D.Comm. / Strategic management is a concept that is interpreted in many different ways in business. Banks have all subscribed to the process, but to various levels of application. In a highly competitive market and with the ever changing needs of customers, top management of banks have to utilise all resources optimally through their strategic management processes. What has made the task of banks more complex and difficult is that they have to take risk into account, more particularly interest rate risk. The risk concept has to be integrated into a bank's activities to form an integral part of the strategic management process. How to practically deal with the strategic management process of a bank by taking risk into account, was dealt with. An insight was given into the important role that risk focused strategic management can play in a bank to gain a competitive advantage. The study was limited to the four major bank players within the banks and financial services industry in South Africa, being ABSA, FNB, Nedcor and SBIC. Risk management has had many shifts in focus during modern day banking. On the threshold of the twenty-first century the banking and financial services industry is faced with even greater challenges than before. The industry is in an ever larger global arena which is very competitive and highly regulated. Many large non-bank competitors, that are well equipped with similar products and services, are entering this market. They have low barriers to entry as they have real advantages in that they have substantially less capital requirements and fewer regulatory constraints than those of the banking industry. A risk-based strategic business model was devised and developed by following a top-down approach to a firm. Models and theories were incorporated in this process. An organisation was broken down into activities, inherent risks identified, the levels of risk determined through the assessment of risk factors and elements, with the extent of control being determined. After having conceptually modelled the risk-based SBM, it was put to practice, more specifically for a bank. The risk-based strategic management model was then applied to a bank's strategic management process. The four different phases of the strategic management process, namely strategic information gathering, planning with formulation, implementation and control, were all dealt with. It was ascertained through interviews that all four of the major local banks had subscribed to strategic management, but applied it with different intensities. Strategic management, however, was still in an infant or start-up phase within the banking industry. In conclusion, the assessment of a bank's internal situation, by taking risk into account, will provide it with an objective view on its own capabilities. A competitive edge over its rivals can be obtained by taking calculated business risks and outcontrolling rivals.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:uj/uj:10021 |
| Date | 11 September 2012 |
| Creators | Roux, Pieter Alexander |
| Source Sets | South African National ETD Portal |
| Detected Language | English |
| Type | Thesis |
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