TowneBank: Of David and Goliaths SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of TowneBank: Of David and Goliaths
During the summer of 1998, Bob Aston and his partners, all bankers, spent many days discussing their plans to start a bank in the south-eastern region of Virginia, USA. Deregulation was transforming the banking industry. In Virginia, mergers and acquisitions in the industry had led to the emergence of large banks that had headquarters in other states. Aston felt that banking as he knew it was disappearing. However, before they could start a bank, Aston and partners faced many questions and decisions: How would they raise the capital? Who would the bank serve? How would they compete with the larger banks that had emerged due to the deregulation? The decisions they made at the founding had a lasting imprint on TowneBank. This became evident a decade later as financial institutions around the country experienced a severe crisis that was sparked by exposure to risky mortgages, while TowneBank remained relatively unscathed. However, the management team had to consider several issues as the crisis unfolded. Should they accept the Troubled Asset Relief Program (TARP) funds that the U.S. Treasury had offered to even banks that were unlikely to fail and were adequately capitalized? How could they ensure TowneBank's growth? Should they acquire distressed banks in the local market?
Swot Analysis of "TowneBank: Of David and Goliaths" written by Anil Nair, Joseph Trendowski includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Townebank Aston facing as an external strategic factors. Some of the topics covered in TowneBank: Of David and Goliaths case study are - Strategic Management Strategies, Financial management, Human resource management, Leadership, Organizational culture, Recession, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the TowneBank: Of David and Goliaths casestudy better are - – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, technology disruption, there is backlash against globalization, increasing energy prices, increasing transportation and logistics costs, increasing household debt because of falling income levels,
increasing commodity prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of TowneBank: Of David and Goliaths
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in TowneBank: Of David and Goliaths case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Townebank Aston, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Townebank Aston 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 TowneBank: Of David and Goliaths can be done for the following purposes –
1. Strategic planning using facts provided in TowneBank: Of David and Goliaths case study
2. Improving business portfolio management of Townebank Aston
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 Townebank Aston
Strengths TowneBank: Of David and Goliaths | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Townebank Aston in TowneBank: Of David and Goliaths Harvard Business Review case study are -
Learning organization
- Townebank Aston 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 Townebank Aston is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in TowneBank: Of David and Goliaths Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Townebank Aston has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Townebank Aston to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Townebank Aston 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 Anil Nair, Joseph Trendowski 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.
Ability to recruit top talent
– Townebank Aston is one of the leading recruiters in the industry. Managers in the TowneBank: Of David and Goliaths are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Townebank Aston has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in TowneBank: Of David and Goliaths Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Townebank Aston has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Townebank Aston 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Townebank Aston digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Townebank Aston 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.
Effective Research and Development (R&D)
– Townebank Aston 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 TowneBank: Of David and Goliaths - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Townebank Aston 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 TowneBank: Of David and Goliaths HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Townebank Aston in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Townebank Aston is one of the most innovative firm in sector. Manager in TowneBank: Of David and Goliaths Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Townebank Aston is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses TowneBank: Of David and Goliaths | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of TowneBank: Of David and Goliaths are -
Need for greater diversity
– Townebank Aston has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study TowneBank: Of David and Goliaths, it seems that the employees of Townebank Aston 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Anil Nair, Joseph Trendowski suggests that, Townebank Aston 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.
Aligning sales with marketing
– It come across in the case study TowneBank: Of David and Goliaths 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 TowneBank: Of David and Goliaths can leverage the sales team experience to cultivate customer relationships as Townebank Aston is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study TowneBank: Of David and Goliaths, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Townebank Aston is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study TowneBank: Of David and Goliaths 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, Townebank Aston 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.
Capital Spending Reduction
– Even during the low interest decade, Townebank Aston 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the TowneBank: Of David and Goliaths 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 Townebank Aston has relatively successful track record of launching new products.
Lack of clear differentiation of Townebank Aston products
– To increase the profitability and margins on the products, Townebank Aston needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Townebank Aston 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 - TowneBank: Of David and Goliaths should strive to include more intangible value offerings along with its core products and services.
Opportunities TowneBank: Of David and Goliaths | 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 TowneBank: Of David and Goliaths are -
Creating value in data economy
– The success of analytics program of Townebank Aston has opened avenues for new revenue streams for the organization in the industry. This can help Townebank Aston to build a more holistic ecosystem as suggested in the TowneBank: Of David and Goliaths case study. Townebank Aston can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Townebank Aston 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.
Learning at scale
– Online learning technologies has now opened space for Townebank Aston 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
– Townebank Aston 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 TowneBank: Of David and Goliaths - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Townebank Aston to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Townebank Aston can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Townebank Aston in the consumer business. Now Townebank Aston can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Townebank Aston 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.
Better consumer reach
– The expansion of the 5G network will help Townebank Aston to increase its market reach. Townebank Aston 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.
Loyalty marketing
– Townebank Aston has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Townebank Aston 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 Townebank Aston to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Townebank Aston is facing challenges because of the dominance of functional experts in the organization. TowneBank: Of David and Goliaths 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Townebank Aston can use these opportunities to build new business models that can help the communities that Townebank Aston operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Townebank Aston 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. Townebank Aston 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.
Threats TowneBank: Of David and Goliaths External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study TowneBank: Of David and Goliaths 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study TowneBank: Of David and Goliaths, Townebank Aston 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 .
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. Townebank Aston needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Townebank Aston business can come under increasing regulations regarding data privacy, data security, etc.
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. Townebank Aston 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.
Environmental challenges
– Townebank Aston 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. Townebank Aston can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Townebank Aston 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 Townebank Aston 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 Townebank Aston
– 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 Townebank Aston.
Technology acceleration in Forth Industrial Revolution
– Townebank Aston has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Townebank Aston 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.
Stagnating economy with rate increase
– Townebank Aston 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.
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 Townebank Aston in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of TowneBank: Of David and Goliaths 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 TowneBank: Of David and Goliaths 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 TowneBank: Of David and Goliaths 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 TowneBank: Of David and Goliaths 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 TowneBank: Of David and Goliaths 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 Townebank Aston needs to make to build a sustainable competitive advantage.
