Competitive Intelligence in MKB Unionbank Practice and strategic implications

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Competitive Intelligence in MKB
UnionbankPractice and strategic implications
November 25, 2008
Yavor Dimov, MBA Head of Strategic Development
Department MKB Unionbank, Bulgaria
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• CONTENTS

• CI in MKB Unionbank Objectives and Principles
• The CI Process in MKB Unionbank
• Key Users of CI Information
• Sources of CI Applied by the Bank
• Examples of CI in the Bank
• Lessons Learned In Establishing a Systematic CI
  Approach

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CI in MKB Unionbank Objectives and Principles
The main objective of Competitive Intelligence
(CI) in MKB Unionbank is to provide the Bank Top
Management with timely and comprehensive info for
making successful strategic decisions

• Collect information
• effectively, systematically, economically
• Analyze it
• appropriately for given contexts, purposes
• Disseminate it
• to defined users through effective
  presentations channels
• Use it
• to make informed strategic and policy DECISIONS

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The CI Process is Driven by the Strategic
Development Department
BG bank system
deliverables
Monthly reports
Strategic Development Dept.
Research, data collection, processing
Main trends Strategies Growth rates Market
shares Benchmarking Key Competitors Advertising
actions Ratios fin. analysis
Quarterly reports
Annual competition analysis
guidelines supporting info
Marketing Communications Dept.
Bank sector forecasts
Ad hoc analyses
Business units (Retail, Corporate)
Products Pricing Promotions
research
Decisions on product sales policy
Market analyses
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The Bank Top Management Are the Key Users of CI
Information and Analyses

• Strategic oversight
• Strategic direction

• Strategies definition / SWOT / competition
• Decisions on business plan, targets
• Performance evaluation

• Benchmarking against competition
• Market trends
• Forecasts

• Bank market overview
• Sectoral analyses

• Internal communication for goals and achievements

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Financial Sector Specifics Are Beneficial to CI
Professionals

• Financial institutions obliged to provide regular
  monthly reporting to BNB
• Public banks and ones owned by foreign bank
  groups are even more open than required

• Unified reporting standards allow easily making
  comparisons among competitors
• High quality of BNB data (100 also in English)
  one of the most complete and regular in Eastern
  Europe

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CI Sources Are Mostly Public But Unofficial Info
Still Remains Important

• Around 70 of all the information used
• BNB, banks annual reports, web sites,
  publications and campaigns

• Around 20 - foreign and local paid research and
  publications, business information companies like
  ISI Emerging Markets

• Personal contacts, customers, other channels
• Smaller share of around 10 but remains vital for
  making reality checks and learning specifics

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Example 1 of CI Applied by the Bank

• At the end of Q2 2008 MKB Unionbank ranks no. 14
  in terms of asset market share in the Bulgarian
  banking system. Compared to Q2 2007, the bank has
  moved up by four places (from no. 18)
• MKB Unionbank registered the highest increase in
  market share in corporate loans, which grew by
  0.62 b.p. for one year to 2.57 in July 2008. The
  Banks growth rate is two times higher than the
  market (102 vs. 53)
• The market share in household loans also
  increased by 0.44 b.p. for one year to 1.18 in
  July. The Banks growth rate in this segment is
  139 compared to 50.5 average for the market
• The market share in corporate deposits slightly
  decreased to 2.22, compared to 2.34 a year ago.
  The yearly growth rate is 16, which is below the
  average market growth of 22
• The market share in household deposits increased
  by 0.06 b.p. for one year to 1.20. The yearly
  growth rate in this segment is 35, which is
  above the average market growth of 28

Comparison between banks by size of assets
Sample
Sample
Calculating MKB Unionbanks market shares
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Example 2 of CI Applied by the Bank
Comparison between banks by banking groups and
growth rates

• Group 1 Raiffeisenbank and United Bulgarian
  Bank have one of the highest and most stable
  growth rates in the group for a period of one
  year. Difficulties of the merger process in
  Unicredit Bulbank led to a loss of market share
  in assets and loans. Former Post Bank and DZI
  Bank merged in late 2007 into Eurobank EFG
  becoming no.5 in terms of assets
• Group 2 FIB and Piraeus continue to pursue
  strong growth. EIBank is expected to accelerate
  after its purchase by the Belgian group KBC at
  the end of 2007. Municipal Bank, Investbank and
  Procredit Bank are closest in assets and
  strategy to MKB Unionbank. International Asset
  Bank should also be monitored as potential
  competitor, considering its strategy for organic
  growth. By the end of the year Emporiki will
  probably move closer to this group, as its French
  owner Credit Agricole announced plans for further
  expansion in the country and the Balkan region
• Group 3 Alfa bank continues its expansion in
  all market segments, as it turned to be the
  fastest developing bank in 2007

Sample
Sample
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Example 3 of CI Applied by the Bank
Sample
Bubble charts presenting asset size, market share
and growth rate per banks
Enlarged area
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Lessons Learned In Establishing a Systematic CI
Approach

• One owner of the CI function needed
• Design and format important almost as much as
  data and contents
• Public data abundance beneficial but not
  sufficient the key is to extract the most
  valuable for the Management , own sources are
  still important
• Correct identification of key internal users
  defines how successfully CI is applied
• Internal CI communication to all other employees
  is very helpful to other managerial initiatives

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Thank you for your attention!