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 - – talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, wage bills are increasing,
increasing energy prices, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Credit Foreign in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous 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.
Ability to lead change in Strategy & Execution field
– Credit Foreign 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 Credit Foreign in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Ability to recruit top talent
– Credit Foreign is one of the leading recruiters in the industry. Managers in the Bank of America and the Chinese Credit Card Market are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Credit Foreign 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.
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.
High brand equity
– Credit Foreign has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Credit Foreign to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Bank of America and the Chinese Credit Card Market 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 Credit Foreign has relatively successful track record of launching new products.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bank of America and the Chinese Credit Card Market, in the dynamic environment Credit Foreign has struggled to respond to the nimble upstart competition. Credit Foreign has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High cash cycle compare to competitors
Credit Foreign has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Bank of America and the Chinese Credit Card Market, 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.
Skills based hiring
– The stress on hiring functional specialists at Credit Foreign 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.
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.
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 -
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.
Using analytics as competitive advantage
– Credit Foreign 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 Bank of America and the Chinese Credit Card Market - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Credit Foreign to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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. Credit Foreign 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. Credit Foreign 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Credit Foreign is facing challenges because of the dominance of functional experts in the organization. Bank of America and the Chinese Credit Card Market 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Credit Foreign 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, Bank of America and the Chinese Credit Card Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Credit Foreign 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.
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.
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 -
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.
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.
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 .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Credit Foreign in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
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.
Stagnating economy with rate increase
– Credit Foreign 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 Credit Foreign 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Bank of America and the Chinese Credit Card Market, Credit Foreign 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 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.