Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?
The case describes how a 120-year-old, domestic bank in Peru, focusing on A, B and C socio-economic segments and corporate banking, as well as boasting the country's largest channel customer service network and leading the industry in the number of monetary transactions, spotted a business opportunity in a segment that strays from its core business -the low-income sector (D). To seize it, the bank developed in 2005 Agente BCP, a new channel to cater to this segment with banking agents. After launching Agente BCP, it recorded unexpected growth rates, and did the largest number of transactions as compared to other BCP channels, taking the brand name to remote locations, and receiving numerous awards. However, some executives still wondered whether this channel should continue to be part of the bank's operations or whether the time had come to spin it off. Universidad del PacA?fico' case collection
Authors :: Giuliana Leguia, Michelle Rodriguez Serra, Elsa Del Castillo
Swot Analysis of "Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?" written by Giuliana Leguia, Michelle Rodriguez Serra, Elsa Del Castillo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bcp Agente facing as an external strategic factors. Some of the topics covered in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? case study are - Strategic Management Strategies, Emerging markets and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? casestudy better are - – increasing commodity prices, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, technology disruption, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bcp Agente, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bcp Agente 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? can be done for the following purposes –
1. Strategic planning using facts provided in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? case study
2. Improving business portfolio management of Bcp Agente
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 Bcp Agente
Strengths Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bcp Agente in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? Harvard Business Review case study are -
Ability to recruit top talent
– Bcp Agente is one of the leading recruiters in the industry. Managers in the Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Bcp Agente
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bcp Agente does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Bcp Agente 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.
Superior customer experience
– The customer experience strategy of Bcp Agente in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Bcp Agente 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 Bcp Agente is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Bcp Agente 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? - 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
– Bcp Agente 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Bcp Agente is one of the most innovative firm in sector. Manager in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Bcp Agente has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Training and development
– Bcp Agente has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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.
High brand equity
– Bcp Agente has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bcp Agente to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Bcp Agente in the sector have low bargaining power. Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bcp Agente to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? are -
Capital Spending Reduction
– Even during the low interest decade, Bcp Agente 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 operating costs
– Compare to the competitors, firm in the HBR case study Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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 Bcp Agente 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?, it seems that the employees of Bcp Agente 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.
Increasing silos among functional specialists
– The organizational structure of Bcp Agente is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bcp Agente needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bcp Agente to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?, is just above the industry average. Bcp Agente needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Bcp Agente 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.
Need for greater diversity
– Bcp Agente 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.
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 Bcp Agente supply chain. Even after few cautionary changes mentioned in the HBR case study - Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bcp Agente vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Bcp Agente products
– To increase the profitability and margins on the products, Bcp Agente needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? HBR case study mentions - Bcp Agente 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.
Low market penetration in new markets
– Outside its home market of Bcp Agente, firm in the HBR case study Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? | 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bcp Agente 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 Bcp Agente to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Bcp Agente 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.
Buying journey improvements
– Bcp Agente can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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.
Manufacturing automation
– Bcp Agente 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bcp Agente is facing challenges because of the dominance of functional experts in the organization. Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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.
Loyalty marketing
– Bcp Agente 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bcp Agente 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.
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 Bcp Agente in the consumer business. Now Bcp Agente can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Bcp Agente has opened avenues for new revenue streams for the organization in the industry. This can help Bcp Agente to build a more holistic ecosystem as suggested in the Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? case study. Bcp Agente can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bcp Agente 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, Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Bcp Agente 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.
Building a culture of innovation
– managers at Bcp Agente 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.
Using analytics as competitive advantage
– Bcp Agente 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bcp Agente to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bcp Agente with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Bcp Agente can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Bcp Agente 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. Bcp Agente 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.
High dependence on third party suppliers
– Bcp Agente 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.
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 Bcp Agente.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bcp Agente 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.
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.
Consumer confidence and its impact on Bcp Agente 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.
Stagnating economy with rate increase
– Bcp Agente 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.
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. Bcp Agente needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Environmental challenges
– Bcp Agente 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. Bcp Agente can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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 Banco de Credito del Peru: Agente BCP - Strategy Channeling or Channel Segmentation? 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 Bcp Agente needs to make to build a sustainable competitive advantage.
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