Five Developments For Asia Green Development Bank

Asia Green Development Bank (AGD)
Asia Green Development Bank (AGD) is one of the most leading banks in Myanmar. AGD bank is
a public commercial bank founded in Myanmar in 2010 with the aim of delivering banking
excellence through inspired and outstanding customer service, while offering innovative
products and services that meets customers’ requirements. AGD bank ’s headquarter is in
Yangon, which is the industrial and commercial centre of Myanmar. ADG bank ’s services are
ranging from Personal Account, Business Account, Foreign Currency Accounts, loans, Bank Card,
Trade Finance, Foreign Exchange and Remittance to corporate and international banking
including business packages. AGD bank has 77 branches and 65 foreign exchange counters
throughout Myanmar, operating across corporate, retail and international banking with over
2500 staff. ADG serves both corporate and individual customers by offering the best quality of
service. Currently, AGD bank’s customer base is around 700000 across the country and services
are available through mobile and internet banking. ADG Bank is recognised as a leading promoter
of financial technology solutions with the launch of AGD Pay and Onepay which are popular
mobile payment apps. There are about 27 local and 13 foreign-based banks while 49
representative offices of foreign banks are in Myanmar. ADG bank’s key competitors are
Kanbawza Bank limited (KBZ), Yoma Bank, Ayeyarwady Bank ( AYA Bank), United Amara Bank,
Co-operative Bank Limited (CB Bank), Innwa Bank Limited, Myanmar Economic Bank, Myanmar
Foreign Trade Bank(MFTB), State Bank of India, MUFG Bank, Sumitomo Mitsui Banking
Corporation, OCBC Bank, Bangkok Bank, Mizuho Bank, Industrial and Commercial Bank of China.
Changes in banking sector
To survive and grow in the ever-changing market environment, AGD bank always keeps an eye
on the developments in the banking industry. “Since 2010, reforms efforts by the government
and the opening up of the economy have trigger economic growth in Myanmar. The central bank
of Myanmar introduced new prudential regulations and reduced overdraft lending to promote
the domestic banking sector” (Report, 2018).
These changes will encourage economic growth and developments in the banking and financial
sector and level of competition will be more intense than before. AGD bank identifies and
analyses these developments with porter five forces model to understand the future of the
competitive environment.
AGD bank’s porter’s five forces model of competitive market
Bargaining
power of
suppliers
Threat of new Scale Bargaining

foreign banks of power of
and local bank Rivalry customers
Threat of
pawnshop and
micro finance
institutions
Figure 3: AGD bank’s porter’s five forces model
Development of scale of rivalry

“Due to political and economic liberalization with supporting of infrastructure, the banking
industry is developing at a fast pace” (Report, 2018) . “In 2018, foreign banks were allowed to
operate and provide the full suite of trade financing services” (Finance, 2018) . “Currently, there
are 27 domestic privates bank and 13 foreign banks from China, Japan, Singapore, India, Malaysia
and Vietnam while 49 other banks have representatives’ offices here” (Aung, 2018). To combat
against the powerful competitor, local banks can potentially cooperate with any foreign banks.
Increasing bargaining power of supplier

Custom deposit, mortgages and loans are major supply as well as primary resource of capital for
AGD bank. So, bank mainly replies on the loan brokers and agents from mini-bank operators to
distribute loans and collect interest and repayments. These suppliers can integrate to expand
their networks in order to get higher commission and profit margin.
Increasing bargaining power of customers

Customers have more freedom of choice to seek the lowest cost of financing because of
increasing number of foreign banks and financial services. If AGD bank doesn’t provide unique
perception of value for money, customers will close the old account and open a new one at other
bank to get superior service.
Development of financial service substitutes

Other financial service substitutes such as micro finance institutions (MFI), pawnshops and
mobile money services provide affordable financial services for the unbanked population in rural
areas. Development of these financial services allow customers to do money transfer and loans
in a fast and easy way which “services were traditionally available from banks” (Vitt, 2003).
Development of new entrants

Due to the government regulatory and large capital requirements, the threat of new competitors
seems relatively low, AGD banks should be fully aware of the entrance of foreign banks with high
investment and expertise. Moreover, Foreign banks are permitted to expand across the country.
These five developments of competitor landscape and market environment changes in banking
sector can impact directly or indirectly AGD bank’s strategy and organisation’s performance.
AGD’s strategy
AGD bank aims to focus on differentiation strategy to sustain current position as a leading
financial service and growth of organisation in this dynamic and customer-centric financial
industry. To meet the banking’s clients’ needs and expectation, AGD bank first builds up customer
profile and then serves customers with tailor-made financial products and superior service
delivering tangible and intangible value. Mobile banking apps like Onepay and AGD pay will allow
the customer to get quick access with their financial requirements in faster and secure way.
Through organisation website and social media, customers can also experience 24/7 hours
customer services and get the update information. These competitive advantages promote
organisation’s current banking systems for further growth.
The impact of five developments on AGD bank’s strategy

Analysing with porter five forces model reveals the development and trends of banking sector.
For example, new entrance of foreign banks with technology innovation and expertise can offer
their products better, cheaper or faster through online banking. Their economies of scale can be
threat to the AGD bank’s differentiation strategy in the future. Anticipating the development of
online mobile banking in the future, AGD bank launched recently AGD pay and Onepay app to
fulfil the market demands.
As the level of competition in the banking sector is more intense, local and foreign banks try to
attract customers’ attention with better services and effective pricing strategies and expand their
networks in financial sector. Competitive rivalry can affect AGD bank’s implementation of
differentiation strategy and objectives for long-term value creation. So, AGD bank needs to
modify and adjust its current strategy to compete against competitors’ rivalry scale.
The emergence of alternative financial services pawnshops, micro finance institutions and mobile
money services like Wave Money, MPT Money, OK dollar and M-Pitesan can challenge the
effectiveness of differentiation strategy. As AGD bank has foreseen these dynamic changes in the
industry, it welcomes this new trend in partnership with TrueMoney, international mobile
financial service.
AGD bank assumes increasing bargaining power of customers and suppliers in this sector as
opportunities to develop the differentiation strategy tailoring financial service according to the
market demand. AGD bank’s customer- centric orientation services and effective marketing
activities build long-term sustainable relationship with customers with different needs and
increase market share.
Actually, these five developments in banking industry can give pressure on the organisation’s
performance and development of differentiation strategy. AGD bank should stay awake to their
potential impact on the organisation’s differentiation strategy alongside new opportunities and
risks associated with them. So, organisation’s strategy needs to be appropriate and relevant with
market changes and external factors. Allocating internal resources and utilizing strategy
effectively will lead to long-term success and ultimately profitable competitive advantage for
AGD bank.

Five Developments For Asia Green Development Bank

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Asia Green Development Bank (AGD)

AGD bank’s porter’s five forces model of competitive market

Threat of new Scale Bargaining

Figure 3: AGD bank’s porter’s five forces model

Development of scale of rivalry

Increasing bargaining power of supplier

Increasing bargaining power of customers

Development of financial service substitutes

Development of new entrants

The impact of five developments on AGD bank’s strategy

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