Ics Final.docx

PESTEL Analysis

Political Factors These are all about how and to what degree a government intervenes in the economy. This can include – government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labour law, environmental law, trade restrictions and so on. It is clear from the list above that political factors often have an impact on organisations and how they do business. Organisations need to be able to respond to the current and anticipated future legislation, and adjust their marketing policy accordingly. Economic Factors Economic factors have a significant impact on how an organisation does business and also how profitable they are. Factors include – economic growth, interest rates, exchange rates, inflation, disposable income of consumers and businesses and so on. These factors can be further broken down into macro-economical and micro-economical factors.

Macro-economical factors deal with the management of demand in any given economy. Governments use interest rate control, taxation policy and government expenditure as their main mechanisms they use for this. Micro-economic factors are all about the way people spend their incomes. This has a large impact on B2C organisations in particular. Social Factors Also known as socio-cultural factors, are the areas that involve the shared belief and attitudes of the population. These factors include – population growth, age distribution, health consciousness, career attitudes and so on. These factors are of particular interest as they have a direct effect on how marketers understand customers and what drives them.

Bank Mandiri PESTEL Analysis

Politic

At present, Indonesian politics after the presidential change in the 2014-2019 period has not been fully stabilized. This certainly has an impact on the Indonesian business and banking environment. Political turmoil will affect investors and business people to invest in the country today. It was also added by the newly appointed Indonesian cabinet ranks from 2014 to 2019. Investors can only predict without knowing how Indonesia really is. This situation is evidenced by the weakening of the rupiah exchange rate against the US Dollar and the decline in the movement of Indonesian shares in the Composite Stock Price Index (CSPI). One of the factors weakening the rupiah exchange rate is indicated by the lack of certainty in the development of the Indonesian economy.

Besides that, with political volatility, this also affects the level of banking liquidity, so this condition will create uncertainty for investors who will invest in Indonesia. Banking is also still

waiting for the policy that will be launched by the government. However, so far, government policies on banks have not made any significant changes.

Economic (Ekonomi ) 

Political chaos that is happening in Indonesia today which is still unclear will have an economic impact in Indonesia. This will have a negative impact, one of the negative effects is the decline in investor confidence.

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The increasingly fierce condition of banking competition in Indonesia to compete for customers will make Bank Mandiri always think of various strategies to deal with its competitors, otherwise the worst chance will occur. Some of Bank Mandiri's strong competitors such as BCA and BRI.

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The increase in world oil prices will have a negative impact, the most likely that will happen is that the government will not be able to provide fuel subsidies anymore, which in turn will increase fuel prices, and automatically this will lead to higher inflation which will adversely affect economy and banking in Indonesia, including Bank Mandiri Tbk.

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The increasing awareness of the Indonesian people to use banking services in Indonesia will create a great economic opportunity for Bank Mandiri.

Social (Sosial) Bank Mandiri has transformed cultures by instilling cultural values that apply to employees working guidelines. This is reflected in Bank Mandiri's achievement as a national banking service leader by occupying the first rank of excellent service for four consecutive years (2007, 2008, 2009 and 2010) based on a Marketing Research Indonesia (MRI) survey. Another achievement, Bank Mandiri also received appreciation from various parties in the implementation of Good

Corporate Governance, and from these two achievements it has a correlation with the positive response of investors reflected in the increase in stock prices of Bank Mandiri.

Technology (Teknologi)

Bank Mandiri is one of the largest banks in Indonesia. In the use of technology, Mandiri banks have used special services, namely internet banking services (e-Banking), which are flexible 24hour mobile information and transaction services, where customers are able to conduct transactions through internet facilities. But the fact is still facing quite an obstacle, there are still many customers who choose other services. In fact, there are customers who prefer to come to an independent bank for transactions rather than conducting transactions in internet banking services. This thing can be caused because many people do not understand technology. In addition, by using technological developments, banks are able to store much greater data capacity

Technological developments also have an impact on competition between banks. In addition, the rapid development of technology also makes cyber crime occur in banks. An example of a cyber crime is a key logger.

Mandiri internet banking is safe from the dangers of key loggers because Mandiri Bank currently uses standalone pin tokens. With this facility, your account cannot be misused even though the information you entered has been caught by a keylogger. This Mandiri PIN Token serves to generate an always changing PIN (Dynamic PIN) every time a customer makes a financial transaction. In conclusion, the influence of technological developments is also able to provide benefits even though the negative side continues to grow along with technological developments.

Environment (Lingkungan)

Geographically Indonesia benefits from its location between 2 continents and oceans. This will benefit Indonesia in trade on a national and international scale. But the potential for disasters that exist in Indonesia is quite large, such as earthquakes, volcanic eruptions, tsunamis and so on. This condition will affect the operations and security of Bank Mandiri. This is because quite a number of Bank Mandiri branch offices are in disaster-prone areas.

Law (Hukum) With the existence of good cooperation between BI and the Government, and now cooperation with the OJK (some of the tasks of BI have been taken over by the FSA) will enable BI to monitor the external and internal impacts that will have an impact on the economy and banking in Indonesia and can formulate strategies for always maintain the stability of the economy.

There is a new regulation in 2014, namely Bank Indonesia Regulation Number 16/1 / PBI / 2014 dated January 21, 2014 concerning Consumer Protection of Payment System Services in the Bank Indonesia Regulation (PBI) related to regulations concerning the protection of consumers of payment system services. the principle of consumer protection. The existence of these regulations is expected to help every consumer user of the payment system services (the simplest example is a credit card holder or ATM / debit) to understand their rights and obligations as consumers of payment system services. The connection with Bank Mandiri is that Bank Mandiri as one of the banks with the largest number of ATMs spread throughout Indonesia must pay attention to this new regulation because this will have an impact on the trust of old consumers and new prospective bank Mandiri customers to use independent products.

Porter’s Five Forces

The five forces are: 1. Supplier power. An assessment of how easy it is for suppliers to drive up prices. This is driven by the: number of suppliers of each essential input; uniqueness of their product or service; relative size and strength of the supplier; and cost of switching from one supplier to another. 2. Buyer power. An assessment of how easy it is for buyers to drive prices down. This is driven by the: number of buyers in the market; importance of each individual buyer to the organisation; and cost to the buyer of switching from one supplier to another. If a business has just a few powerful buyers, they are often able to dictate terms. 3. Competitive rivalry. The main driver is the number and capability of competitors in the market. Many competitors, offering undifferentiated products and services, will reduce market attractiveness.

4. Threat of substitution. Where close substitute products exist in a market, it increases the likelihood of customers switching to alternatives in response to price increases. This reduces both the power of suppliers and the attractiveness of the market. 5. Threat of new entry. Profitable markets attract new entrants, which erodes profitability. Unless incumbents have strong and durable barriers to entry, for example, patents, economies of scale, capital requirements or government policies, then profitability will decline to a competitive rate.

Bank Mandiri Porter’s 5 Forces

COMPETITIVE RIVALRY : HIGH 

At present many banks stand and offer services that are almost the same and similar to Bank Mandiri, such as ATM cards, credit cards, e-cash, pay-pall etc. This matter causing bank competition in Indonesia to be quite high.

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The stable climate of the banking market in Indonesia makes competition among one banks with other banks are high.

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The diverse segment of Indonesian society is one of the fastest growing factors the number of banks throughout the country. So that banks compete with each other to get customer.

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The mastery of technology is quite high among banks, making many banks compete in competing to improve its services through the use of technology.

BUYING POWER : MEDIUM 

Many levels of customers from the lower middle to upper level of use banking services. The customer's consideration when choosing a bank for investment / deposit is the level of profits, administrative costs, security levels, products - products offered and service.

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The products offered are varied, where products are expected to be utilized by many customer segments. Although at present Bank Mandiri has broadened its reach to the community level down, but not all can enjoy Bank Mandiri products. Only people who have sufficient financial capacity can feel these products. Only a few Indonesian people

have used the services of financial institutions, namely approximately 20% of the total Indonesian population. 

The average community that uses Bank Mandiri services is still from the middle class there are still many lower middle class people who use Bank Mandiri services. This is caused by many factors, one of the strongest factor

THREATS FROM A NEW ENTRY : MEDIUM

As is known that the existence of the API (Indonesian Banking Architecture) has been compiled by BI which stipulates that commercial banks that have limited capital, there will also be restrictions on expanding its business. With the existence of this regulation can be concluded that there are limitations to expand, such as opening a branch for a commercial bank if the capital is limited. So that coverage the consumers they get are also small. This will make the party will establishing a bank does have to have high capital if you want to compete with banks that have been established, especially Bank Mandiri. This will be a conditions are quite difficult to establish a bank, due to the limited expansion of a bank, if the capital is also limited. At the moment the OJK is discussing the Indonesian Banking Master Plan (MP2I) for 2014-2024 period. This MP2I is a modification of the API prepared by BI. One of the discussions in this MP2I will discuss capital minimum to establish a bank. The minimum capital discussed will be increased of the pre-arranged aluminum capital, which means that capital is needed if you want to set up a bank the higher it is. With this discussion, the Bank those who have low capital (classified as BOOK I) are expected to conduct a merger which will then produce a new Bank, with capital above 1 Trillion. With the existence of this rule, it will force the Bank classified as deep BUKU 1 (Capital of 100 Billion-1 Trillion) will do a Merger that will automatically produce new banks with high capital, and this can be a threat also Bank Mandiri, because a new bank with high capital will be born too, so that the expansion of the new Bank can also be wider. But in the presence this rule too, can also be a barrier for newcomers Banks (in a sense, not a Bank formed based on a merger), with the existence of capital rules the higher it is

to establish a Bank, it will hamper the establishment of a new bank. So that the number of banks in Indonesia can also be limited. SUPPLIER POWER : LOW 

Bank Mandiri needs suppliers to support customer service tools such as ATM machines, information system applications, corporate ERP, etc. This supplier comes from various supplier companies that are numerous and of various types.

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Bank Mandiri, which is currently in the top rank, clearly has deep strength determine the suppliers. So from this situation, they easily choose which one suppliers who will be made as business partners. Consequently, the bargaining power of suppliers become weak.

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The number of suppliers is relatively large and their customers (Banking) are small, making the demand for their products not too high. This too will affect the supplier's bargaining power.

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The influence of suppliers in the banking world can be said to be low, this is different if compared to the industrial business world which has a considerable influence.

THREATS FROM SUBSTITUTIONS: HIGH PRESSURE 

The substitution threat is high, this is measured by the choice / choice of the community when want to invest money in order to get more benefits than at banking, such as in Financial Insurance Institutions, Cooperatives, Capital Markets, and Pawnshops.

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There are no transitional fees for the substitution factor of financial institutions, so customers with easily move from one financial institution to another financial institution.

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Prospective customers still need financial institutions, whether banking or non-banking. Other financial institutions present with service and security offers no worse than banking.

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Therefore, Bank Mandiri must continue to look for ways to overcome this threat with how to provide services that are more "spoil" customers, so that the excess owned by other financial institutions can be anticipated by Bank Mandiri. However, indeed the

consequences that will occur are the company's burden increases and profits will also go down.

CHAPTER 3 Bank Mandiri allocated 150 million USD ( Rp. 2.2 billion ) for technology in 2019 , the budget that was allocated is the same amount from the previous years. The money was used for multiple developments of corporate’s technology. Rather than for application , the investment was allocated for bank’s server and network security. This strategy aims to improve customer service which result in customer satisfaction which can lead into a new customer. This strategy is to prepare Bank Mandiri facing industry revolution 4.0 changes the banking. Moreover the corporate attempted to improve their capability , currently Bank Mandiri applying two banking system , traditional banking and modern and future banking. As banking on this era focus on how to develop banking digital capability. In the future , Bank Mandiri planned to launch Mandiri Pay , and QR-code based payment system. The system would be linked to E-wallet debit and credit card.