Entry Level Banking in Sa
Entry Level Banking In SA
1. Introduction
Organisations today operate in a dynamic environment characterized by instability and change (Bakhru, 5:2005). The operating environment is broken down into the internal and external environment with both environments playing a significant role in developing strategy. Segal-Horn and Boojihawan proposes that strategy development is an iterative process and may be defined as the pattern of activities followed by an organisation in pursuit of its long term objectives. Hence to enable this method of approaching strategy development, the internal and external environment needs to be scanned constantly so that strategy can be adjusted to meet the business objectives.
The banking sector in South Africa has been subject to much change and uncertainty in the last decade. It has seen government regulations and investigations into lending practices, banking fees and policies to create a banking platform for the vast majority of the un-banked South African population. Capitec bank is a relatively small independent bank with roots in the micro lending sector. Capitec Banks strategic plan in 2007 focused on positioning itself as a proper bank in a much broader target market which is a change from its prior strategic focus as a micro lending organisation. Figure 1 shows the components of the external and external environment in relation to Capitec Bank.
External Enviroment
Internal Environment * Employees * Owners/shareholders
Government
* Changing Banking Regulations
Competitors * African Bank * Mzanzi Product offering by major banks * Post Bank * Selected products from major banks (Standard Bank’s E Plan) * Retailers offering low cost banking
Customers * LSM 1-5 * 19 Million target market size
Figure 1: Capitec Banks Internal and External environments.
This report is focused on the lower-end banking segment in South Africa and will endeavor to provide an analysis
1. Introduction
Organisations today operate in a dynamic environment characterized by instability and change (Bakhru, 5:2005). The operating environment is broken down into the internal and external environment with both environments playing a significant role in developing strategy. Segal-Horn and Boojihawan proposes that strategy development is an iterative process and may be defined as the pattern of activities followed by an organisation in pursuit of its long term objectives. Hence to enable this method of approaching strategy development, the internal and external environment needs to be scanned constantly so that strategy can be adjusted to meet the business objectives.
The banking sector in South Africa has been subject to much change and uncertainty in the last decade. It has seen government regulations and investigations into lending practices, banking fees and policies to create a banking platform for the vast majority of the un-banked South African population. Capitec bank is a relatively small independent bank with roots in the micro lending sector. Capitec Banks strategic plan in 2007 focused on positioning itself as a proper bank in a much broader target market which is a change from its prior strategic focus as a micro lending organisation. Figure 1 shows the components of the external and external environment in relation to Capitec Bank.
External Enviroment
Internal Environment * Employees * Owners/shareholders
Government
* Changing Banking Regulations
Competitors * African Bank * Mzanzi Product offering by major banks * Post Bank * Selected products from major banks (Standard Bank’s E Plan) * Retailers offering low cost banking
Customers * LSM 1-5 * 19 Million target market size
Figure 1: Capitec Banks Internal and External environments.
This report is focused on the lower-end banking segment in South Africa and will endeavor to provide an analysis
References: 6.3. Bakhru. A, 2005. Analysing the external market. Unit 2, Study guide for MBA B820. Milton –Keynes: Open University. 6.4. Mercer. D, Margolis. J, 2007. Improving performance Block 3, session 8, study guide for MBA 713. Milton –Keynes: Open University. 6.5. Townsend. S, Mosala. T, 2006. Capitec Bank: Low –cost banking for Joe Average. Graduate School of Business Administration: University of Witwatersrand.