A Challenger's Strategy: Pinar Abay at ING Bank Turkey SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of A Challenger's Strategy: Pinar Abay at ING Bank Turkey
In 2013, Pinar Abay was appointed as the CEO of ING Bank Turkey. At 34, she was the youngest bank CEO in Turkey's history. Her appointment raised eyebrows because of her youth and because her career at McKinsey had given her no day-to-day bank management experience. ING, however, wanted a younger leader who could relate to Turkey's young and digitally savvy population. Upon her appointment, Abay determined that major changes were required in operations, personnel and culture. She adopted a variety of innovative approaches to making these changes, ranging from non-traditional hires to sitting for hours in call centers to personally answering customer complaints on Twitter. As Turkey's 12th largest bank, however, ING Turkey lacked scale, so Abay and her team considered a number of non-traditional ways to organize distribution and market the bank to promote growth.
Authors :: Paul M. Healy, Gautam Mukunda, Esel Cekin
Swot Analysis of "A Challenger's Strategy: Pinar Abay at ING Bank Turkey" written by Paul M. Healy, Gautam Mukunda, Esel Cekin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Abay Ing facing as an external strategic factors. Some of the topics covered in A Challenger's Strategy: Pinar Abay at ING Bank Turkey case study are - Strategic Management Strategies, Change management, Emerging markets, Growth strategy, Innovation, Leadership, Organizational culture, Talent management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the A Challenger's Strategy: Pinar Abay at ING Bank Turkey casestudy better are - – there is increasing trade war between United States & China, there is backlash against globalization, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of A Challenger's Strategy: Pinar Abay at ING Bank Turkey
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A Challenger's Strategy: Pinar Abay at ING Bank Turkey case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abay Ing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abay Ing 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey can be done for the following purposes –
1. Strategic planning using facts provided in A Challenger's Strategy: Pinar Abay at ING Bank Turkey case study
2. Improving business portfolio management of Abay Ing
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Abay Ing
Strengths A Challenger's Strategy: Pinar Abay at ING Bank Turkey | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abay Ing in A Challenger's Strategy: Pinar Abay at ING Bank Turkey Harvard Business Review case study are -
Analytics focus
– Abay Ing 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 Paul M. Healy, Gautam Mukunda, Esel Cekin 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.
Training and development
– Abay Ing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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.
Operational resilience
– The operational resilience strategy in the A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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.
Innovation driven organization
– Abay Ing is one of the most innovative firm in sector. Manager in A Challenger's Strategy: Pinar Abay at ING Bank Turkey Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Abay Ing in the sector have low bargaining power. A Challenger's Strategy: Pinar Abay at ING Bank Turkey has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abay Ing to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Abay Ing 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.
Strong track record of project management
– Abay Ing is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Abay Ing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Abay Ing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abay Ing 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.
Effective Research and Development (R&D)
– Abay Ing 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Abay Ing 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 Abay Ing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Abay Ing 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses A Challenger's Strategy: Pinar Abay at ING Bank Turkey | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A Challenger's Strategy: Pinar Abay at ING Bank Turkey are -
Lack of clear differentiation of Abay Ing products
– To increase the profitability and margins on the products, Abay Ing needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul M. Healy, Gautam Mukunda, Esel Cekin suggests that, Abay Ing 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.
High cash cycle compare to competitors
Abay Ing 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey, it seems that the employees of Abay Ing 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.
Need for greater diversity
– Abay Ing 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.
No frontier risks strategy
– After analyzing the HBR case study A Challenger's Strategy: Pinar Abay at ING Bank Turkey, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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 Abay Ing has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Abay Ing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study A Challenger's Strategy: Pinar Abay at ING Bank Turkey, in the dynamic environment Abay Ing has struggled to respond to the nimble upstart competition. Abay Ing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Abay Ing 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.
Low market penetration in new markets
– Outside its home market of Abay Ing, firm in the HBR case study A Challenger's Strategy: Pinar Abay at ING Bank Turkey needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities A Challenger's Strategy: Pinar Abay at ING Bank Turkey | 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey are -
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 Abay Ing in the consumer business. Now Abay Ing can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Abay Ing 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
– Abay Ing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Abay Ing to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Abay Ing can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Abay Ing 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. Abay Ing 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.
Learning at scale
– Online learning technologies has now opened space for Abay Ing 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
– Abay Ing 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Abay Ing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Abay Ing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abay Ing 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, A Challenger's Strategy: Pinar Abay at ING Bank Turkey, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Abay Ing has opened avenues for new revenue streams for the organization in the industry. This can help Abay Ing to build a more holistic ecosystem as suggested in the A Challenger's Strategy: Pinar Abay at ING Bank Turkey case study. Abay Ing can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Abay Ing can use these opportunities to build new business models that can help the communities that Abay Ing operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Loyalty marketing
– Abay Ing 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.
Threats A Challenger's Strategy: Pinar Abay at ING Bank Turkey External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A Challenger's Strategy: Pinar Abay at ING Bank Turkey are -
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 Abay Ing in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Abay Ing 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.
Shortening product life cycle
– it is one of the major threat that Abay Ing is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abay Ing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Abay Ing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A Challenger's Strategy: Pinar Abay at ING Bank Turkey, Abay Ing may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Abay Ing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Abay Ing
– 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 Abay Ing.
Regulatory challenges
– Abay Ing 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 Finance & Accounting industry regulations.
Stagnating economy with rate increase
– Abay Ing 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.
Technology acceleration in Forth Industrial Revolution
– Abay Ing has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Abay Ing needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
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. Abay Ing 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.
Weighted SWOT Analysis of A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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 A Challenger's Strategy: Pinar Abay at ING Bank Turkey 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 Abay Ing needs to make to build a sustainable competitive advantage.