Revitalizing State Bank of India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Revitalizing State Bank of India
State Bank of India is India's oldest and largest bank with the government of India as its majority shareholder. Arundhati Bhattacharya, a 35-year old veteran of the bank, is appointed as its chairman in October 2013. Her appointment coincides with Moody's downgrading the bank's debt due to rising non-performing assets. She embarks on a mission to improve the bank's risk taking and management abilities, ensure uniform customer experience, and encourage greater collaboration among various verticals. Her efforts help the bank reduce it non-performing assets and improve its profitability. However, Bhattacharya knows that these gains will be fleeting without the development of a trained workforce who can address 21st century industry problems with speed and creativity. This requires transforming SBI into a performance-oriented bank supported by a new career development and remuneration system. Bhattacharya wonders if attempting to change the culture of a 206-year old mammoth organization is feasible or a mere pipe dream.
Authors :: Srikant M. Datar, N. M. Bhatta, Rishikesha Krishnan, Rachna Tahilyani
Swot Analysis of "Revitalizing State Bank of India" written by Srikant M. Datar, N. M. Bhatta, Rishikesha Krishnan, Rachna Tahilyani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bhattacharya Bank facing as an external strategic factors. Some of the topics covered in Revitalizing State Bank of India case study are - Strategic Management Strategies, Change management, Communication, Compensation, Financial management, Financial markets, Labor, Leadership, Organizational culture, Personnel policies, Social responsibility and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Revitalizing State Bank of India casestudy better are - – there is backlash against globalization, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Revitalizing State Bank of India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Revitalizing State Bank of India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bhattacharya Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bhattacharya Bank 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 Revitalizing State Bank of India can be done for the following purposes –
1. Strategic planning using facts provided in Revitalizing State Bank of India case study
2. Improving business portfolio management of Bhattacharya Bank
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 Bhattacharya Bank
Strengths Revitalizing State Bank of India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bhattacharya Bank in Revitalizing State Bank of India Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Bhattacharya Bank 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
– Bhattacharya Bank has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bhattacharya Bank 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.
Strong track record of project management
– Bhattacharya Bank 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 Bhattacharya Bank 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.
Effective Research and Development (R&D)
– Bhattacharya Bank 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 Revitalizing State Bank of India - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Bhattacharya Bank in the sector have low bargaining power. Revitalizing State Bank of India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bhattacharya Bank to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Bhattacharya Bank has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Revitalizing State Bank of India Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Bhattacharya Bank is one of the most innovative firm in sector. Manager in Revitalizing State Bank of India Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Bhattacharya Bank has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bhattacharya Bank to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Bhattacharya Bank 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.
Diverse revenue streams
– Bhattacharya Bank is present in almost all the verticals within the industry. This has provided firm in Revitalizing State Bank of India 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Revitalizing State Bank of India firm has clearly differentiated products in the market place. This has enabled Bhattacharya Bank to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Bhattacharya Bank to invest into research and development (R&D) and innovation.
Weaknesses Revitalizing State Bank of India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Revitalizing State Bank of India are -
Low market penetration in new markets
– Outside its home market of Bhattacharya Bank, firm in the HBR case study Revitalizing State Bank of India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Bhattacharya Bank supply chain. Even after few cautionary changes mentioned in the HBR case study - Revitalizing State Bank of India, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bhattacharya Bank vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Bhattacharya Bank 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Bhattacharya Bank 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.
Skills based hiring
– The stress on hiring functional specialists at Bhattacharya Bank 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.
Aligning sales with marketing
– It come across in the case study Revitalizing State Bank of India 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 Revitalizing State Bank of India can leverage the sales team experience to cultivate customer relationships as Bhattacharya Bank is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Revitalizing State Bank of India 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 Bhattacharya Bank 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Revitalizing State Bank of India, it seems that the employees of Bhattacharya Bank 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, Srikant M. Datar, N. M. Bhatta, Rishikesha Krishnan, Rachna Tahilyani suggests that, Bhattacharya Bank 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
Bhattacharya Bank has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Revitalizing State Bank of India HBR case study mentions - Bhattacharya Bank 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.
Opportunities Revitalizing State Bank of India | 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 Revitalizing State Bank of India are -
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 Bhattacharya Bank 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.
Buying journey improvements
– Bhattacharya Bank can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Revitalizing State Bank of India 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.
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 Bhattacharya Bank in the consumer business. Now Bhattacharya Bank can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Bhattacharya Bank 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 Finance & Accounting segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bhattacharya Bank in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bhattacharya Bank 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, Revitalizing State Bank of India, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Bhattacharya Bank 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. Bhattacharya Bank 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 Bhattacharya Bank 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bhattacharya Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Bhattacharya Bank can develop new processes and procedures in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bhattacharya Bank 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bhattacharya Bank is facing challenges because of the dominance of functional experts in the organization. Revitalizing State Bank of India 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.
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. Bhattacharya Bank can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Revitalizing State Bank of India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Revitalizing State Bank of India are -
Shortening product life cycle
– it is one of the major threat that Bhattacharya Bank is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Bhattacharya Bank
– 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 Bhattacharya Bank.
Stagnating economy with rate increase
– Bhattacharya Bank 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. Bhattacharya Bank needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Bhattacharya Bank.
Technology acceleration in Forth Industrial Revolution
– Bhattacharya Bank has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Bhattacharya Bank 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.
Consumer confidence and its impact on Bhattacharya Bank 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bhattacharya Bank 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 Revitalizing State Bank of India .
High dependence on third party suppliers
– Bhattacharya Bank 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.
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.
Regulatory challenges
– Bhattacharya Bank 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Revitalizing State Bank of India, Bhattacharya Bank 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 .
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. Bhattacharya Bank 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Bhattacharya Bank needs to make to build a sustainable competitive advantage.
