Case Study Description of Garanti Bank: Transformation in Turkey
Discusses the complete transformation and turnover in every division of Garanti Bank. Describes the multiple change projects managed and cross-cultural issues confronted during the 1990s and the organizational challenge of transforming Garanti Bank into one of Turkey's premier financial institutions.
Authors :: Rosabeth Moss Kanter, Daniel Galvin, Maximilian Martin
Swot Analysis of "Garanti Bank: Transformation in Turkey" written by Rosabeth Moss Kanter, Daniel Galvin, Maximilian Martin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Garanti Bank facing as an external strategic factors. Some of the topics covered in Garanti Bank: Transformation in Turkey case study are - Strategic Management Strategies, Cross-cultural management and Organizational Development.
Some of the macro environment factors that can be used to understand the Garanti Bank: Transformation in Turkey casestudy better are - – increasing transportation and logistics costs, increasing energy prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Garanti Bank: Transformation in Turkey
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Garanti Bank: Transformation in Turkey case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Garanti Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Garanti Bank 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 Garanti Bank: Transformation in Turkey can be done for the following purposes –
1. Strategic planning using facts provided in Garanti Bank: Transformation in Turkey case study
2. Improving business portfolio management of Garanti Bank
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 Garanti Bank
Strengths Garanti Bank: Transformation in Turkey | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Garanti Bank in Garanti Bank: Transformation in Turkey Harvard Business Review case study are -
Organizational Resilience of Garanti Bank
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Garanti Bank does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Garanti Bank: Transformation in Turkey 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.
Low bargaining power of suppliers
– Suppliers of Garanti Bank in the sector have low bargaining power. Garanti Bank: Transformation in Turkey has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Garanti Bank to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Garanti Bank 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 Garanti Bank is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Garanti Bank: Transformation in Turkey Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Garanti Bank 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Garanti Bank digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Garanti Bank 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
– Garanti Bank is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Garanti Bank is present in almost all the verticals within the industry. This has provided firm in Garanti Bank: Transformation in Turkey 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.
Ability to recruit top talent
– Garanti Bank is one of the leading recruiters in the industry. Managers in the Garanti Bank: Transformation in Turkey are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Organizational Development industry
– Garanti Bank: Transformation in Turkey firm has clearly differentiated products in the market place. This has enabled Garanti Bank to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Garanti Bank to invest into research and development (R&D) and innovation.
Training and development
– Garanti Bank has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Garanti Bank: Transformation in Turkey 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.
Successful track record of launching new products
– Garanti Bank has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Garanti Bank 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.
Weaknesses Garanti Bank: Transformation in Turkey | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Garanti Bank: Transformation in Turkey are -
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 Garanti Bank supply chain. Even after few cautionary changes mentioned in the HBR case study - Garanti Bank: Transformation in Turkey, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Garanti Bank vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Garanti Bank 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 - Garanti Bank: Transformation in Turkey should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Garanti Bank: Transformation in Turkey HBR case study mentions - Garanti Bank takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Garanti Bank: Transformation in Turkey, 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Garanti Bank: Transformation in Turkey 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 Garanti Bank has relatively successful track record of launching new products.
High cash cycle compare to competitors
Garanti Bank 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.
Slow decision making process
– As mentioned earlier in the report, Garanti Bank 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. Garanti Bank 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, Garanti Bank is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Garanti Bank: Transformation in Turkey can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Garanti Bank 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Garanti Bank: Transformation in Turkey, in the dynamic environment Garanti Bank has struggled to respond to the nimble upstart competition. Garanti Bank has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Garanti Bank has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Garanti Bank: Transformation in Turkey | 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 Garanti Bank: Transformation in Turkey are -
Creating value in data economy
– The success of analytics program of Garanti Bank has opened avenues for new revenue streams for the organization in the industry. This can help Garanti Bank to build a more holistic ecosystem as suggested in the Garanti Bank: Transformation in Turkey case study. Garanti Bank can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Garanti Bank can use these opportunities to build new business models that can help the communities that Garanti Bank operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Garanti Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Garanti Bank can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Garanti Bank: Transformation in Turkey suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. Garanti Bank can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Garanti Bank 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.
Learning at scale
– Online learning technologies has now opened space for Garanti Bank to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Low interest rates
– Even though inflation is raising its head in most developed economies, Garanti Bank 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.
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. Garanti Bank can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Garanti Bank in the consumer business. Now Garanti Bank can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Garanti Bank 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Garanti Bank 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.
Developing new processes and practices
– Garanti Bank can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Threats Garanti Bank: Transformation in Turkey External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Garanti Bank: Transformation in Turkey are -
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.
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.
Increasing wage structure of Garanti Bank
– 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 Garanti Bank.
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 Garanti Bank business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Garanti Bank can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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. Garanti Bank can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Garanti Bank has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Garanti Bank 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.
Environmental challenges
– Garanti Bank 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. Garanti Bank can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Shortening product life cycle
– it is one of the major threat that Garanti Bank is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Garanti Bank in the Organizational Development sector and impact the bottomline of the organization.
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 Garanti Bank.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Garanti Bank 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 Garanti Bank: Transformation in Turkey .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Garanti Bank with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Garanti Bank: Transformation in Turkey 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 Garanti Bank: Transformation in Turkey 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 Garanti Bank: Transformation in Turkey 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 Garanti Bank: Transformation in Turkey 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 Garanti Bank: Transformation in Turkey 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 Garanti Bank needs to make to build a sustainable competitive advantage.
