Royal Bank of Scotland Group: The Human Capital Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Royal Bank of Scotland Group: The Human Capital Strategy
Describes the development and implementation of one of the world's most advanced human resource management support systems. The Royal Bank of Scotland Group is a global banking leader that began implementing a strategy for measuring the impact of human capital on bottom-line financial metrics in 2000. Spearheaded by HR executive Greig Aitken, this strategy included the use of an online toolkit of software through which HR executives could measure employee performance, gauge its impact on business performance, and commission new unit-specific surveys and studies. Aitken faces several challenges in advancing the use of human capital strategy throughout the Group: namely, how should he further build buy-in among key Group executives? And how should the Group respond when human capital analysis reveals some startling results in one of its most important divisions?
Swot Analysis of "Royal Bank of Scotland Group: The Human Capital Strategy" written by Boris Groysberg, Eliot Sherman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Human Aitken facing as an external strategic factors. Some of the topics covered in Royal Bank of Scotland Group: The Human Capital Strategy case study are - Strategic Management Strategies, Developing employees, IT, Mergers & acquisitions and Organizational Development.
Some of the macro environment factors that can be used to understand the Royal Bank of Scotland Group: The Human Capital Strategy casestudy better are - – talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, geopolitical disruptions, increasing transportation and logistics costs, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Royal Bank of Scotland Group: The Human Capital Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Royal Bank of Scotland Group: The Human Capital Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Human Aitken, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Human Aitken operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Royal Bank of Scotland Group: The Human Capital Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Royal Bank of Scotland Group: The Human Capital Strategy case study
2. Improving business portfolio management of Human Aitken
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Human Aitken
Strengths Royal Bank of Scotland Group: The Human Capital Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Human Aitken in Royal Bank of Scotland Group: The Human Capital Strategy Harvard Business Review case study are -
Learning organization
- Human Aitken is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Human Aitken is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Royal Bank of Scotland Group: The Human Capital Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Human Aitken in the sector have low bargaining power. Royal Bank of Scotland Group: The Human Capital Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Human Aitken to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Human Aitken has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Organizational Development field
– Human Aitken is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Human Aitken in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Human Aitken has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Human Aitken has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Human Aitken are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Human Aitken has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Royal Bank of Scotland Group: The Human Capital Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Organizational Development industry
– Royal Bank of Scotland Group: The Human Capital Strategy firm has clearly differentiated products in the market place. This has enabled Human Aitken to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Human Aitken to invest into research and development (R&D) and innovation.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Human Aitken digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Human Aitken has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Human Aitken is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Human Aitken
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Human Aitken does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Human Aitken is present in almost all the verticals within the industry. This has provided firm in Royal Bank of Scotland Group: The Human Capital Strategy case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Royal Bank of Scotland Group: The Human Capital Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal Bank of Scotland Group: The Human Capital Strategy are -
Increasing silos among functional specialists
– The organizational structure of Human Aitken is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Human Aitken needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Human Aitken to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Human Aitken has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Human Aitken, firm in the HBR case study Royal Bank of Scotland Group: The Human Capital Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Royal Bank of Scotland Group: The Human Capital Strategy that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Royal Bank of Scotland Group: The Human Capital Strategy can leverage the sales team experience to cultivate customer relationships as Human Aitken is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Royal Bank of Scotland Group: The Human Capital Strategy, is just above the industry average. Human Aitken needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Human Aitken has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Human Aitken even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Human Aitken is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Royal Bank of Scotland Group: The Human Capital Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Human Aitken products
– To increase the profitability and margins on the products, Human Aitken needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Human Aitken has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Royal Bank of Scotland Group: The Human Capital Strategy HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Human Aitken has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Royal Bank of Scotland Group: The Human Capital Strategy, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Royal Bank of Scotland Group: The Human Capital Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Royal Bank of Scotland Group: The Human Capital Strategy are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Human Aitken can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Human Aitken in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Human Aitken in the consumer business. Now Human Aitken can target international markets with far fewer capital restrictions requirements than the existing system.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Human Aitken can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Human Aitken can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Human Aitken to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Human Aitken can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Human Aitken can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Building a culture of innovation
– managers at Human Aitken can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Manufacturing automation
– Human Aitken can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Human Aitken is facing challenges because of the dominance of functional experts in the organization. Royal Bank of Scotland Group: The Human Capital Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Human Aitken can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Human Aitken to increase its market reach. Human Aitken will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Human Aitken can use these opportunities to build new business models that can help the communities that Human Aitken operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Threats Royal Bank of Scotland Group: The Human Capital Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Royal Bank of Scotland Group: The Human Capital Strategy are -
Environmental challenges
– Human Aitken needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Human Aitken can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing wage structure of Human Aitken
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Human Aitken.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Royal Bank of Scotland Group: The Human Capital Strategy, Human Aitken may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Human Aitken will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Human Aitken high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Human Aitken is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Human Aitken.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Human Aitken can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Human Aitken business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Human Aitken can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Royal Bank of Scotland Group: The Human Capital Strategy .
Technology acceleration in Forth Industrial Revolution
– Human Aitken has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Human Aitken needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Royal Bank of Scotland Group: The Human Capital Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Royal Bank of Scotland Group: The Human Capital Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Royal Bank of Scotland Group: The Human Capital Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Royal Bank of Scotland Group: The Human Capital Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Royal Bank of Scotland Group: The Human Capital Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Human Aitken needs to make to build a sustainable competitive advantage.