Case Study Description of Bancaja: Developing Customer Intelligence (A)
In 1996, CEO Fernando Garcia Checa wanted to make customer analytics a part of Bancaja's new strategy. Bancaja, a savings bank based in Valencia, Spain, was expanding and wanted to exploit customer information to increase commercial effectiveness. At the same time, it was pushing for innovation in the nascent Spanish credit card market. To avoid the considerable investments of time and money that a large-scale customer relationship management (CRM) project would require, the bank decided to explore its benefits with a smaller pilot project. It appointed a CRM project team to design and implement a project focused on credit cards. Describes the challenges of the Spanish credit card market at the time, the methods for profiling credit card customers, and the variables involved in designing an optimal credit card. Concludes with a consideration of the decisions the CRM team had to make in designing the project, including whether to use conjoint analysis or implement a mini campaign.
Authors :: F. Asis Martinez-Jerez, Katherine Miller
Swot Analysis of "Bancaja: Developing Customer Intelligence (A)" written by F. Asis Martinez-Jerez, Katherine Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Card Credit facing as an external strategic factors. Some of the topics covered in Bancaja: Developing Customer Intelligence (A) case study are - Strategic Management Strategies, Customer service, Customers and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Bancaja: Developing Customer Intelligence (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing commodity prices, increasing household debt because of falling income levels,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Bancaja: Developing Customer Intelligence (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bancaja: Developing Customer Intelligence (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Card Credit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Card Credit 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 Bancaja: Developing Customer Intelligence (A) can be done for the following purposes –
1. Strategic planning using facts provided in Bancaja: Developing Customer Intelligence (A) case study
2. Improving business portfolio management of Card Credit
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Card Credit
Strengths Bancaja: Developing Customer Intelligence (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Card Credit in Bancaja: Developing Customer Intelligence (A) Harvard Business Review case study are -
Ability to recruit top talent
– Card Credit is one of the leading recruiters in the industry. Managers in the Bancaja: Developing Customer Intelligence (A) 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 Sales & Marketing field
– Card Credit 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 Card Credit in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Card Credit has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Bancaja: Developing Customer Intelligence (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Card Credit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Card Credit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Card Credit 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 Card Credit is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bancaja: Developing Customer Intelligence (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Sales & Marketing industry
– Bancaja: Developing Customer Intelligence (A) firm has clearly differentiated products in the market place. This has enabled Card Credit to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Card Credit to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Card Credit in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Card Credit 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 F. Asis Martinez-Jerez, Katherine Miller 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.
High switching costs
– The high switching costs that Card Credit 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.
Low bargaining power of suppliers
– Suppliers of Card Credit in the sector have low bargaining power. Bancaja: Developing Customer Intelligence (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Card Credit to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Card Credit
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Card Credit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Card Credit 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 Bancaja: Developing Customer Intelligence (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Bancaja: Developing Customer Intelligence (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bancaja: Developing Customer Intelligence (A) are -
Aligning sales with marketing
– It come across in the case study Bancaja: Developing Customer Intelligence (A) 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 Bancaja: Developing Customer Intelligence (A) can leverage the sales team experience to cultivate customer relationships as Card Credit is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Asis Martinez-Jerez, Katherine Miller suggests that, Card Credit 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.
Slow to strategic competitive environment developments
– As Bancaja: Developing Customer Intelligence (A) HBR case study mentions - Card Credit 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 Bancaja: Developing Customer Intelligence (A), it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Skills based hiring
– The stress on hiring functional specialists at Card Credit 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.
Slow decision making process
– As mentioned earlier in the report, Card Credit 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. Card Credit 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Card Credit 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.
High cash cycle compare to competitors
Card Credit 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.
Interest costs
– Compare to the competition, Card Credit 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.
Lack of clear differentiation of Card Credit products
– To increase the profitability and margins on the products, Card Credit needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bancaja: Developing Customer Intelligence (A), in the dynamic environment Card Credit has struggled to respond to the nimble upstart competition. Card Credit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Bancaja: Developing Customer Intelligence (A) | 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 Bancaja: Developing Customer Intelligence (A) are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Card Credit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Card Credit 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Card Credit is facing challenges because of the dominance of functional experts in the organization. Bancaja: Developing Customer Intelligence (A) 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.
Building a culture of innovation
– managers at Card Credit 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 Sales & Marketing segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Card Credit 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, Bancaja: Developing Customer Intelligence (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Card Credit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bancaja: Developing Customer Intelligence (A) 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Card Credit can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Card Credit can develop new processes and procedures in Sales & Marketing 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.
Using analytics as competitive advantage
– Card Credit 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 Bancaja: Developing Customer Intelligence (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Card Credit to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Card Credit 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.
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. Card Credit can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Card Credit has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 Card Credit in the consumer business. Now Card Credit can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Bancaja: Developing Customer Intelligence (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bancaja: Developing Customer Intelligence (A) are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Card Credit 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 Bancaja: Developing Customer Intelligence (A) .
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. Card Credit needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Card Credit 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bancaja: Developing Customer Intelligence (A), Card Credit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing wage structure of Card Credit
– 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 Card Credit.
Technology acceleration in Forth Industrial Revolution
– Card Credit has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Card Credit needs to keep up with the evolution of technology in the Sales & Marketing 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.
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 Card Credit in the Sales & Marketing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Card Credit 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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Card Credit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Card Credit 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. Card Credit can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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. Card Credit 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.
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 Card Credit business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Bancaja: Developing Customer Intelligence (A) 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 Bancaja: Developing Customer Intelligence (A) 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 Bancaja: Developing Customer Intelligence (A) 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 Bancaja: Developing Customer Intelligence (A) 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 Bancaja: Developing Customer Intelligence (A) 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 Card Credit needs to make to build a sustainable competitive advantage.