Bank of America and the Chinese Credit Card Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bank of America and the Chinese Credit Card Market
This case addresses Bank of America Corporation's contemplated joint venture with China Construction Bank to enter the Chinese credit card market. The case builds on the questions of strategic alliances in foreign markets and the state of the banking and credit industries in China generally. The teaching purposes include 1) understanding the transferability of a business model to a foreign market and assessing the implications of the political, economic, social and technological environment on a firm's strategy in that market; 2) understanding the institutional context of business in a foreign country - specifically the regulatory aspects of the banking industry in China; 3) exploring the cultural implications for business decisions, and the need to understand the nuances of the business model while translating it to radically unfamiliar environments; and 4) understanding the role that local partners play in joint ventures and exploring some aspects of partnering strategies in overcoming institutional handicaps.
Authors :: Charles Dhanaraj, Jing Li, Justin W. Evans
Swot Analysis of "Bank of America and the Chinese Credit Card Market" written by Charles Dhanaraj, Jing Li, Justin W. Evans includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Credit Foreign facing as an external strategic factors. Some of the topics covered in Bank of America and the Chinese Credit Card Market case study are - Strategic Management Strategies, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Bank of America and the Chinese Credit Card Market casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing transportation and logistics costs, there is increasing trade war between United States & China,
there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Bank of America and the Chinese Credit Card Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bank of America and the Chinese Credit Card Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Credit Foreign, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Credit Foreign 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 Bank of America and the Chinese Credit Card Market can be done for the following purposes –
1. Strategic planning using facts provided in Bank of America and the Chinese Credit Card Market case study
2. Improving business portfolio management of Credit Foreign
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 Credit Foreign
Strengths Bank of America and the Chinese Credit Card Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Credit Foreign in Bank of America and the Chinese Credit Card Market Harvard Business Review case study are -
Strong track record of project management
– Credit Foreign is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Credit Foreign digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Credit Foreign 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.
Successful track record of launching new products
– Credit Foreign has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Credit Foreign 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.
Innovation driven organization
– Credit Foreign is one of the most innovative firm in sector. Manager in Bank of America and the Chinese Credit Card Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Strategy & Execution industry
– Bank of America and the Chinese Credit Card Market firm has clearly differentiated products in the market place. This has enabled Credit Foreign to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Credit Foreign to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Credit Foreign 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 Bank of America and the Chinese Credit Card Market HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Credit Foreign 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.
Learning organization
- Credit Foreign 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 Credit Foreign is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bank of America and the Chinese Credit Card Market Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Credit Foreign in the sector have low bargaining power. Bank of America and the Chinese Credit Card Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Credit Foreign to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Credit Foreign is present in almost all the verticals within the industry. This has provided firm in Bank of America and the Chinese Credit Card Market 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.
Training and development
– Credit Foreign has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bank of America and the Chinese Credit Card Market 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.
Organizational Resilience of Credit Foreign
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Credit Foreign does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Bank of America and the Chinese Credit Card Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bank of America and the Chinese Credit Card Market are -
Slow to strategic competitive environment developments
– As Bank of America and the Chinese Credit Card Market HBR case study mentions - Credit Foreign 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.
Products dominated business model
– Even though Credit Foreign 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 - Bank of America and the Chinese Credit Card Market should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Credit Foreign, firm in the HBR case study Bank of America and the Chinese Credit Card Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Charles Dhanaraj, Jing Li, Justin W. Evans suggests that, Credit Foreign 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.
Increasing silos among functional specialists
– The organizational structure of Credit Foreign is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Credit Foreign needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Credit Foreign to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Credit Foreign supply chain. Even after few cautionary changes mentioned in the HBR case study - Bank of America and the Chinese Credit Card Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Credit Foreign vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Bank of America and the Chinese Credit Card Market 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 Credit Foreign 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Bank of America and the Chinese Credit Card Market 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 Bank of America and the Chinese Credit Card Market can leverage the sales team experience to cultivate customer relationships as Credit Foreign is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Credit Foreign is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bank of America and the Chinese Credit Card Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Credit Foreign 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.
Lack of clear differentiation of Credit Foreign products
– To increase the profitability and margins on the products, Credit Foreign needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Bank of America and the Chinese Credit Card Market | 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 Bank of America and the Chinese Credit Card Market are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Credit Foreign can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Credit Foreign can use these opportunities to build new business models that can help the communities that Credit Foreign operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Credit Foreign to increase its market reach. Credit Foreign 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.
Manufacturing automation
– Credit Foreign can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Credit Foreign has opened avenues for new revenue streams for the organization in the industry. This can help Credit Foreign to build a more holistic ecosystem as suggested in the Bank of America and the Chinese Credit Card Market case study. Credit Foreign can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Credit Foreign 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.
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 Credit Foreign in the consumer business. Now Credit Foreign can target international markets with far fewer capital restrictions requirements than the existing system.
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. Credit Foreign can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Credit Foreign 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.
Leveraging digital technologies
– Credit Foreign 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Credit Foreign 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.
Buying journey improvements
– Credit Foreign can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bank of America and the Chinese Credit Card Market 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.
Developing new processes and practices
– Credit Foreign 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.
Threats Bank of America and the Chinese Credit Card Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bank of America and the Chinese Credit Card Market are -
Regulatory challenges
– Credit Foreign 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.
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 Credit Foreign.
Shortening product life cycle
– it is one of the major threat that Credit Foreign is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Credit Foreign 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
– Credit Foreign 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. Credit Foreign can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Credit Foreign has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Credit Foreign needs to keep up with the evolution of technology in the Strategy & Execution 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.
Increasing wage structure of Credit Foreign
– 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 Credit Foreign.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Credit Foreign with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Credit Foreign 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
– Credit Foreign 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.
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Credit Foreign 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 Bank of America and the Chinese Credit Card Market .
Weighted SWOT Analysis of Bank of America and the Chinese Credit Card Market 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 Bank of America and the Chinese Credit Card Market 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 Bank of America and the Chinese Credit Card Market 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 Bank of America and the Chinese Credit Card Market 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 Bank of America and the Chinese Credit Card Market 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 Credit Foreign needs to make to build a sustainable competitive advantage.