Rmb Private Bank

1. Introduction 2

2. Problem Stated 3

3. Company Background 3

Company History 3

RMB Private Banks Philosophy 4

4. Environmental Analysis 4

4.1 Pest Analysis 4

Political environment 4

Economic 5

Global Economic Forecast 5

Emerging Market and Developing Economies 6

Recent National Economic conditions 6

Significance to private banking 6

Social 7

Legal 8

Technological 8

4.2 Porters 5 Forces 9

Competative pressures associated with the threat of new entrants into the market 9

Competative pressures associated with the jockeying among rival sellers 10

Competative pressures coming from the attempts of companies in other industries to win buyers to their own substitute products 11

Competative pressures stemming from supplier bargaining power and supplier seller collaboration 11

Competative pressures stemming from buyer bargaining power and seller-buyer collaboration 12

4.3 SWOT Analysis 13

5. Critical Review of RMB PB Strategic Management Process 13

5.1 RMB PB strategic success according Porter's generic strategies 14

5.2 Success according to the resource based (inside out) approach 14

6. RMB PB's Sustainable Competitive Advantage 15

7. Final Recommendations 19

Recommendations based on Porters Generic Strategies 19

Recommendations according to the Resource Based Approach 19

8. Bibliography 20

1. Introduction

The word strategy finds it origins in Greek history. When defining the term strategy dictionaries will in general state something along the lines of strategy being the science and art of using all the forces of a nation to execute approved plans as effectively as possible during peace or war. It will continue stating that strategy is the science and art of military command as applied to the overall planning and conduct of large-scale combat operations. Through these definitions it becomes clear that strategy refers to an advantage one entity tries to gain over another by any means possible.

When applying the term strategy to business one is likely to find it defined as: the process of specifying an organization's objectives, developing policies and plans to achieve these objectives, and allocating resources to implement the policies and plans to achieve the organization's objectives. It is the highest level of managerial activity, usually performed by an organization's Chief Executive Officer (CEO) and executive team. Strategic management provides overall direction to the enterprise. (Wikipedia -http://en.wikipedia.org/wiki/Strategy - 14- May-2007).

The strategic management process is defined as: The overall purpose of the experimental strategic learning and management process is to establish which strategic options or elements thereof are robust across the scenarios and use the most healthy elements to develop your strategic intent - your core strategic focus or theme. (Strategic Management - http://www.1000ventures.com/business_guide/mgmt_strategic.html - 15 -May2007)

The company selected as the subject for this assignment is RMB Private Bank (herein after referred to as RMB PB). This study will give a brief description of RMB PB's background and mission.

To get a clear understand of where RMB PB positioned themselves in the market a situation analysis will be done. The models used for the situation analysis are:

 PEST analysis

 Porters 5 forces

 SWOT analysis.

These three models are used, as there is sufficient reference in these models to understand RMB PB's macro and microenvironment.

It is important to mention that although these analyses are conducted they are purely to identify strategic drivers in the environment that create the need for the organization to adapt to.

A critical review is done to prove the effectiveness of RMB PB past, current and future strategy in the evolving South African and global environment. Specific focus points will be on the alignment of RMB PB strategy with what is happening in the banking industry in South Africa and if they are playing to their strengths to achieve their objectives.

2. Problem Stated

The assignment given was to undertake a critical review of the strategic management process of a chosen organisation and evaluate its effectiveness. Comments on how the organisation has changed over the recent past, what the factors where that led to the change and what the result was of the changes in the strategy, needs to be provided. A look into the short-term future along with an evaluation of the organisations staying power to maintain its competitive advantage needs to be done.

3. Company Background

Company History

RMB Private Bank was born through the merging of two niched banking divisions within the FirstRand Group , namely Origin and Ansbacher (South Africa). Origin came out of the Rand Merchant Bank stable six years ago and was renowned for its structuring capability, merchant banking know-how and pioneering "one account" concept, which combined a client's current account with his loan facility. Ansbacher, a specialist in wealth-management, was one of the leading private banks in the market. Together, they provided the foundation for RMB Private Bank, a powerful private-banking entity operating with merchant banking flair.

(RMB PB - https://www.rmbprivatebank.com/content/about/history.pdf - 07-Ma -2007)

RMB