Money platform, allowing the people of Bangladesh to safely
send and receive money via mobile devices.

Ultimate objective

The ultimate objective of bKash is to ensure access to a broader range of financial services for
the people of Bangladesh. It has a special focus to serve the low income masses of the country
to achieve broader financial inclusion by providing services that are convenient, affordable and
reliable.

As bKash is a subsidiary of Brac Bank Bangladesh and Money in Motion LLC USA we start analyzing
the corporate level strategies by keeping them in mind. bKash follows the following corporate
level strategies in its business-

1) Diversification- Related linked Strategy

2) Strategic Alliances

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3) Strategic Outsourcing

Diversification- Related linked Strategy

bKash was created because of a corporate level strategy of Brac Bank and Money in motion. They
are both financial institutions who decided to come together to create another financial
institution called bKash. bKash direct links with Brac Banks business as well as money in motions
business. But the links are not that strong. They basically created bKash by transferring
knowledge and competencies. Brac Bank and Money in motion both are huge corporations. They
already have developed competencies and capabilities. So bKash is enjoying the economics of
scope because of its parent companies. Market power of Brac Bank is also there for bKash to
enjoy. They have a big support as their parent company is so strong.

Strategic Alliances

bKash is basically a product of a strategic alliance. Brac Bank Bangladesh and Money in Motion
USA together built this institution by forming a strategic alliance. At the time bKash started its
operations Brac bank had 51% of the shares of bKash whereas Money in motion had 49% of the
shares. They are also focusing on including more strategic partners for bKash. In April 2013,
International Finance Corporation (IFC), a member of the World Bank Group, became an equity
partner and in April 2014, Bill & Melinda Gates Foundation became the equity investor of the
company. Together in a long term based operation; these institutions are making the project
bKash successful. By forming these strategic alliances bKash has actually ensured that each
partner will keep their side of the bargain and also commitment is credible.

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Strategic Outsourcing

In the process (cash in, cash out etc.) of the business of bKash there must be a mobile phone
operator to make the process happen. But bKash does not own a mobile phone operator
company. This important activity in the value chain of bKash is outsourced. The job has been
given to the existing mobile phone operators in Bangladesh. So the individual specialist
companies which are the mobile phone operators get to carry out this activity for bKash. So,
bKash strategically outsource the activity to them. The process is less costly for bKash to
outsource. And also people of Bangladesh are already using different mobile phone operators.
So offering the services through them makes it more convenient for consumers. It also helps
bKash to reach a very big market at once.

Corporate level strategies of bKash and its mission- The relationship

So the corporate level strategies of bKash are basically Diversification- Related linked Strategy,
Strategic Alliances and Strategic Outsourcing. And the mission is- “By providing financial services
that are convenient, affordable and reliable, bKash aims to widen the net of financial inclusion.
bKash wants to provide a solution for Mobile Financial Services, built on a highly scalable Mobile
Money platform, allowing the people of Bangladesh to safely send and receive money via mobile
devices.” The related linked strategy allows bKash to achieve and enjoy economics of scope. The
same strategy allows bKash to have the market power from the very beginning. Strategic alliances
are keeping bKash stable and long term. And outsourcing is allowing bKash to cut the cost. So the
aim of a convenient, affordable and reliable service is fulfilled. The economics of scope is allowing
bKash to give consumers a wide net of financial services through mobile banking. The strategic
allowance of bKash is also allowing bKash to make the service long term and safe.

Thus through these strategies bKash is stepping closer and closer to its mission. The ultimate goal
of bKash is to ensure access to a broader range of financial services for the people of Bangladesh.
It has a special focus to serve the low income masses of the country to achieve broader financial
inclusion by providing services that are convenient, affordable and reliable. By following the

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above strategies bKash is being able to keep its services convenient, affordable and reliable. And
also there are scopes to widen the range of services that bKash can offer to the market.

Corporate Risk Management

Corporate risk management refers to the initiatives taken by the organizations that may assist
the business and functional level management of the organization in reducing the risks.
Corporate level of bKash also took some steps that may reduce the overall risk of the company
at the same time provide efficiency in overall activities of business and functional level
managements.

Increased Scope of operations

bKash Activates International Remittance Facilities

The primary purpose of bKash is to assist the lower income and middle income people in
Bangladesh in money transfer activities. They have widen their scope of operations by
introducing international remittance facilities to their target market. This may help the company
to tap into a new market which comprises of international money transfer activities. bKash
account holders can directly receive international remittance on their mobile phones. This service
will immensely facilitate the remittance receivers all over the country as well as give peace in
mind to millions of remitters abroad. South East bank Limited (SEBL) and bKash recently signed
an agreement on remittance disbursement service to facilitate beneficiaries of foreign
remittance to receive funds directly on their mobile phones. This initiative helps bKash to
diversify their risk of operating only in the local market where many competitors are looming
high to capture market share. They have tap into new market as well and reduced their corporate
risk.

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bKash Facilitates in Brac Microfinance

Microfinance is the most robust term in third world countries these days. Hundreds of
organizations are working to alleviate poverty in poor countries through microfinance. In
Bangladesh microfinance term has been taken to a new dimension by Dr. Muhammad Yunus. As
a company related to financial activities, bKash took a new toll by agreeing to facilitate Brac
Microfinance by their operations. With their new agreement between bKash and Brac
microfinance, they will be facilitating the collection process of deposits for Saving Schemes from
their customers through bKash. This initiative is very significant for bKash as they are the first
company in the industry to facilitate this service. This service will reduce their overall risk as well.

Increased Efficiency

Performance Management System among Employees and Agents

bKash is keen to increase their efficiency at any cost. A vast number of operations of bKash is
facilitated by their agents who are the direct links to their customers. At the same time
employees of bKash are considered as asset as they are the main driving force for the company.
With an aim to increase efficiency, bKash has introduced separate Performance management
System (PMS) for its employees and agents. But the overall goals are same in both the systems.
The main goals of this Performance management systems are-

 Enhance the overall performance of agents and employees.

 Develop a positive way of approaching to the customers.
 Help them to perform according to the organizational culture.
 Promote best practice in conducting tasks.

These steps will help the agents and employees of bKash to increase their efficiency. Increased
efficiency is a must to compete in a very competitive industry like mobile money transfer industry
in Bangladesh. Less efficiency in operation can result in loss of market share to the competitors.
Through the above initiatives bKash has made sure that their efficiency level rest at the zenith
point than their competitors which ultimately will reduce their corporate risk.

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4.2 Business Level Strategy:

An organization's core competencies should be focused on satisfying customer needs or

preferences in order to achieve above average returns. This is done through Business- level
strategies. Business level strategies detail actions taken to provide value to customers and gain a
competitive advantage by exploiting core competencies in specific, individual product or service
markets.

Key Issues of Business Level Strategies

There are some key issues of business level strategies which are concerned about the customers
of an organization and satisfying customers is the foundation of successful business strategies.
Therefore, before discussing about the business level strategies of Bkash, key issues in the
business level strategies are being discussed below:

Who will be served?

The ultimate objective of bKash is to ensure access to a broader range of financial services for
the people of Bangladesh. More than 70% of the population of Bangladesh lives in rural areas
where access to formal financial services is difficult. Yet these are the people who are in most
need of such services. Therefore, the main customer group that is being served by Bkash is the
low income group of people of Bangladesh. At present the educated, upper class people also use
Bkash for several transaction purposes. Moreover, Bkash is also being used to collect foreign
remittances. Therefore, Bkash also serve the upper class segment of people.

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What needs to be satisfied?

Bkash wants to fulfill the financial needs of people in a way that is more convenient, affordable
and reliable. Ensuring access to a broader range of financial services for Bangladeshi people is
the ultimate objective of Bash.

How those needs to be satisfied?

The aim of Bkash is to fulfill the basic banking needs utilizing mobile phones to the people who
are unable to use conventional Bank services for different reasons and constraints. Less than 15%
of Bangladeshis are connected to the formal banking system whereas over 68% have mobile
phones. Bkash provides financial services through mobile phones that can make the service more
accessible and cost effective for the vast population of Bangladesh.

Five Generic Business Level Strategies

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bKash is serving a broad market of mobile financial services using its capabilities to create value
for customers on an industry-wide basis. Among five generic business level strategies, bKash falls
under Integrated Cost Leadership/Differentiation where it is leading as a service differentiator
and cost leader in the market. This strategy’s competitive advantage is in between cost and
uniqueness and competitive scope is in-between broad target and narrower target which is a
safe position in business level strategy as shown on the above chart. The distinctive
competencies include superior brand recognition and ubiquitous agent network bKash
considering its core competencies along with its wide range of services, low cost structure and
open platform for innovations makes it the service differentiator as well as the cost leader in the
industry. To bKash low cost structure is the driving factor as it has a special focus to serve the
low-income people of the country with its widespread agent network and promote sustainable
micro-savings to achieve broader financial inclusion by providing financial services that are
convenient, affordable and reliable and thus creating value among its customers. Unlike bKash,
none of its immediate or impending competitors have been able to capture the broad market of
Mobile Financial Services even following the business strategies due to the lack of brand
recognition. However, bKash possesses the superior status of BRAC, a giant of the country.

Competitive Positioning and the Value Creation Frontier

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bKash being the integrated cost leader and differentiator occupies the middle segment of the
value creation frontier. In the very segment bKash has the highest customer responsiveness. With
the state of the art technology through a visa company, widespread agent network, low cost
structure, and mobile network coverage from 4 MNOs bKash has succeeded to attain the title of
leader exerting tough competition to the rivals. Thus the integrated strategy enables bKash to
reach a high profitability level and become an increasing threat to both differentiators and cost
leaders over time.

Product Life Cycle

The mobile banking industry is currently in the growth stage with huge potential for companies
to increase their sales and capture market shares. bKash being the early mover of mobile financial
industry, it has been able to hold its stand at the age of almost 3 years. In product life cycle, we
can see bKash is in the growth stage with an increasing rate of growing. Recently, bKash is acting
as a leader in the industry and it has succeeded to achieve the title with its extensive growth in
number of subscribers. In 2013, with 76,000 agents and 180 distributors bKash accounts stood at
close to 8.0 million across the country. However in 2014 bKash accounts is expecting to touch

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15.0 million at the end of the year by exploiting the huge business expansion opportunity in
Bangladesh over 110 million cell phone users, and 60 percent unbanked people out of 160 million
population. The performance of bKash is also depicted in a survey of percentage of market share
of mobile financing services in 2013 where bKash were able to capture 71% of the market share
in a two year gap.

bKash is Bangladesh’s first complete mobile financial service provider in the industry of mobile
banking and bKash introduces Mobile Banking Services in Bangladesh. Bkash paved the way for
the people living in rural areas to get introduced with money transfer services via mobile phones.
Therefore it can be stated that bkash followed “Diversification Strategy” as it introduced new
products which is mobile financial services, in the new market which is the Mobile Banking
Industry. Recently Bkash has signed various agreements with different universities, hospitals and
clothing brands so that the customers of this organizations can make their payments through

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Bkash. Moreover, BKash has launched 'Buy Airtime' service allowing the bKash wallet users to
top up mobile balance of Banglalink, Robi and Airtel numbers through bKash without the free of
any additional charges. Therefore Bkash is now pursuing “Product Development Strategies” as
the organization is trying to introduce new kinds of services in the existing market.

The BCG matrix is based on the Product Life Cycle Theory. The product of Bkash is in the growth
stage with huge potential for company to increase its sales and capture market shares. Less than
15% of Bangladeshis are connected to the formal banking system whereas more than 60% of the
total population has access to cell phones. So the financial services through mobile phone are
accessible to majority of the population. Moreover, people are more and more willing to conduct
their financial transaction through mobile banking. Bkash is not only limited to paving the way of
financial transaction for people of low income but also it is constructing new ways to introduce
more financial services. People can now pay their medical fees, tuition fees, shopping bills with
the help their Bkash accounts. Moreover, Bkash only had Grameenphone and RobiAxiata as their

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partners, now Banglalink and Airtel also stepped in. In addition to that the customers of these
mobile operators can recharge their balance with the help of Bkash. However, Bkash is now
reaching more and more customers by expanding in the form of increased number of ATM cash
outs and customer centers in various districts of Bangladesh. Therefore, Bkash can be identified
as “Stars” with high relative market share and high market growth rate.

Business level strategies helping to achieve Corporate level strategies

bKash follows an integrated cost leadership/differentiation strategy targeting a market in

between broad and narrow of mobile financial services. bKash is clear about its position in the
market and thus it seeks hard to establish its business level strategies in the most effective
manner in order to gain the ultimate corporate level strategies. The mission of bKash implies that
“by providing financial services that are convenient, affordable and reliable, bKash aims to widen
the net of financial inclusion. bKash wants to provide a solution for Mobile Financial Services,
built on a highly scalable Mobile Money platform, allowing the people of Bangladesh to safely
send and receive money via mobile devices.” To comply with the mission bKash has designed its
business level strategies being the cost leader as well as the differentiator in the industry. Thus
in order to solve the financial service crisis it has intervened into the market with wide range of
services to widen financial inclusion, ubiquitous network of agents for convenience and
accessibility, security of money to ensure safety of money transaction and utilization of
technology leading to innovation, low cost structure to build highly scalable mobile money
platform (free registration, low cash out charge, and free checking balance) and moreover, the
branding and status of the parent company to grow customer responsiveness. Taken as a whole
it can be said that bKash’s business level strategies are working as an assistance for the company
to achieve its corporate level strategies.

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4.3 Functional Level Strategy:

It is paramount that an organization must not only satisfy but delight their customers by providing
high quality products at affordable prices to be able to have a sustainable business. Bkash has
been doing just that which has made them the market leaders in mobile banking sector over the
last three years. A bKash mobile wallet is the customer's financial account, into which money can
be deposited and out of which money can be withdrawn or used for various services. Customers
are able to receive electronic money into their bKash accounts through salary, loan, domestic
remittance, and other disbursements and eventually cash-out the electronic money at any of
bKash's vast of agent network of 90 thousand retail points. According to CGAP, the World Bank
group that works on access to finance, by March 2014, 22% of Bangladesh's adults uses mobile
money and a significant part of such mobile money adopters use bKash.

One of the reasons for bKash's success is its focus on serving the poor. It was important to come
up with a simple interface that can be accessed by the cheapest (i.e. $15) handset. Smartphones
would make it easy to implement mobile money, but the service would then be limited to only
affluent customers and would defeat the purpose of reaching the unbanked and poor. bKash
opted for USSD that allowed anybody to access bKash platform by dialing an access code,
regardless of the sophistication of the handset Considering the size of the potential customer
base, bKash adopted a highly scalable electronic payment platform outsourced from VISA that
offers the global standard of financial data processing and security.

Divisions and Departments of Bkash

Management Division

Management division of bKash is comprised of 5 units-

Corporate Strategy and Decision making Wing

This unit of bKash is responsible for any corporate strategy and decision making. All the final end
decision is implemented after being approved by this management unit.

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Corporate Affairs

This unit deals with all the corporate communications needed for the company. They also keeps
the connection with higher levels of armed forces and government ministries to keep their
operation running.

Brand

This unit deals with the overall brand management and promotion activities of the company. The
unit covers both outdoor (billboard, road overhead etc.) media and indoor (print & electronic)
media.

Service development and Management

Service development and management unit concentrates on developing their service facilities.
At the same time they are responsible for managing the dealers and agent management.

Corporate Sales

Corporate sales is responsible for overall sales of bKash. They also determine and forecast the
over sales for bKash. They also assist the corporate strategy and decision making wings in decision
making through their forecasting.

Marketing Division

The marketing division of bkash has 3 primary divisions:

Product development team

In the product development team, their main objective is to find out new scopes and VAS to
improve the product. Beside this they are carrying out surveys to find out the market position of
Bkash. Surveys are also carried out following every event to find how successful they were
compared to the costs incurred. All the surveys are being carried both on and off the field and
the results are getting compiled and analyzed regularly. The product development team consists

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of one manager, one assistant manager and a few officers. The manager directly reports all their
findings to the marketing director.

Media Team

One of the most important teams in the marketing division for bkash is the media team. The main
objective of this team is to monitor the media, hold events and taking care of the sponsorship,
outdoor branding. Furthermore they are also responsible for giving work order to vendors and
clearing their bills in time after monitoring their work. The media team is divided into two parts:

 Outdoor &Out-of-Home (OoH) -The work of outdoor & OoH is to managing all the vendors
who are related with the outdoor branding. In addition of this monitoring the entire
outdoor branding element such as billboard, wall paint, boat branding. They also find out
the new scope of outdoor branding and planning for the future.
 Event management- In the event team they are constantly on the look-out for
opportunities to brand and sponsor lucrative events, such as: University Seminars,
participate in various fair. Special events are organized during Pohela-boishak, New Year,
Victory Day, Eid etc.

Creative Team

The creative team is involved in crucial and sophisticated work for the marketing division. Their
main purpose is to make designs that are to be used for promoting bkash through billboards,
posters, agent point posters and leaflets. Beside this they are also instruct vendors and agents
on the branding item color and design.

Marketing Strategies

bKash is trying hard to popularize their mobile banking services among the customers of rural
and urban areas with some innovative communication in retail stores, television commercials
and in billboards.

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 Design and execute all outdoor marketing activities like Billboards, Wall Paintings,
Posters, and Shop Fascia’s etc. after analyzing the potential target market and the
outcomes.
 Plan and supervision for all indoor and outdoor events like participation in Dhaka
International Trade Fair, Chittagong International Trade Fair, and E-Asia etc.
 Plan and execute all outdoor campaigns with the support from Sales and Distribution
channel
 Make yearly budget partially that properly synchronize with the whole marketing budget
and ensure proper utilization of the allocated approved budget.
 Maintaining strong liaison with other peer departments like Finance, Business
Development etc.

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4.4 Marketing Strategy and Mix

Marketing Strategy:

Marketing strategy is a logic by which business unit hopes to achieve the marketing objectives.
To be successful the company must do a better than competitors of satisfying target consumers.
Marketing strategy is the combination of product, price, place & promotion strategies. Marketing
strategies must be geared to the needs of the customers but also to the strategies of competitors.
Once the company has decided on its overall competitive marketing strategy, it is ready to begin
planning the details of marketing mix. The marketing mix is the set of controllable, tactical
marketing tools that the firm blend to produce the response it wants in the target market. The
marketing mix consists of everything the firm can do influence the demand for its product. The
many possibilities can be collected into four groups of variables known as the 4p’s: product, price,
place& promotion. In a competitive market where business have easy access & profits are worth
while pursuing, the market will be lively & active.

Market Segmentation:

bKash segments its customers according to I) Similarity in needs and II) Response to similar
marketing program. bKash follows a mass marketing segmentation where the company follows
an undifferentiated marketing program. It also segments its markets demographically where it
focuses on occupation, income. Students, business entrepreneurs, high and low level job holders,
all types of service holders are the demographically segmented customers for bKash. People from
social economic class A, B, C, D and E are also the segmented customers for bKash. Social class
and VALS (Values and Lifestyles) are the psychographic segmentation for the company. High,
middle and low social class people and people with different attitudes and lifestyles who are
looking for value against their payments for particular services are the customers of bKash. bKash
also follows behavioral segmentation. Depending on the usage rate it has segmented its market
into 3 groups- High Medium and Low. The company also divided its market according to user
status as Non user, Potential user, Ex-user, First time user and Regular user. bKash has segmented

27
its customers according to the benefit segmentation. bKash provides money transfer benefits to
its customers. Anyone who are seeking for money transfer benefits are the prime customers of
bKash.

Distribution Channels:

bKash possesses channel partners in order to cater its services to customers. The partner
channels are indirect which comprises agents, mobile network partners, customer centers,
schools and universities, shopping places, travel agencies, restaurants, NGOs and other different
media. bKash has also signed agreements with different organizations to facilitate salary
disbursement through bKash. In respect to build awareness about the service, bKash has
implemented its innovative marketing strategy in an extensive manner which is proven as a
fruitful step in the mobile banking industry indeed. However, 80,000 agents and 6 customer
centers of bKash along with 3 other distributors act as supporting partners in delivering the
service to the customers and providing post-purchase customer service respectively. Moreover,
mobile network operators are responsible for serving the superior connectivity between mobile
users and bKash and also allowing bKash to execute its new service of buying mobile Airtime
through bKash wallet as a method of serving its customers.

Marketing Mix:

The marketing mix refers to the set of actions, or tactics, that a company uses to promote its
brand or product in the market. The 4Ps make up a typical marketing mix - Price, Product,
Promotion and Place. Here are the 4Ps of bKash:

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Product:

bKash, is a subsidiary of Brac Bank, provides safe, convenient and easy ways to make payments
and money transfer services via mobile phones to both the unbanked and the banked people of
Bangladesh. bKash mobile wallet is customer’s financial account, into which money can be
deposited and out of which money can be withdrawn or used for various services. Customer are
able to receive electronic money into their bKash accounts through salary, loan, domestic
remittance and other disbursements and eventually cash-out the electronic money at any of
bKash’s vast of agent network of 90000 retail points. Services provided by bKash:

- Opening account
- Cash-In
- Transfer/sending money
- Cash-Out(agent and ATM)
- Payment to merchant
- Buying Airtime
- International Remittance
- Interest on savings
- Salary disbursements by companies to employees.

Place:

bKash has over 80000 agents across the country ready to deliver their services to anyone that
wants to make use of bKash services. Furthermore, they have a help line to help their customers
with any queries or difficulties they may be facing. bKash customer care centers can be located
in Dhaka, Mymensingh, Sylhet, Chittagong, Khulna and Bogra.

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Price:

Promotion:

Unique branding and advertising strategy is one of the key factors of bKash’s early leadership and
success in M-Banking industry. The marketing team is continuously working to come up with
innovative advertising and promotional ideas. Hence, they are dominating the market in terms
of customer base as well as the market share.

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 Chapter 5
Conclusion

bKash has established itself as an early market leader of Mobile Financial Service or m-Banking
Industry by creating stronger brand value and implementing share building strategy at embryonic
stage of the industry. As the industry continued to grow, bKash continuously expanded its
operation and range of service. Marketing department and the Creative Teams have been playing
key strategic roles to place bKash at gaining competitive position and to differentiate from its
competitors. However, the industry has the characteristics of Oligopoly Market and the
competition will intensify in near future. So, bKash’s differentiation strategies may not be feasible
for a very long time. bKash should focus on cost minimization and adopt cost leadership strategy
to survive in the market. Even though current strategic decisions have rewarded the company
with early leadership, but strategies must be improved and redesigned to persist as a market
leader. Rapid growth of the industry and increasing number of competitors are driving the need
for functional level, business level and corporate level strategic decisions. bKash should
reevaluate and improve functional, business and corporate level strategies to prepare itself for
more intense competition. Implementation of following functional, business and corporate level
strategic recommendations should help the company to protect its position in the market.

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 Chapter 6
Recommendations

Corporate Level Strategies:-

Tapper integration: bKash can open bKash centers in every area where it operates. In this center
people can come and enjoy the regular bKash services. They can also get all kinds of help
regarding bKash (e.g. Opening a bKash account). This center will also be a solution for the safety
of the agents. Agents don’t need to keep the money from bKash to themselves if these centers
are available. These centers will be heavily guarded and agents can come and take money
whenever they need it. In this way, agents do not need to travel far to bring and give back the
money and the risk is lesser in terms of safety. It will also be a solution to cash unavailability.

Strategic Alliance: We have discussed to need of distinctive strategic alliances that bKash can
pursue to differentiate itself from the competitors. Strategic Alliance with Google, Microsoft
Corporation, Micro-Finance Institutes will open more opportunities for bKash. Strategic Alliance
is a long process and bKash must take the advantages before its competitors do. So, they must
negotiate with the relevant companies as soon as possible.

Product development:

I. Online Payment System Development: E-business is emerging in Bangladesh and bKash must
capitalize this opportunity by facilitating online payment service. The service requires a new
payment system development which is possible with current technology (Visa). Initially it can
start with strategic alliance with Google Play Store, Apple App Store and other online software
sellers. With the experience curve and learning effect bKash will be leading online payment
system developer in Bangladesh. New system and infrastructure cannot be built overnight, so
bKash must take corporate level initiative to start developing system and infrastructure for online
payment.

II. Micro-DPS & Micro-Pension: Bkash can expand the services they have to offer by introducing
new services such as micro-pensions and micro-dps, in conjecture with Brac Bank. This would
enable any registered bkash user to make their routine payments required by pension schemes

32
and dps through their mobiles, saving them the hassle of physically going to designated banks to
deposit the money. Furthermore upon maturity the user can receive their payments directly to
their bkash wallets, making it a much safer method of receiving their money.

III. Relaxing Transaction Limit: Transaction limits have been preventing many SME businesses to
use bKash service. bKash should come with new products specially designed to meet SME
transaction needs that would offer relaxed transaction limit for those SME customers.

IV. Currently bKash fund transfer does not refer who is sending the money if the money is sent
through agent. bKash should modify its system to enable receiver to identify the sender. In this
case, the sms the money receiver should contain the name of the money sender.

Business Level Strategies:-

Cost Leadership: In the long run bKash needs to focus more on becoming the cost leader among
the companies in the industry. As plenty of competitors are coming in, the differentiated strategy
of bKash will surely be imitated. And though continuous innovation should also be a priority;
reducing the cost and charging less prices for their services will be the key to sustainability.
Because consumers will move to the competitors as they are also starting to offer the same
services as bKash. Moreover, m-banking industry is Oligopoly in nature where scope of
differentiation is limited. Therefore, shifting the business model to lower cost structure should
be implemented. In banking industry most of the costs are fixed and there is a substantial cost
associated with employees. So, bkash should put a significant amount of effort to identify
unproductive employees to reduce the cost through implementation of strict controlling and
performance evaluation systems. bKash must get rid of unnecessary and unproductive
employees to lower its cost. Moreover, bKash should offer better compensation packages to
attract more productive employees to continue its operation with higher efficiency and lower
cost.

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Functional Level Strategy:-

Cash Management System: Sometimes unavailability of cash is creating dissatisfaction among

customers and it has a severe chain effect on profitability. bKash should adopt a de-centralized
cash management system. There should be 10-12 cash management units covering all the
country and connected with each other through IT network. Each unit will estimate and forecast
daily cash need for their assigned geographic location and facilitate cash from assigned banks.
Cash management units can use Miller and Orr Uncertainty Model to forecast daily cash need.
By doing this bKash cash management units can avoid access cash or unavailability of cash for
their assigned geographic location and facilitate cash from assigned banks.

System Improvement: In many cases bKash customers cannot avail the service due to system
failure when the face massive quantity of transactions at one time, such as last day of payment
of fees for admission tests for schools. bKash must maintain its system in such a way that it never
fails. bKash can hire mobile financial service system experts and consultants to maintain the IT
system with minimum failure. IT is the core element of the service and they should put maximum
effort to minimize the failure.

Strengthening External Security: Recently bKash agents are victims of theft, and robbery. Hence,
bKash is losing cash on unexpected incidents. bKash should negotiate with Insurance Companies
to limit the loss. A portion of agents’ commission should contribute the premiums of insurance
since; agents are also partially responsible for such circumstances.

Educating Rural Customers on Bkash through Mobile Retailers: Studies found that rural
customers are willing to use bKash service but lack of knowledge and education has been
hindering their ways. bKash should provide some incentive to mobile phone retailers in rural
areas who will educate people and encourage them to use bKash service, upon purchase of new
mobile phones from their stores.

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