Two Big Banks' Broken Back Office SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Two Big Banks' Broken Back Office
Six months into the merger of two global money-center banks, Megan Richards, the new bank's foreign exchange sales manager, is trying to retain her client base in light of the bank's inability to deliver foreign currency in a timely manner. The target banks' inferior systems were chosen for political reasons, major corporate clients are calling Megan with their demands and complaints about breakdowns, and Megan is denied support from her boss, vice chairman in charge of Global Capital Markets. Purpose of the case is to introduce operational and political challenges of post-merger integration, especially as they confront front-line middle managers. (We use the case to open our PMI course.)
Swot Analysis of "Two Big Banks' Broken Back Office" written by L.J. Bourgeois, Margaret Cording includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Megan Banks facing as an external strategic factors. Some of the topics covered in Two Big Banks' Broken Back Office case study are - Strategic Management Strategies, Financial management, Government and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Two Big Banks' Broken Back Office casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Two Big Banks' Broken Back Office
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Two Big Banks' Broken Back Office case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Megan Banks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Megan Banks 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 Two Big Banks' Broken Back Office can be done for the following purposes –
1. Strategic planning using facts provided in Two Big Banks' Broken Back Office case study
2. Improving business portfolio management of Megan Banks
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 Megan Banks
Strengths Two Big Banks' Broken Back Office | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Megan Banks in Two Big Banks' Broken Back Office Harvard Business Review case study are -
Strong track record of project management
– Megan Banks is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Megan Banks in the sector have low bargaining power. Two Big Banks' Broken Back Office has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Megan Banks to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Megan Banks is one of the leading recruiters in the industry. Managers in the Two Big Banks' Broken Back Office are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Megan Banks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Megan Banks 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.
Analytics focus
– Megan Banks 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 L.J. Bourgeois, Margaret Cording 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.
Diverse revenue streams
– Megan Banks is present in almost all the verticals within the industry. This has provided firm in Two Big Banks' Broken Back Office 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.
Learning organization
- Megan Banks 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 Megan Banks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Two Big Banks' Broken Back Office Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Megan Banks has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Megan Banks to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Megan Banks 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.
High switching costs
– The high switching costs that Megan Banks 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.
Training and development
– Megan Banks has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Two Big Banks' Broken Back Office 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.
Superior customer experience
– The customer experience strategy of Megan Banks in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Two Big Banks' Broken Back Office | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Two Big Banks' Broken Back Office are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Two Big Banks' Broken Back Office, it seems that the employees of Megan Banks 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Two Big Banks' Broken Back Office, in the dynamic environment Megan Banks has struggled to respond to the nimble upstart competition. Megan Banks has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Megan Banks is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Two Big Banks' Broken Back Office can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, L.J. Bourgeois, Margaret Cording suggests that, Megan Banks 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.
Products dominated business model
– Even though Megan Banks 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 - Two Big Banks' Broken Back Office should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Megan Banks 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.
No frontier risks strategy
– After analyzing the HBR case study Two Big Banks' Broken Back Office, 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Two Big Banks' Broken Back Office, is just above the industry average. Megan Banks needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 Megan Banks supply chain. Even after few cautionary changes mentioned in the HBR case study - Two Big Banks' Broken Back Office, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Megan Banks vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Megan Banks, firm in the HBR case study Two Big Banks' Broken Back Office needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Two Big Banks' Broken Back Office has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Megan Banks 's lucrative customers.
Opportunities Two Big Banks' Broken Back Office | 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 Two Big Banks' Broken Back Office are -
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 Megan Banks in the consumer business. Now Megan Banks can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Megan Banks 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, Two Big Banks' Broken Back Office, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Megan Banks to increase its market reach. Megan Banks 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Megan Banks can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Megan Banks 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Megan Banks can use these opportunities to build new business models that can help the communities that Megan Banks operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Using analytics as competitive advantage
– Megan Banks 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 Two Big Banks' Broken Back Office - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Megan Banks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Megan Banks 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Megan Banks is facing challenges because of the dominance of functional experts in the organization. Two Big Banks' Broken Back Office 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Megan Banks 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. Megan Banks 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.
Learning at scale
– Online learning technologies has now opened space for Megan Banks 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. Megan Banks can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Megan Banks has opened avenues for new revenue streams for the organization in the industry. This can help Megan Banks to build a more holistic ecosystem as suggested in the Two Big Banks' Broken Back Office case study. Megan Banks can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Two Big Banks' Broken Back Office External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Two Big Banks' Broken Back Office are -
Regulatory challenges
– Megan Banks 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Two Big Banks' Broken Back Office, Megan Banks 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 .
Environmental challenges
– Megan Banks 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. Megan Banks can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Megan Banks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Megan Banks in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Megan Banks 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.
Consumer confidence and its impact on Megan Banks 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.
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. Megan Banks needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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
– Megan Banks 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.
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. Megan Banks can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Megan Banks
– 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 Megan Banks.
Weighted SWOT Analysis of Two Big Banks' Broken Back Office 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 Two Big Banks' Broken Back Office 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 Two Big Banks' Broken Back Office 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 Two Big Banks' Broken Back Office 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 Two Big Banks' Broken Back Office 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 Megan Banks needs to make to build a sustainable competitive advantage.
