BANK MANDIRICOMPANY ANALYSIS

Prepared by:

Hesty Oktariza

(014200900073)

BF2 2009

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THE COMPANY

A. OVERVIEW OF BANK MANDIRI

PT Bank Mandiri (Persero) Tbk., headquartered in Jakarta, is the largest

bank in Indonesia in term of assets, loans, and deposits. It is an Indonesia-

based financial institution which operates in the national commercial banks

sector. The bank’s business units are including:

Consumer Banking

Small and Micro Business

Commercial Banking

Corporate banking

Treasury & International Banking Services

Subsidiaries of Bank Mandiri are including: Mandiri

Sekuritas (for businesses in the capital market), Bank Syariah Mandiri (for

Islamic-compliant financing), AXA-Mandiri Financial Services (for life

insurance), Bank Sinar Harapan Bali (for micro and small businesses

financing), and Mandiri Tunas Finance (for vehicle ownership financing).

As of December 31, 2010, Bank Mandiri was supported by 12 regional

offices, 66 hub offices, 115 community offices, 1096 branch offices and

cash outlets, 12,666 numbers of ATM network, four international offices

and one representative office.

Several awards achieved by Bank Mandiri in 2010 are:

Economic Challenges Award

as The Most Admired

Companies 2010 Category

sector Banking/ Finance

from MetroTV

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ICSA Award 2010 for

category Credit card

Indonesia Good Corporate

Governance Award 2010.

The Most Trusted

Companies. Predicate :

Very Reliable Point 91.67

The Strongest Bank

Award 2010 in Indonesia

from The Asian banker

B. VISION AND MISSION

Vision

“To be Indonesia’s Most Admired and Progressive Financial Institution.”

Mission

To be market oriented

To enhance professionalism

To maximize returns to stakeholders

To have an open management approach

To demonstrate concern for the community and environment

C. BRIEF HISTORY

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Asset

Types of Product

Brands of Bank

1998

Bank Mandiri was formed on 2 October 1998 as the result of the merger

made by Indonesian Government from four older government-owned

banks that had failed in financial crisis in 1998.

1999

In July 1999, those four state-owned banks which include Bank Bumi

Daya (BBD), Bank Dagang Negara (BDN), Bank Ekspor Impor

Indonesia (Exim) and Bank Pembangunan Indonesia (Bapindo)

were amalgamated with Bank Mandiri. During the amalgamation and

reorganization, the government reduced the number of branches by 194

and the number of personnel from 26,600 to 17,620.

Bank Mandiri commenced commercial operations in August 1999.

2003

On 14 July 2003, the Government of the Republic of Indonesia divested

20% (4 billion shares) of its shareholding in Bank Mandiri through an

initial public offering (IPO). In April, Bank Mandiri issued a five-years US$

300 million MTN listed on Singapore Stock Exchange.

2004

On March 2004, the Indonesian Government divested an additional 10%

of its shareholding in Bank Mandiri through secondary offering.

INDUSTRY ANALYSIS

A. INDUSTRY MAP OF CONSUMER BANK

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AssetPT Bank Mandiri Tbk is in the top position, it controls assets Rp 371.67 trillion which worth 13.76 percent share of total banking assets in Indonesia.

Market Share of Indonesian Banking Industry Based on Asset

Types of ProductBased on the type

on product,

commercial banks

in general offer

Mandiri; 13.76

BRI; 11.36

BCA; 11.3

BNI; 8.04

CIMB Niaga; 4.7

Danamon; 3.77

Panin; 3.39

BII; 2.48Permata; 2.42 BTN; 2.28

Source : Statistical Data, August 2010

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various interest- products include savings, current account,

deposits, credit cards, etc.

Current Account29%

Savings47%

Deposit20%

N/A4%

Market Share based on Consumer Saving Product

Source : PWC Indonesian Banking Survey 2011

Brand of BankBank Mandiri stands in the second position after BCA based on the

popularity of its brand which was obtained from the numbers of its

occurence on web pages, news, pictures and people vote in

corresponding context.

B. CONSUMER ANALYSIS

BCA23%

Mandiri20%

BRI15%

BNI14%

CIMB9%

Danamon7%

BII5%

Panin2%

Other6%

Market Share of Indonesian Bank based on Brands of Bank

Source : Majalah SWA, December 2010

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Importance’s ranking of customer’s bank selection factors are including:

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

ATM Service

Secure Feeling

Service provision

Proximity

Financial benefit

Branch Location

Attractiveness

Marketing Promotion

People Influences

In 2008, there were about 10 million credit cards (up from 9 million) and 36

million debit cards (up from 26 million) in ccirculation. That debit card

growth mirrors international trends in

the wake of the global recession.

(Euromonitor International).

This increasing is likely caused by the

arising need of people on mobility

which is provided by non-cash

payment tools such as credit card

and debit card as well as M-

banking and internet banking.

C. HOT NEWS

Bank Mandiri Launched

e-Toll Card Non-Stop

Frequency of Using Internet Banking

FrequentlyMonthlyYearlyNever

Frequency of Using ATM cards

FrequentlyWeeklyMonthlyNever

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Kompas.com:http://bisniskeuangan.kompas.com/read/

2011/11/30/17304937/Bank.Mandiri.Luncurkan.E-Toll.Card.Non-Stop

In order to reduce traffic jam and loss due to errors of manual

payment, Bank Mandiri and Jasa Marga develop transaction payment

service through e-Toll Card Non-Stop.

Bank mandiri Launched Banking School Program

Antaranews.com: http://www.antaranews.com/berita/286161/bank-

mandiri-luncurkan-sekolah-perbankan

Such program is expected to help improve school facility and

become the media to enhance students knowledge about banking

products.

Bank Mandiri Opened New Branch in Shanghai

Pasarmodal.com:

http://pasarmodal.inilah.com/read/detail/1802903/mandiri-buka-

cabang-di-shanghai

The new branch is launched to boost Mandiri’s international

presence and tap the growing numbee of Indonesian businesses and

migrant workers overseas.

D. FUTURE ANALYSIS

In 2012, Indonesian banking industry is expected to reinstate its

optimum intermediary role since the global economy has started to

recover from financial crisis. Many parties, especially entrepreneurs and

government expect a more significant contribution of banking industry to

drive the economy. During 2011, many parties had thought that banking

industry has yet to run its intermediary function optimally, due to the

fact that banks still implement high interest strategy to maintain their

profit margin level.

Bank Mandiri’s business target for the next five years is to accelerate

market penetration so as to become the leading player in the

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Consumer Banking

Retail Store

Hotel and Restaurant

Educational Institution

Transport-ation

Consumer Product

wholesale transaction banking, retail deposit and payment, and retail

financing segments. It is convinced that with determination and

consistency, Bank Mandiri’s focus on these three areas will generate

growth and improve profitability so as to support it vision of making

Bank Mandiri one of the top 5 banks in Asean by the end of 2014, and

one of the top 3 by the end of 2020, in terms of market capitalization.

E. CROSS-LINK BETWEEN INDUSTRIES

There is strong correlation between Bank Mandiri and various type of

industries particularly in the payment system by using Mandiri’s product.

Bank Mandiri often offers many special deals as the result of its mutual

collaboration with certain companies in order to enhance sales of the

company and maintain loyalty of Mandiri’s customers.

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For example, the collaboration between Mandiri and Hypermart and Home

Building Centre in Retail Store sector.

Furthermore, Bank Mandiri is often acted

as the medium of payment within

government and educational institution

such as

payment of

electricity

through e-

banking.

Mandiri

have also made many deals in Hotel,

Restaurant and entertainment industries

such as the recent collaboration with Solaria, PapaRonz Pizza or regular

promotion in Dunia Fantasi and Waterboom as

well as various range of consumer products,

from electronics to cosmetics.

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COMPETITION ANALYSIS

a. Consumer Bank Business Level Based on Market Share and Popularity

b. General Comparison between Bank Mandiri and BCA

General Comparisons

1998 Established 1957

IDR 366.5 Total Asset (in trillion) IDR 282.8

IDR 109 Market Capitalization (in

trillion)

IDR 127

43.1% Increasing in Net Profit 18.3%

ATM Bersama ATM Network ATM Prima

9,000 Number of ATM (units) 7,400

Bank Mandiri, BCA

BRI, BNI, CIMB Niaga, Standard Chartered, Deutche Bank

BTN, Bank Danamon, Panin, BII, Permata Bank, Bank Artha Graha, OCBC

Bank Mayapada, Bank Pundi, Bank Victoria, Bank Bukopin, Bank Bumiputera,

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c. Specific Comparison between Bank Mandiri and BCA

Below are specific comparisons between two saving account product from Mandiri and BCA.

Specific Comparison

IDR 500,000 Start-up deposit IDR 500,000

IDR 9,000Monthly administration

feeIDR 10,000

IDR 100,000Minimum account

BalanceIDR 10,000

0.00 – 2.75 % Interest Rate 0.00 – 2.2%

Autodebet, AFT Facilities Autodebet

Mandiri Fiesta Prize-drawing program Gebyar Tahapan BCA

ATM Bersama, ATM

Link, VISAATM Network

ATM Prima, Cirrus,

Maestro, VISA

Mandiri Call (14000) Phone-line HaloBCA (500888)

Mandiri SMS SMS Banking M-BCA

Mandiri Internet Internet Banking Klik BCA

d. Promotion of BCA

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GENERAL BUSINESS STRATEGY

A. MARKETING MIX

SERVICES

Banking product is their service, which is intangible. Banking services that

are provided by banks in general are including money in different types

and attributes like lending, depositing and transferring procedures. For its

consumer banking segment, Bank Mandiri offers a wide range of banking

services which consist of:

Mandiri Saving

Mandiri Current Account

Mandiri Deposit

Mandiri Debit

Mandiri Prepaid

Mandiri Credit card

Mandiri Consumer Loan

Mandiri Priority Services

Investment Product, Retail

Brokerage & Bank Assurance

Consumer Banking Treasury

PRICE

The price which is an important

component of marketing mix is named

differently in the base of transaction

exchange that takes place in bank.

Banks have to estimate the prices of

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their services offered. Prices in banking industry are known for interest,

commission and expenses.

The interest rates in Bank Mandiri vary based on type of the banking

products and the total saving amount or the saving period. Below are

the list of interest rates from Mandiri consumer banking.

Products or Services Interest Rate

Mandiri Deposits 5% - 6.5%

Mandiri Foreign Deposit 0.25% - 0.75%

Mandiri Saving 0.0% - 2.75%

Mandiri Current Account 0.0 % - 2.5%

PLACE

For its distribution channel, Bank Mandiri currently set up in 12 regional offices, 66 hub ooffices, 115 community offices, 1096 branch offices and cash outlets, 12,666 numbers of ATM network, four international offices and one

representative office.

Bank Mandiri also develops more advanced distribution to serve their customers through internet banking, sms banking and phone

banking.

PROMOTION

The promotion mix of Bank Mandiri consists of three types:

Above the line

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Mandiri broadcast their advertisement through TV, billboard and put it on newspapers also, for example these ads that were taken from Kompas.

Below the lineBank Mandiri conducts the main promotion through cooperational and sponsorship strategy with other industry within their cross-link.

For instance, recently Bank Mandiri also became one of the honorable sponsor for 26 th SEAGAMES 2011 that was held in Jakarta and Palembang.

Others

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BCA Mandiri

BRI

BNI, CIMB Niaga, OCBC

HSCB, Permata Bank, BTN, Danamon

BJB, Bank DKI, Bank Bukopin, BPN, Bank Mega

B. STP ANALYSIS

C. TRIANGLE OF BRANDS

Respondents were asked to mention 10 names of consumer banks

(particularly those provide ATM services), and resulted as below:

Demographic

Social class Occupation Age

Segmenting Targeting

Working class, lower – upper class Entrepreneur, workers, professional Young-adult

Positioning : Strong, Trusted, Accessible

Geographic

Region Urban – Metropolitan areas

Behavioral

Benefit Security, Investment

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D. LOCKING BRAND IDENTITY (PRESENT)

Publish GreatnessThe following ads display award of Best Service Quality achieved by Bank Mandiri in 2010.

Unique brand’s nameBank Mandiri took the company’s name from Indonesian words, as opposite to other banks which usually use the acronim such as Bank Central Asia (BCA) and Bank Rakyat Indonesia (BRI).

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E. IMPROVING SALES (PRESENTS)

Creating more distribution linesBank Mandiri has creating enhancement on its distribution lines as

follow:

1,096 Branches

5495 ATM of Mandiri itself

14,822 ATM connected with Link

Network

7 International offices

Recently, Bank Mandiri cooperate

with ATM Prima network. This new

agreement means that Bank

Mandiri customers will be able to

complete cash transactions, withdrawals, check balances, and transfer

funds between more than 22,000 banks that are connected through

the ATM PRIMA network, including more than 7,000 BCA ATM’s.

Mandiri’s linked ATM network will surpass 40,000 ATMs, through the

ATM PRIMA Network, Link, or ATM Bersama spanning throughout

Indonesia. In addition, customers from the 48 existing banks that  are

members of the ATM PRIMA Network will be able to complete similar

transactions at Bank Mandiri ATM’s.

Creating more service’s type

Below are several subtypes of various services provided by Bank

Mandiri:

Mandiri Saving Mandiri Consumer Loan Other Service

Mandiri Saving Account

Mandiri Business

saving

Mandiri KPR

Mandiri KPR

Multiguna

Mandiri Traveller

Cheque

Mandiri Payment

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Mandiri Plan Saving

Mandiri Hajj Saving

Mandiri Valas

Mandiri Tabungan TKI

Mandiri Personal

Loan

Mandiri Mitra Karya

Mandiri Tunas KPM

Point

Payroll Package

Fund Transfer

Safe Deposit Box

Creating product’s innovation

ATM Drive Thru

Mandiri Mobile banking

Internet Banking

Mandiri SMS Banking

Mandiri Call 14000

Verified by VISA

Bank Mandiri, in collaboration with Visa, the

Indonesia Credit Card Issuer Association (AKKI)

and Infinitium Solution, introduce a new security

measurement for customers for online payment using credit

cards, the so-called “Verified by Visa“ with 3D Secured

Dynamic PIN. This

technology feature

enhance the security on

online payment.

Encouraging People Awareness

about Bank Importance

In 2004, Bank Mandiri

participates in “Pokja Edukasi

Masyarakat di bidang Perbankan” which

is supervised by Bank Indonesia to

enable the banking industry to operate

prudently, bring itself into line with international standards, and pay

greater attention to customer rights. 

3P and AYO KE BANK are two programs in which is supported by

Bank Mandiri as the part of Public Education that is promoted by

Bank Indonesia as the central bank of Indonesia.

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F. MANAGING CUSTOMER LOYALTY

Creating Events Mandiri Fiesta

Workshop and Training

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Charity

Scholarship and Award

Publish Consumer Experience

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TACTICS (PRESENTS)

DEFENSE TACTICS

REPOSITIONING

During 10 years before Bank Mandiri changed its logo on 2008,

public tend to perceive Bank Mandiri as a corporate bank instead of

retail bank, which image means that it didn’t focus on consumer

service . For this reason, the management team of Bank Mandiri

decided to conduct repositioning tactics by changing the logo and

tagline of Bank Mandiri. They also has English version of the tagline.

(English Version)

MERGER

After the financial crisis in 1998, around 16 banks were collapsed

and couldn’t operated anymore. In order to save these banks, the

government of Indonesia made several quick act to combine its

failed banks into a new bank, which finally resulted as Bank Mandiri

in July 1999.

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RULES AND REGULATION

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TACTICS (FUTURE)OFFENSE TACTICS

FIX MARKETING MIX

PLACE : ENHANCING THE M-BANKING

M-banking is a new potential player supported by the growth of

technology users in Indonesia. The term of M-Banking refers to

transactions undertaken using a mobile device against a

bank account accessible from that device. But traditional m-

banking is only one aspect of the broader set of payments and

fnancial transactions that can be enabled across mobile

networks.

Bank Mandiri should take the M-Banking as the focus on their

future tactics and strategy. This m-banking includes some of this

feature as follow:

M-Payment: point of sale or remote payments made

through a mobile device.

Mobile Money Transfers: the ability to move stored

value from one account to another account using a

mobile device.

M-Wallets : an electronic store of value linked to the

mobile number of their holder. They do not require the

holder to have a bank account, and can also be used as a

payment instrument and a transfer

instrument.

The attraction of m-banking is that it ties together the access

that mobile telephony networks provide with existing banking

and fnancial services. Indeed, the implication of this strategy

should be fully supported by firm IT infrastructure.

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PRODUCT: BANK MANDIRI JUNIOR

To expand its market, Bank Mandiri could target new segment

which is saving account for kids. Although this strategy is not a

breakthrough product in banking industry, but Bank Mandiri can

utilize its wide network to penetrate this new services. In

addition, this strategy also comes up with a new banking

educational program to cultivate the financial awareness since

the early ages.

ADD NEW VALUE OF THE CROSS LINK BETWEEN INDUSTRIES

Along with the new strategy to develop m-Banking system,

stronger mutual relationship should be made with another

industry which is the mobile network operators (MNO) such as

Telkomsel, Indosat or XL Axiata.

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PRINT ADS (PRESENTS)PHILLIP KOTLER

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JAY ABRAHAM

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PRINT ADS (FUTURE)PHILLIP KOTLER

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JAY ABRAHAM

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CONCLUSION AND RECOMMENDATION

As a result of 4 banks merger, Bank Mandiri has came as the largest

bank in Indonesia in terms of asset and marketshare. In fact, Bank

Mandiri has set up a wide distribution channels throughout Indonesia

and it is trying to expand into the global market by establishing

overseas branches to serve international customers. It usually stands

with BCA and BRI as top brand of consumer banks in Indonesia.

For its vission to be the most admired financial institution in

Indonesia, Bank Mandiri has achieved many awards and recognition

from many financial and non-financial institution.

Furthermore, Bank Mandiri’s general business strategies are

emphasizing on keeping their customer loyalty and trust through

many events and promotion as well as improving their service

quality to obtain higher customer satisfaction.

However, Bank Mandiri needs some improvement on maintaining the

efficiency of its transaction. While technology and internet is playing

major role in almost all aspect in the world nowadays, Bank mandiri

has to take this opportunities to firmly establish its position as the

top leader bank in Indonesia by by applying internet banking and

mobile banking as one of Bank Mandiri key strategy.