Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships
Hang Seng Bank is the second-largest locally incorporated bank and the fifth-largest public company in Hong Kong. Due to growing consumer demand, peer pressure, and pressure to improve profits, Hang Seng launched e-banking in August 2000. This case provides a study of why Hang Seng accelerated its online banking strategies, critical issues in its implementation of strategies, and how Hang Seng is differentiating its online banking from that of other banks. Hang Seng has been serving customers throughout Hong Kong since 1933; it has been regarded as a reliable and traditional community bank. Discusses how e-banking is helping Hang Seng to strengthen its new image as a contemporary and progressive bank. The case also presents the issue of how to measure the profitability of online banking and/or technology investment.
Swot Analysis of "Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships" written by Julie Yu, Marissa McCauley, Shamza Khan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Seng Hang facing as an external strategic factors. Some of the topics covered in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships casestudy better are - – cloud computing is disrupting traditional business models, technology disruption, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seng Hang, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seng Hang 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships can be done for the following purposes –
1. Strategic planning using facts provided in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships case study
2. Improving business portfolio management of Seng Hang
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 Seng Hang
Strengths Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seng Hang in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships Harvard Business Review case study are -
Successful track record of launching new products
– Seng Hang has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Seng Hang 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.
Diverse revenue streams
– Seng Hang is present in almost all the verticals within the industry. This has provided firm in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Seng Hang digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Seng Hang 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.
Learning organization
- Seng Hang 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 Seng Hang is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Seng Hang is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Seng Hang 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.
Cross disciplinary teams
– Horizontal connected teams at the Seng Hang 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.
Effective Research and Development (R&D)
– Seng Hang has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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.
Training and development
– Seng Hang has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Seng Hang in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Seng Hang in the sector have low bargaining power. Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seng Hang to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships are -
Interest costs
– Compare to the competition, Seng Hang has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Lack of clear differentiation of Seng Hang products
– To increase the profitability and margins on the products, Seng Hang needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Seng Hang 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships, it seems that the employees of Seng Hang 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.
Slow to strategic competitive environment developments
– As Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships HBR case study mentions - Seng Hang 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships, in the dynamic environment Seng Hang has struggled to respond to the nimble upstart competition. Seng Hang has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Seng Hang has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Seng Hang has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Low market penetration in new markets
– Outside its home market of Seng Hang, firm in the HBR case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships can leverage the sales team experience to cultivate customer relationships as Seng Hang is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Seng Hang 's lucrative customers.
Opportunities Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships | 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships are -
Buying journey improvements
– Seng Hang can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seng Hang 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Seng Hang to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Seng Hang to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Seng Hang has opened avenues for new revenue streams for the organization in the industry. This can help Seng Hang to build a more holistic ecosystem as suggested in the Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships case study. Seng Hang can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Seng Hang 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.
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. Seng Hang can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Seng Hang can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Seng Hang can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Seng Hang 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.
Using analytics as competitive advantage
– Seng Hang 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Seng Hang to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Seng Hang is facing challenges because of the dominance of functional experts in the organization. Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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. Seng Hang 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. Seng Hang 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Seng Hang 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, Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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.
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.
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. Seng Hang can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Seng Hang 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. Seng Hang can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Increasing wage structure of Seng Hang
– 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 Seng Hang.
Shortening product life cycle
– it is one of the major threat that Seng Hang is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Seng Hang 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.
Stagnating economy with rate increase
– Seng Hang 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.
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. Seng Hang 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.
Regulatory challenges
– Seng Hang 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships, Seng Hang 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Seng Hang 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Seng Hang business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Hang Seng Bank's e-Banking: Leveraging an Established Brand for New Relationships 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 Seng Hang needs to make to build a sustainable competitive advantage.
