Santander's Acquisition of Abbey: Banking Across Borders SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Santander's Acquisition of Abbey: Banking Across Borders
Banco Santander, Spain's largest commercial bank, announced in July 2004 the acquisition of Abbey National Bank, the fifth largest U.K. commercial bank. This transaction was the largest ever cross-border acquisition in European banking and would result in the 10th-largest bank in the world. Discusses the main sources of value creation from international expansion and acquisitions in the commercial banking industry. Also, highlights the barriers to integration within the single market of the European Union in a regulated service industry such as commercial banking.
Authors :: Pankaj Ghemawat, Eduardo Ballarin, Jose Manuel Campa
Swot Analysis of "Santander's Acquisition of Abbey: Banking Across Borders" written by Pankaj Ghemawat, Eduardo Ballarin, Jose Manuel Campa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banking Abbey facing as an external strategic factors. Some of the topics covered in Santander's Acquisition of Abbey: Banking Across Borders case study are - Strategic Management Strategies, Growth strategy, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Santander's Acquisition of Abbey: Banking Across Borders casestudy better are - – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing energy prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Santander's Acquisition of Abbey: Banking Across Borders
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Santander's Acquisition of Abbey: Banking Across Borders case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banking Abbey, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banking Abbey 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 Santander's Acquisition of Abbey: Banking Across Borders can be done for the following purposes –
1. Strategic planning using facts provided in Santander's Acquisition of Abbey: Banking Across Borders case study
2. Improving business portfolio management of Banking Abbey
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Banking Abbey
Strengths Santander's Acquisition of Abbey: Banking Across Borders | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banking Abbey in Santander's Acquisition of Abbey: Banking Across Borders Harvard Business Review case study are -
Organizational Resilience of Banking Abbey
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Banking Abbey does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Banking Abbey is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Banking Abbey in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Banking Abbey has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Santander's Acquisition of Abbey: Banking Across Borders 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
– Banking Abbey has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Banking Abbey 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.
Operational resilience
– The operational resilience strategy in the Santander's Acquisition of Abbey: Banking Across Borders 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.
Diverse revenue streams
– Banking Abbey is present in almost all the verticals within the industry. This has provided firm in Santander's Acquisition of Abbey: Banking Across Borders 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.
Innovation driven organization
– Banking Abbey is one of the most innovative firm in sector. Manager in Santander's Acquisition of Abbey: Banking Across Borders Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Banking Abbey 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Santander's Acquisition of Abbey: Banking Across Borders firm has clearly differentiated products in the market place. This has enabled Banking Abbey to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Banking Abbey to invest into research and development (R&D) and innovation.
Learning organization
- Banking Abbey 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 Banking Abbey is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Santander's Acquisition of Abbey: Banking Across Borders Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Strategy & Execution field
– Banking Abbey 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 Banking Abbey in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Santander's Acquisition of Abbey: Banking Across Borders | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Santander's Acquisition of Abbey: Banking Across Borders are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Santander's Acquisition of Abbey: Banking Across Borders 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 Banking Abbey has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Banking Abbey 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Santander's Acquisition of Abbey: Banking Across Borders, it seems that the employees of Banking Abbey 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.
Aligning sales with marketing
– It come across in the case study Santander's Acquisition of Abbey: Banking Across Borders 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 Santander's Acquisition of Abbey: Banking Across Borders can leverage the sales team experience to cultivate customer relationships as Banking Abbey is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Banking Abbey 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.
No frontier risks strategy
– After analyzing the HBR case study Santander's Acquisition of Abbey: Banking Across Borders, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Products dominated business model
– Even though Banking Abbey 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 - Santander's Acquisition of Abbey: Banking Across Borders should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Banking Abbey 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.
Need for greater diversity
– Banking Abbey 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.
Slow to strategic competitive environment developments
– As Santander's Acquisition of Abbey: Banking Across Borders HBR case study mentions - Banking Abbey 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Pankaj Ghemawat, Eduardo Ballarin, Jose Manuel Campa suggests that, Banking Abbey 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.
Opportunities Santander's Acquisition of Abbey: Banking Across Borders | 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 Santander's Acquisition of Abbey: Banking Across Borders are -
Using analytics as competitive advantage
– Banking Abbey 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 Santander's Acquisition of Abbey: Banking Across Borders - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Banking Abbey to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Banking Abbey can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Banking Abbey 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.
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 Banking Abbey in the consumer business. Now Banking Abbey can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Banking Abbey can develop new processes and procedures in Strategy & Execution 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.
Creating value in data economy
– The success of analytics program of Banking Abbey has opened avenues for new revenue streams for the organization in the industry. This can help Banking Abbey to build a more holistic ecosystem as suggested in the Santander's Acquisition of Abbey: Banking Across Borders case study. Banking Abbey can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Banking Abbey in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Banking Abbey can use these opportunities to build new business models that can help the communities that Banking Abbey operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Banking Abbey 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 Strategy & Execution segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Banking Abbey 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, Santander's Acquisition of Abbey: Banking Across Borders, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Banking Abbey 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Banking Abbey is facing challenges because of the dominance of functional experts in the organization. Santander's Acquisition of Abbey: Banking Across Borders 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.
Loyalty marketing
– Banking Abbey 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.
Threats Santander's Acquisition of Abbey: Banking Across Borders External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Santander's Acquisition of Abbey: Banking Across Borders are -
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 Banking Abbey.
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. Banking Abbey 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.
Environmental challenges
– Banking Abbey 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. Banking Abbey can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Banking Abbey can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
High dependence on third party suppliers
– Banking Abbey 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.
Increasing wage structure of Banking Abbey
– 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 Banking Abbey.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Banking Abbey 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 Santander's Acquisition of Abbey: Banking Across Borders .
Consumer confidence and its impact on Banking Abbey 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.
Regulatory challenges
– Banking Abbey needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Stagnating economy with rate increase
– Banking Abbey 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Banking Abbey with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Santander's Acquisition of Abbey: Banking Across Borders, Banking Abbey may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Santander's Acquisition of Abbey: Banking Across Borders 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 Santander's Acquisition of Abbey: Banking Across Borders 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 Santander's Acquisition of Abbey: Banking Across Borders 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 Santander's Acquisition of Abbey: Banking Across Borders 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 Santander's Acquisition of Abbey: Banking Across Borders 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 Banking Abbey needs to make to build a sustainable competitive advantage.
