1. Introduction

This report covers a detailed analysis of the operations strategy of Sampath Bank PLC

with the view to identify how operations strategy is exercised by the bank and to find

out the contribution of operations strategy towards the success of it. The report covers

sections starting from introduction and ending up with of concluding remarks.

2. Operations Management and its importance

Operations are the part of a business organization that is responsible for producing

goods and/or services. Goods are physical items and services are activities that provide

some combination of time, location, form or psychological value. Operations are what

must be done internally in order to deliver to the customers whether in goods or

services. Thus, from an organizational perspective, operations management may be

defined as the management of the conversion process that transforms inputs such as raw

material and labor into outputs in the form of finished goods and services.

Operations management is recognized today as a critical functional area within every

organization. No longer is operations management considered to be subservient to the

finance and marketing areas; instead, it is now treated as an equal. Firms that fail to

recognize the significant contribution of the operations management function will lose

profits and market share of the firm will also tend to decline. The once reactive role of

operations management, which concentrated solely on minimizing costs has been

replaced by a more proactive position of maximizing the value added to the goods and

services that the organization provides.

Businesses are operating in a highly competitive environment. Some of the major issues

facing operations management executives today in this turbulent environment include;

achieving and sustaining high quality while controlling costs, integrating new

technologies and control systems into existing processes, working effectively with other

functions of the business (marketing, finance, human resources) to accomplish the goals

of the firm, working effectively with suppliers and being user-friendly for customers.

All of these issues are inter-related. The key to success is for operations management to

do all of these at a level that is competitive in both global and domestic markets.

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3. Operations Strategy - An Overview

3.1 What is Operations Strategy?

Operations strategy is the development of a long-term plan for using the major

resources of a firm for a high degree of compatibility between the resources and the

firm’s long-term business strategy. The role of operations strategy is to provide a plan

for the operations function so as to make the best use of its resources. Operations

strategies are developed from the competitive priorities of an organization, which

include low cost, high quality, fast delivery, flexibility and service.

3.2 The Relationship between Operations and Strategy

All business organizations are concerned with how they will survive and prosper in the

future. A business strategy is often thought of as a plan or set of intentions that will set

the long-term direction of the actions that are needed to ensure future organizational

success. However, no matter how grand the plan, or how noble the intention, an

organization’s strategy can only become a meaningful reality in practice if it is

operationally enacted. An organization’s operations are strategically important precisely

because most organizational activity comprises the day-to-day activities within the

operations function. The relationship between an organization’s strategy and its

operations is a key determinant of its ability to achieve long term success or even

survival. Organizational success is only likely to result if short term operations activities

are consistent with long term strategic intentions and make a contribution to competitive

advantage.

The relationship between operations and the other business functions is similarly

important. The objective of the operations function is to produce the goods and services

required by customers whilst managing resources as efficiently as possible. This can

lead to conflicts within an organization. Conflicts between the operations and the

marketing functions are likely to centre on the desire of marketing to ensure that

operations concentrate on satisfying customers. Whilst this may seem desirable,

marketing will usually want operations to be able to meet customer needs under any

circumstances. This is likely to lead to demands to produce greater volumes, more

variety, higher quality, a faster response and so on, all of which are likely to lead to less

efficient operations. Conflicts between the operations and the accounting and finance

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functions, on the other hand, are likely to centre on the desire of accounting and finance

to want operations to manage resources as efficiently as possible. This will tend to pull

operations in exactly the opposite direction of that desired by marketing. Conflicts

between operations and the human resource management function are likely to centre

on issues of recruitment, selection, training, management and the reward of those

employed within operations. For example, operations managers may want to vary

organization wide policies in order to meet local needs; a move likely to be resisted by

human resource managers. The operations function lies at the heart of any organization

and interacts with all the other functions. As such, achieving agreement about what

decision areas lie within the remit of operations and what should be the basis of

decision making within operations is an essential part of ensuring the consistency of

action over time necessary for a successful organizational strategy.

3.3 Operations Strategy Process

A company’s business strategy is developed after its managers have considered many

factors and made some strategic decisions. These include developing an understanding

of what business the company is in (company’s mission), environmental scanning, and

identifying the company’s strengths (core competencies). These three factors are critical

to the development of the company’s business strategy. It can be further explained with

the help of following diagram.

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Figure 1: The Operations Strategy Process

As you can see from the diagram that mission, environment and core competencies play

a crucial role in the strategy formulation of a business.

The first decision a company needs to make is to identify its mission. Mission is a

statement defining what business an organization is in, who its customers are and how

its core beliefs shape its business. Identifying the mission is a very important part of

developing a business strategy. The mission basically defines the company. If a

company doesn’t have a well defined mission it may pursue business opportunities

about which it has no real knowledge or that are in conflict with its current pursuits, or

it may miss opportunities altogether.

The second factor that must be considered when developing a business is the external

environment in which the business is operating. This environment includes trends in the

market, economic, political environment and in society. These trends must be analyzed

to determine business opportunities and threats. This process of monitoring the external

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Mission

Business StrategyEnvironmental Scanning

Core Competencies

Competitive Priorities

Order qualifiers & winners

Operations strategy decisions.

(Structure, infrastructure)

Strategies of other functions

Linked

environment is called environmental scanning. To remain competitive, firms have to

continuously monitor their environment and be prepared to change their business

strategy in light of environmental changes. Environmental scanning allows a company

to identify opportunities and threats. Through environmental scanning an organization

can easily get to know the gaps in what customers need and what competitors are doing

to meet those needs. A study of these gaps could reveal an opportunity for the company

and based on which the company can design a plan to take advantage of it.

The external business environment is always changing. To stay ahead of the

competition, a company must constantly look out for trends or changing patterns in the

environment. Changes in the technology, such as point-of-scale scanners, automation,

computer-assisted processing, electronic purchasing and electronic tracking are the clear

examples for the recent trends that take place in the market place. One rapidly growing

trend is e-commerce. All these factors changed the way the services being provided by

the companies.

In addition to market trends, environmental scanning looks at economic, political and

social trends that can affect the business. Economic trends include recession, interest

rates, inflation and general economic conditions. Suppose that a company is considering

obtaining a loan in order to purchase a new facility. Environmental scanning could

show that interest rates are particularly favorable and that this may be a good time to go

ahead with the purchase.

Political trends include changes in the political climate-local, national and international

that could affect a company. There has been a change in how companies view their

environment-a shift from a national to a global perspective. Companies seek customers

and suppliers all over the globe. Many have changed their strategies in order to take

advantage of global opportunities, such as forming partnerships with international firms

called strategic alliances. For example, companies like Motorola and Xerox want to take

advantage of opportunities in China and developing strategic alliances to help them

break into that market.

Finally, social trends are changes in society that can have an impact on a business. An

example is the awareness of the dangers of smoking, which has made smoking less

socially acceptable. This trend has had a huge impact on companies in the tobacco

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industry. In order to survive, many of these companies have changed their strategy to

focus on customers overseas where smoking is still socially acceptable or have

diversified into other product lines.

The third factor that helps define a business strategy is an understanding of the

company’s strengths known as core competencies. In order to formulate a long term

plan, the company’s managers must know the competencies of their organization. Core

competencies could include special skills of workers, such as expertise in providing

customized services or knowledge of information technology. Another example might

be flexible facilities that can handle the production of a wide array of products. To be

successful, a company must compete in markets where its core competencies will help it

win. Highly successful companies develop a nosiness strategy that takes advantage of

their core competencies or strengths.

All these factors namely vision, environmental scanning and core competencies help the

formulation of the business strategy. The following diagram shows the snapshot view of

the contribution of these three factors towards the creation of business strategy.

Figure 2: Three inputs towards the development of a Business Strategy

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Environmental Scanning

(Monitoring the business environment

for market trends, threats and

opportunities)

Mission

(Statement that defines what is the

business; who are the clients and how values define

business)

Core competencies

(Unique strengths that can help a firm to win

the market)

Business Strategy

As you can see from the figure 2, which shows a dynamic, ongoing process that is

constantly allowed to change. As environmental scanning reveals changes in the

external environment the company may need to change its business strategy to remain

competitive while taking advantage of its core competencies and staying within its

mission.

Once a business strategy has been developed, an operations strategy must be

formulated. This will provide a plan for design and management of the operations

function in ways that support the business strategy. The operations strategy relates the

business strategy to the operations function. It focuses on specific capabilities of the

operation that give the company a competitive edge. These capabilities are called

competitive priorities. Competitive priorities are capabilities that the operations function

can develop in order to give a company a competitive advantage in its market. By

excelling in one of these capabilities a company can become a winner in its market.

Skinner and others initially identified four basic competitive priorities. These were cost,

quality, delivery and flexibility. These four priorities translate directly into

characteristics that are used to describe various processes by which a company can add

value to the products and services it provides. There now exists a fifth competitive

priority known as service and it was the primary way in which companies began to

differentiate themselves.

To help decide which competitive priorities to focus on a firm should be able to

distinguish between order winners and order qualifiers. Order qualifiers are competitive

priorities that must be met for a company to qualify as a competitor in the market place.

Order winners on the other hand are the competitive priorities that help a firm to win

orders in the market. Knowing the order winners and order qualifiers in a particular

market is critical to focusing on the right competitive priorities.

As soon as the competitive priorities have been identified, a plan is developed to

support these priorities. The operations strategy will specify the design and use of the

organization’s resources; that is, it will set forth specific operations requirements. These

can be broken down into two categories namely structure and infrastructure. Operations

decision related to the design of the production process such as characteristics of

facilities used, selection of appropriate technology and the flow of goods and services

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through the facility are coming under the category of the structure. Operations decisions

related to the planning and control systems of the operations such as the organization of

the operations function, the skills and pay of workers and quality control approaches are

coming under the category infrastructure.

Together the structure and infrastructure of the production process determine the nature

of a company’s operations function. The structure and infrastructure of the production

process must be aligned to enable the company to pursue its long term plan. This what

the way an operations strategy is developed. A sound business strategy coupled with of

supporting operations strategy will make an organization more competitive in the

market place.

4. Trends affecting Operations Strategy decisions

Operations management is continuously changing to meet the new and exciting

challenges of today’s business world. Two major trends that have significantly impacted

the role of operations strategy within an organization are an increasing trend towards

globalization of business and advances in technology especially information

technology.

4.1 Globalization

The world is quickly becoming a global village, caused in large part by technology. As

a result, competition in most industries has intensified significantly in recent years and

this trend towards hyper competition is expected to continue. Because of globalization

markets once dominated by local or national companies are now vulnerable to

competition from literally all corners of the world. At the same time globalization

provides new opportunities for companies in the form of new previously untapped

markets for their products as well as new sources for raw material and components at

significantly lower costs.

As a result of globalization of business, managers must extend their vision beyond their

own national boarders while developing operations strategies. When companies expand

their business beyond the territorial boundaries the operations management function

take a broader, more global perspective for companies to remain competitive. To

survive and prosper in such a global market place companies must excel in more than

one competitive dimensions.

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4.2 Advances in Technology

Advances in technology in recent years have had a significant impact on the operations

management function. The increased use of information technology, automation and

robotics has permitted firms to improve the quality of the goods that are being provided.

According to Stan Davis and Chris Meyer three factors that are significantly affecting

the way the business is being conducted namely connectivity, speed and intangibility.

They suggest that the combination of all three is causing changes to occur in the

business.

All three factors are directly related to advances in technology. Connectivity refers to

the fact that virtually everyone is now connected electronically, be it through e-mail,

internet, telephone or fax. At the same time firms with these connected networks in

many cases provide services that are now available twenty four hours. As a result of this

connectivity information is transmitted in a matter of seconds or minutes, instead of

hours or days which was the previous norm. The combination of connectivity and speed

suggests that firms are now focusing on the intangible aspects of their business to gain

competitive advantage in the market place which translates into providing better and

more innovative services.

Technology has also dramatically affected one of the basic concepts in operations

strategy that of making trade-offs between priorities. With advances in technology

managers no longer have to make pure trade-offs between competitive priorities as they

once did. Instead, today’s technology allows firms to compete on several priorities

simultaneously resulting in shifts to superior performance curves.

5. Competitive Dimensions as a Source for Competitive Advantage

The key to developing an effective operations strategy lies in understanding how to

create or add value for customers. Specifically, value is added through the competitive

priority or priorities that are selected to support a given strategy. Skinner and others

initially identified four basic competitive priorities namely cost, quality, delivery and

flexibility. These four priorities translate directly into characteristics that are used to

describe various processes by which a company can add value to the products it

provides.

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5.1 Cost

Competing based on cost means offering a product at a low price relative to the prices

of competing products. Within every industry, there is usually a segment of the market

that buys strictly on the basis of low cost. To successfully compete in this niche, a firm

must necessarily be the low cost producer. Products sold strictly on the basis of cost are

typically commodity-like. In other words, customers cannot easily distinguish the

products made by one firm from those of another. As a result customers use cost as the

primary determinant in making a purchase.

To develop this competitive priority the operations function must focus primarily on

cutting costs in the system, such as costs of labor, materials and facilities. Companies

that compete based on cost must study their operations system carefully to eliminate all

waste. They should offer extra training to employees to maximize their productivity and

minimize scrap. Generally, companies that compete based on cost offer a narrow range

of products and product features allow for little customization and have an operations

process that is designed to be as efficient as possible.

5.2 Quality

Many companies claim that quality is their top priority and many customers say that

they look for quality in the products they buy. Yet quality has a subjective meaning; it

depends on who is defining it. When companies focus on quality as a competitive

priority they are focusing on the dimensions of quality that are considered important by

their customers. Quality as a competitive priority has two dimensions. The first is high

performance design. This means that the operations function will be designed to focus

on aspects of quality such as superior features, close tolerances, high durability and

excellent customer service. The second dimension is product and service consistency,

which measures how often the product or service meets the exact design specifications.

A company that competes on this dimension needs to implement quality in every area of

the organization. One of the first aspects that needs to be addressed is product design

quality, which involves making sure the product meets the requirements of the

customer. The second aspect is process quality, which deals with designing a process to

produce error free products. This includes focusing on equipment, workers, materials

and every other aspect of the operation to make sure it works the way it is supposed to.

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Companies that compete based on quality have to address both of these issues; the

product must be designed to meet customer needs and the process must produce the

product exactly as it is designed.

When it comes to a bank, service quality plays a crucial role in its success. One way to

improve quality is to improve communication with the bank’s customers.

Communication includes all customer contact from monthly statements to personal

contact at the branch. Each contact is vital because banking is an intangible service,

which cannot be readily assessed by potential customers before the service is delivered.

When it comes to operations, quality is a key component from a banker’s perspective

and is one of the key objectives of operations. Quality can be improved by decreasing

the variations in the services being delivered by the banks. Therefore attention should

be given towards customers’ interaction with the bank.

The operations manager is right in the middle of the quality discussion. He is having the

sole responsibility to make sure that the bank’s system of delivery is satisfactory both

from the customer stand point and internally. Bankers along with operations officers

should also consider the internal service quality. For bankers this means having timely

and accurate information. In order to sell the product or additional products to

customers bankers must have reliable information. The banks that cannot access timely

information will not survive. Courteous and consistent service, enlarge customer

relationships, accurate and timely information, efficient bank office processing, highly

personalized service, high value and convenient service these might be the aspects of

quality of banks based on which banks can differentiate their services being delivered to

customers as far as the quality is concerned.

5.3 Delivery

Speed of delivery is an important determinant in the purchasing decision of customers.

Here, the ability of a firm to provide consistent and fast delivery allows it to charge a

premium price for its products. In addition to speed of delivery, the reliability of the

delivery is also important. In other words, products should be delivered to customers

with minimum variance in delivery times. Today’s customers do not want to wait and

companies that can meet their need for fast service are becoming leaders in their

industries.

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When it comes to delivery it can be divided into two categories namely rapid delivery

and on-time delivery. Rapid delivery refers to how quickly an order is received and on-

time delivery refers to the number of times deliveries are made on time. When delivery

is a competitive priority, the job of the operations function is to critically analyze the

system and combine or eliminate processes in order to reduce time so as to speed up

delivery. Often companies use technology to speed up processes rely on a flexible

workforce to meet peak demand periods and eliminate un-necessary steps in the

production process.

As far as the banking service is concerned, banks should concentrate on reducing the

waiting time of customers. The shorter the time customers waiting in the line the higher

the satisfaction will be and vice versa.

5.4 Flexibility

Flexibility is a competitive priority focusing on offering a wide variety of products or

services. There are two dimensions of flexibility. One is the ability to offer a wide

variety of products or services and customize them to the unique needs of clients. This

is called product flexibility. A flexible system can quickly add new products that may

be important to customers or easily drop a product that is not doing well. Another aspect

of flexibility is the ability to rapidly increase or decrease the amount produced in order

to accommodate changes in the demand. This is called volume flexibility.

Companies that compete based on flexibility often cannot compete based on speed,

because it generally requires more time to produce a customized product. Also, flexible

companies typically do not compete based on cost, because it may take more resources

to customize the product. However, flexible companies often offer greater customer

service and can meet unique customer requirements. To carry out this strategy, flexible

companies tend to have more general purpose equipment that can be used to make many

different kinds of products. Also, workers in flexible companies tend to have higher

skill levels and can often perform many different tasks in order to meet customer needs.

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6. A brief Overview of Sampath Bank PLC

Sampath Bank commenced business early 1987 as the Investment and Credit Bank. In

September 1987, the name was changed to Sampath Bank Limited. The bank has had a

broad based shareholding from the time its shares were quoted on the local stock

exchange-at that time. In fact, it had the largest number of shareholders (over 18,000)

for a public quoted company in Sri Lanka. The bank was an immediate success; and it

revolutionized the banking industry in Sri Lanka by introducing customer-centric

products and services, and drastically reducing transaction times. Blending modern

technology with a strong sense of national consciousness was the secret of its success.

Value addition has been its main strength. It invests in technology and employs

dynamic and self-motivated professionals to enhance its service capabilities.

Innovation, team work and high ethical standards have contributed to the success of

Sampath Bank. In a relatively short time span the bank has produced many firsts. It was

the first local bank in Sri Lanka to be fully computerized and the first to issue Master

Cards. It was also the pioneer in networked Automated Teller Machines (ATMs) and

the first bank in Sri Lanka to introduce telephone banking.

Sampath Bank PLC has also been a trailblazer in Information Technology (IT) and

Transmission Control Protocol (TCP) in communications. Regularly acquiring cutting

edge technology, it localizes this aspect to make it more adaptable and suitable to meet

the needs of customers. Indeed, it is the first bank to bring virtual banking to the door

step of even remote rural areas in the country. The bank has also introduced internet and

mobile banking, and it is a principal member of Master Card and Visa. A staff strength

more than 1900 and a network more than 100 branches in Sri Lanka is testimony to the

bank’s impressive growth over the years.

6.1 Vision and Values of Sampath Bank

Vision is an aspirational description of what an organization would like to achieve or

accomplish in the mid-term or long-term future. It is intended to serve as a clear guide

for choosing current and future courses of action. The vision of Sampath Bank is “The

Growing Force in Sri Lankan Financial Services”. The vision of Sampath Bank has a

more clarity in business perspective than the focus. Therefore the vision of Sampath

Bank can be placed as the Mission where the organization doesn’t have any mission

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statement in the current context. This will enable the organization to have more clarity

in business perspective whilst clearly defining the overall objectives of the organization.

Values are a company’s ethical and moral compass and decision making foundation.

They are the ideals and ethics that management holds valued. They drive decision

making in that they are constantly referred to in the decision making process. They tell

those in the company how things are done and those outside the company why they

want to be associated with this company. Sampath Bank has six values namely; create a

learning culture that promotes individual and organizational development as well as

promoting innovation and value for customers, treat all internal and external customers

the way we would like to be treated, encourage and promote team work in all aspects of

behavior, open to feedback and demonstrate an impressive commitment to results and

uncompromising ethical and professional standards of behavior.

7. Core areas of Operation of Sampath Bank

Sampath Bank is the third largest private sector commercial bank in the country, in

terms of total assets, focusing on delivering futuristic financial services to individuals,

corporates and other institutions. The core areas of business are organized in to Personal

Banking, Corporate Banking, Treasury Operations, Credit and Debit Cards and E-

Banking.

7.1 Personal Banking

It caters to wide range of customers facilitating management of personal finances

through a range of products that address their investment with transactional and

financing needs.

7.2 Corporate Banking

It delivers financial solutions tailored to meet corporate investment and operational

needs through the bank’s sub divisions; Corporate Credit, Development Banking, Trade

Services, Corporate Finance and the Foreign Currency Banking Unit.

7.2.1 Corporate Credit

It provides credit facilities across a spectrum of products tailored to the corporate sector.

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7.2.2 Development Banking

It focuses on financing the business commencing operations utilizing credit lines

available to the banking industry, concessionary funds from their own funding base and

an allocation from the Investment Fund Account.

7.2.3 Trade Services

It provides documentary credit and related facilities to importers and exporters

harnessing technology effectively to provide a fast and reliable service.

7.2.4 Corporate Finance

It provides Merchant Banking and Professional Corporate Services, advisory and other

corporate services.

7.2.5 Foreign Currency Banking Unit

It has been formed with a view to provide solutions and expertise for corporate clients’

foreign currency financing needs.

7.3 Treasury Operations

It carries out interbank operations to manage the bank’s exposure to exchange rate risk,

interest rate risk and liquidity risk arising from normal banking activities.

7.4 Credit and Debit Cards

It offers a range of cards to suit the diverse life style needs of Sri Lankans with

unmatched promotions and the highest security for all transactions.

7.5 E-Banking

It develops and maintains a range of products facilitating electronic transactions for the

convenience of the bank’s customers. These range from Mobile Cash to the Sri Lanka

e-gateway for tourist visas to Sri Lanka.

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8. Operations Strategy Model of Sampath Bank

Core areas of Operation

Stakeholders Products Delivery Channels Strategy

Personal Banking

Senior CitizensSampath Sanhinda Savings & FD’s

Bra

nch

Net

wor

k

AT

M N

etw

ork

Inte

rnet

Ban

kin

g

Mob

ile

Ban

kin

g

Growth through innovative product design and outreach

Children‘Pubudu’ & ‘Sapiri’ Minor Savings

Teenagers ‘X Set’ Savings

Professionals

‘Supreme’ Current Accounts, Local & Foreign Currency Savings, FD’s, Housing & other loans

Families ‘Sevana Dayada’ Housing Loans

Corporate Banking

Corporates

Working Capital Financing, Import & Export Financing, Leasing, Guarantees, Corporate Payment System

Organic Growth through superior Service

Development Banking

Corporates Project Financing

Selective GrowthSME’s SME LoansSmall Entrepreneurs

Micro Financing

Trade Services

Corporates LC’s Bills Collections Professional Service using cutting edge technology

SME’sImport Financing, Shipping Guarantees

Individuals Vehicle Import Facilities

Treasury Operations

CorporatesTreasury Bills, Bonds, Repos & Reverse Repos

Understanding Customer needs and delivering best solution

SME’s

Individuals

Credit & Debit Card Operations

ProfessionalsMaster & Visa Credit Cards Affinity Cards

Achieve Industry Leadership

Employed PersonsSelf-Employed

Safeguard Asset Quality

Maintain Stability

Improve Risk Management, Compliance & Corporate Governance

Sustainable Growth in returns

Employees Shareholders CustomersSupplies &

Service Providers

Government & Regulators

Figure 3: Operations Strategy Model of Sampath Bank PLC

(Source: Adapted from Sampath Bank Annual Report 2012)

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As you can see from the figure 3 that it provides a detailed view of the framework of

operations strategy adopted by the Sampath Bank PLC. The figure consists of four main

pillars starting from core areas of operation, stakeholders, products, delivery channels

and at last strategy. Each core areas of operations of the bank is segmented towards

various stakeholders connected with the business and the bank provides specific

products and services tailored to fit the requirements of the stakeholders of their

business. The service of the bank is being delivered via four delivery channels namely

Branch Network, ATM Network, Internet Banking and Mobile Banking. Each area of

operations uses different kind of strategy.

As you can see from the figure that the bank is having diversified products to meet the

requirements of its clients. This is an indication of product flexibility being applied by

the Sampath Bank. Furthermore, the figure depicts the core strategy of the bank

defining areas of growth within the risk appetite of the bank linked to support services

and delivery channels necessary to support the defined growth. Ambitious organic

growth through inclusive banking, consolidate branch operations, improve profitability

through responsive pricing and cost management, safe guard asset quality, technology

driven banking, focus on key customer groups, business growth through innovative

products and pioneering services these are the strategies used by the bank which lead

them towards sustainable growth in returns.

When it comes to banking now a days technologies are being employed by various

banks to streamline their operations and creating sustainable competitive advantage.

That is technology driven banking plays a crucial role towards the success of banks.

Sampath Bank is the first one introduced the ATM in the banking history of Sri Lanka

and is known as the pioneer in applying technologies for the betterment of services

being provided by the banks.

The best way to measure growth is to check on how it has benefited stakeholders as it is

clearly evident by the strategic model being applied by the bank. While being focused

on corporate development and product innovation, the bank has contributed to uplift the

living standards of its stakeholders.

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As you can see from the figure that the bank’s operations strategy model is very

detailed across the operational areas and flexible in reacting to environmental changes.

For a strategy to be effective it must not only be well-fitted to its competitive

environment but it also must be communicated and widely understood throughout the

organization. As far as I know the strategic model being applied by the Sampath Bank is

organic (adaptive to changes in the environment) and well suited to the turbulent

business environment.

9. Concluding Remarks

The banking sector is a key player in the country’s financial system accounting for

69.7% of the total financial sector’s assets. There are 33 banks in operation as of 2012

comprising 12 domestic licensed commercial banks, 12 foreign commercial banks and 9

licensed specialized banks.

The information revolution in computers and tele communications technology has had

and will continue to have a major impact on the financial services industry of Sri Lanka.

Banks in Sri Lanka have to vie with host of competitors not only with other banks but

also with investment companies, finance companies, insurance companies and

brokerage companies. Therefore, success depends on how they differentiate their

services and how adaptive they are to the changes in the turbulent business

environment. Thus, strategy plays a crucial role when it comes to the success of them.

The strategic model or framework of the banks should be organic and should align with

the overall corporate strategy of them. If a bank fails to adapt a model to the changes in

the environment will definitely result in entropy.

What I came to know was the business strategy of Sampath Bank was to take advantage

of an opportunity in the market. The combination of globalization of business coupled

with advances in technology has created a hyper-competitive environment in which

managers must constantly be looking for new and innovative strategies to stay ahead of

competition. The operations strategy model of the Sampth Bank PLC was detailed and

the strategies used in the each operational areas were very good when it comes to facing

the challenges in the modern business era.

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Banks that ignore the important role of operations management within an organization

pay a price: failure. From an operations management perspective banks should focus on

continuously providing high quality service to the customers with shorter waiting times

and better customer service while simultaneously reducing staff and material costs and

increasing the utilization of existing facilities. All of which translates into higher

profitability and lead the banks towards sustaining their business for long.

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References

1. Retrieved from <http://highered.mcgraw-hill.com/sites/dl/free/0070922837/158533/

sample_ch2.pdf.

2. Retrieved from <http://www.wiley.com/college/reid/0471320110/pdf/i_ch02.pdf>.

3. Retrieved from <http://www.tompkinsinc.com/wp-content/uploads/2014/01/aligning-

exec-strat.pdf>.

4. Retrieved from <https://www.sampath.lk/ar2012.pdf>.

5. Everett E. Adam, Jr. & Ronald J. Ebert 2012, Production and Operations

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