Umpqua Bank: Managing the Culture and Implementing the Brand SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Umpqua Bank: Managing the Culture and Implementing the Brand
Umpqua Bank is an Oregon-based business that is attempting to revolutionize the banking industry with a creatively nontraditional culture and a radically retail mindset ("stores" not "branches"), supported by an highly innovative environmental design. Umpqua has grown rapidly and faces critical issues, including: (1) How can an organization strengthen and maintain its culture while undergoing rapid growth by merger and acquisition? Specifically, how can this service organization, a quirky bank with a distinctive culture, incorporate and retrain hundreds of new employees from traditional banks? And (2) What role does the design of the total environment ("experience design") play in nurturing and maintaining an organization's culture and its brand expression, and how much should it invest in this form of brand expression? Presents two examples and asks how this bank should deal with the issue of cost vs. value of design in each of them.
Swot Analysis of "Umpqua Bank: Managing the Culture and Implementing the Brand" written by Karen J. Freeze includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Umpqua Culture facing as an external strategic factors. Some of the topics covered in Umpqua Bank: Managing the Culture and Implementing the Brand case study are - Strategic Management Strategies, Creativity, Design, Financial analysis, Organizational culture, Supply chain and Organizational Development.
Some of the macro environment factors that can be used to understand the Umpqua Bank: Managing the Culture and Implementing the Brand casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, wage bills are increasing,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Umpqua Bank: Managing the Culture and Implementing the Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Umpqua Bank: Managing the Culture and Implementing the Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Umpqua Culture, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Umpqua Culture 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 Umpqua Bank: Managing the Culture and Implementing the Brand can be done for the following purposes –
1. Strategic planning using facts provided in Umpqua Bank: Managing the Culture and Implementing the Brand case study
2. Improving business portfolio management of Umpqua Culture
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 Umpqua Culture
Strengths Umpqua Bank: Managing the Culture and Implementing the Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Umpqua Culture in Umpqua Bank: Managing the Culture and Implementing the Brand Harvard Business Review case study are -
Learning organization
- Umpqua Culture 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 Umpqua Culture is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Umpqua Bank: Managing the Culture and Implementing the Brand Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Umpqua Culture is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Karen J. Freeze can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Umpqua Culture in the sector have low bargaining power. Umpqua Bank: Managing the Culture and Implementing the Brand has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Umpqua Culture to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Umpqua Culture 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Umpqua Culture digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Umpqua Culture 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.
Effective Research and Development (R&D)
– Umpqua Culture has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Umpqua Bank: Managing the Culture and Implementing the Brand - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Umpqua Culture has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Umpqua Bank: Managing the Culture and Implementing the Brand 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.
Diverse revenue streams
– Umpqua Culture is present in almost all the verticals within the industry. This has provided firm in Umpqua Bank: Managing the Culture and Implementing the Brand 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.
Operational resilience
– The operational resilience strategy in the Umpqua Bank: Managing the Culture and Implementing the Brand Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Umpqua Culture is one of the leading recruiters in the industry. Managers in the Umpqua Bank: Managing the Culture and Implementing the Brand are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Organizational Development field
– Umpqua Culture 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 Umpqua Culture in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Umpqua Culture is one of the most innovative firm in sector. Manager in Umpqua Bank: Managing the Culture and Implementing the Brand Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Umpqua Bank: Managing the Culture and Implementing the Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Umpqua Bank: Managing the Culture and Implementing the Brand are -
Aligning sales with marketing
– It come across in the case study Umpqua Bank: Managing the Culture and Implementing the Brand 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 Umpqua Bank: Managing the Culture and Implementing the Brand can leverage the sales team experience to cultivate customer relationships as Umpqua Culture is planning to shift buying processes online.
Interest costs
– Compare to the competition, Umpqua Culture has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Products dominated business model
– Even though Umpqua Culture has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Umpqua Bank: Managing the Culture and Implementing the Brand should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Umpqua Culture has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Umpqua Bank: Managing the Culture and Implementing the Brand, it seems that the employees of Umpqua Culture don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Umpqua Culture products
– To increase the profitability and margins on the products, Umpqua Culture needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Karen J. Freeze suggests that, Umpqua Culture is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Workers concerns about automation
– As automation is fast increasing in the segment, Umpqua Culture needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Umpqua Culture is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Umpqua Culture needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Umpqua Culture to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Umpqua Culture supply chain. Even after few cautionary changes mentioned in the HBR case study - Umpqua Bank: Managing the Culture and Implementing the Brand, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Umpqua Culture vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Umpqua Culture 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.
Opportunities Umpqua Bank: Managing the Culture and Implementing the Brand | 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 Umpqua Bank: Managing the Culture and Implementing the Brand are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Umpqua Culture 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.
Building a culture of innovation
– managers at Umpqua Culture 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Umpqua Culture is facing challenges because of the dominance of functional experts in the organization. Umpqua Bank: Managing the Culture and Implementing the Brand 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.
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 Umpqua Culture 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Umpqua Culture 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 Umpqua Culture 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.
Leveraging digital technologies
– Umpqua Culture can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Umpqua Culture can use these opportunities to build new business models that can help the communities that Umpqua Culture operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Creating value in data economy
– The success of analytics program of Umpqua Culture has opened avenues for new revenue streams for the organization in the industry. This can help Umpqua Culture to build a more holistic ecosystem as suggested in the Umpqua Bank: Managing the Culture and Implementing the Brand case study. Umpqua Culture can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Umpqua Culture 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. Umpqua Culture 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.
Better consumer reach
– The expansion of the 5G network will help Umpqua Culture to increase its market reach. Umpqua Culture 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Umpqua Culture can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Umpqua Bank: Managing the Culture and Implementing the Brand, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Umpqua Culture has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Umpqua Bank: Managing the Culture and Implementing the Brand - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Umpqua Culture to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Umpqua Bank: Managing the Culture and Implementing the Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Umpqua Bank: Managing the Culture and Implementing the Brand are -
Consumer confidence and its impact on Umpqua Culture demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Umpqua Culture is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Umpqua Culture 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.
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 Umpqua Culture.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Umpqua Culture in the Organizational Development sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Umpqua Culture 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 Umpqua Bank: Managing the Culture and Implementing the Brand .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Umpqua Culture needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Umpqua Culture with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Umpqua Culture
– 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 Umpqua Culture.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Umpqua Culture in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Umpqua Culture 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. Umpqua Culture can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
Weighted SWOT Analysis of Umpqua Bank: Managing the Culture and Implementing the Brand 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 Umpqua Bank: Managing the Culture and Implementing the Brand 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 Umpqua Bank: Managing the Culture and Implementing the Brand 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 Umpqua Bank: Managing the Culture and Implementing the Brand 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 Umpqua Bank: Managing the Culture and Implementing the Brand 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 Umpqua Culture needs to make to build a sustainable competitive advantage.