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MGT603 - Strategic Management - Lecture Handout 28

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BOSTON CONSULTING GROUP (BCG) MATRIX

Learning objective

After understanding this chapter you are able to understand BCG and IE matrices and also understand how to prepare these matrices for any organization and what its practical implementation in various organizations.

The Internal-External (IE) Matrix

This is also an important matrix of matching stage of strategy formulation. This matrix already explains earlier. It relate to internal (IFE) and external factor evaluation (EFE). The findings form internal and external position and weighted score plot on it. It contains nine cells. Its characteristics is a s follow

  • Positions an organization’s various divisions in a nine-cell display.
  • Similar to BCG Matrix except the IE Matrix:
    • Requires more information about the divisions
    • Strategic implications of each matrix are different
  • Based on two key dimensions
    • The IFE total weighted scores on the x-axis
    • The EFE total weighted scores on the y-axis
  • Divided into three major regions

MGT604 - Management of Financial Institutions - Lecture Handout 42

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Related Content: MGT604 - VU Lectures, Handouts, PPT Slides, Assignments, Quizzes, Papers & Books of Management of Financial Institutions

Banking Fraud & Misleading Activities

Bank fraud is a federal crime in many countries, defined as planning to obtain property or money from any federally insured financial institution. It is sometimes considered a whitecollar crime.

• Rogue Traders

A rogue trader is a highly placed insider nominally authorized to invest sizeable funds on behalf of the bank; this trader secretly makes progressively more aggressive and risky investments using the bank's money, when one investment goes bad, the rogue trader engages in further market speculation in the hope of a quick profit which would hide or cover the loss. Unfortunately, when one investment loss is piled onto another, the costs to the bank can reach into the hundreds of millions of dollars; there have even been cases in which a bank goes out of business due to market investment losses.

• Fraudulent Loans

One way to remove money from a bank is to take out a loan, a practice bankers would be more than willing to encourage if they know that the money will be repaid in full with interest. A fraudulent loan, however, is one in which the borrower is a business entity controlled by a dishonest bank officer or an accomplice; the "borrower" then declares
bankruptcy or vanishes and the money is gone. The borrower may even be a non-existent entity and the loan merely an artifice to conceal a theft of a large sum of money from the bank.

• Wire Fraud

Wire transfer networks such as the international SWIFT inter-bank fund transfer system are tempting as targets as a transfer, once made, is difficult or impossible to reverse. As these networks are used by banks to settle accounts with each other, rapid or overnight wire transfer of large amounts of money is commonplace; while banks have put checks and balances in place, there is the risk that insiders may attempt to use fraudulent or forged documents which claim to request a bank depositor's money be wired to another bank, often an offshore account in some distant foreign country.

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