Fraud at Bank of Baroda: Manage Risk or Manage Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
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Case Study SWOT Analysis Solution
Case Study Description of Fraud at Bank of Baroda: Manage Risk or Manage Crisis
Bank of Baroda was the second-largest commercial bank in India, but it was struggling with a decline in profits and an increase in non-performing assets. Only a week before the new chief executive officer's term commenced, Bank of Baroda was in the news due to reports of fraud occurring at the bank's Ahmedabad and New Delhi operations. The frauds involved bill discounting schemes and money laundering. The bank's violations of its "know your client" and anti-money laundering standards raised concerns about its risk management practices-or lack of such practices. The new chief executive officer was only the second executive from the private sector to head a public sector bank. He needed to prove his value in the world of public sector banking by managing the crisis, implementing a strategy to stabilize the bank's financial health, and preventing a recurrence of the problems. Sanjay Dhamija is affiliated with International Management Institute-New Delhi.
Swot Analysis of "Fraud at Bank of Baroda: Manage Risk or Manage Crisis" written by Sanjay Dhamija includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Baroda Bank facing as an external strategic factors. Some of the topics covered in Fraud at Bank of Baroda: Manage Risk or Manage Crisis case study are - Strategic Management Strategies, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Fraud at Bank of Baroda: Manage Risk or Manage Crisis casestudy better are - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Fraud at Bank of Baroda: Manage Risk or Manage Crisis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fraud at Bank of Baroda: Manage Risk or Manage Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Baroda Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Baroda 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Fraud at Bank of Baroda: Manage Risk or Manage Crisis case study
2. Improving business portfolio management of Baroda 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 Baroda Bank
Strengths Fraud at Bank of Baroda: Manage Risk or Manage Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Baroda Bank in Fraud at Bank of Baroda: Manage Risk or Manage Crisis Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Baroda 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.
Innovation driven organization
– Baroda Bank is one of the most innovative firm in sector. Manager in Fraud at Bank of Baroda: Manage Risk or Manage Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Baroda Bank is one of the leading recruiters in the industry. Managers in the Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Baroda Bank
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Baroda Bank does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Baroda Bank in the sector have low bargaining power. Fraud at Bank of Baroda: Manage Risk or Manage Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Baroda Bank to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Fraud at Bank of Baroda: Manage Risk or Manage Crisis firm has clearly differentiated products in the market place. This has enabled Baroda Bank to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Baroda Bank to invest into research and development (R&D) and innovation.
Training and development
– Baroda Bank has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Baroda Bank digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Baroda Bank 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.
Operational resilience
– The operational resilience strategy in the Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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.
High switching costs
– The high switching costs that Baroda 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)
– Baroda 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis - 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
– Baroda Bank 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 Baroda Bank in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Fraud at Bank of Baroda: Manage Risk or Manage Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fraud at Bank of Baroda: Manage Risk or Manage Crisis are -
Aligning sales with marketing
– It come across in the case study Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis can leverage the sales team experience to cultivate customer relationships as Baroda Bank is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Baroda Bank has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Baroda Bank even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Baroda Bank, firm in the HBR case study Fraud at Bank of Baroda: Manage Risk or Manage Crisis needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Baroda Bank is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Baroda Bank needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Baroda Bank 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis, is just above the industry average. Baroda Bank 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.
Need for greater diversity
– Baroda Bank 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Baroda 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.
Products dominated business model
– Even though Baroda Bank 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 - Fraud at Bank of Baroda: Manage Risk or Manage Crisis should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Sanjay Dhamija suggests that, Baroda 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 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 Baroda Bank supply chain. Even after few cautionary changes mentioned in the HBR case study - Fraud at Bank of Baroda: Manage Risk or Manage Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Baroda Bank vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Baroda Bank 's lucrative customers.
Opportunities Fraud at Bank of Baroda: Manage Risk or Manage Crisis | 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis are -
Buying journey improvements
– Baroda Bank can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Baroda 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, Fraud at Bank of Baroda: Manage Risk or Manage Crisis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Baroda Bank can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Loyalty marketing
– Baroda Bank 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Baroda Bank is facing challenges because of the dominance of functional experts in the organization. Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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.
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 Baroda Bank in the consumer business. Now Baroda Bank can target international markets with far fewer capital restrictions requirements than the existing system.
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. Baroda Bank can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Baroda Bank has opened avenues for new revenue streams for the organization in the industry. This can help Baroda Bank to build a more holistic ecosystem as suggested in the Fraud at Bank of Baroda: Manage Risk or Manage Crisis case study. Baroda Bank can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Baroda 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.
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 Baroda 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Baroda 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.
Using analytics as competitive advantage
– Baroda Bank 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Baroda Bank to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Baroda 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. Baroda 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.
Threats Fraud at Bank of Baroda: Manage Risk or Manage Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fraud at Bank of Baroda: Manage Risk or Manage Crisis are -
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 Baroda Bank business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Fraud at Bank of Baroda: Manage Risk or Manage Crisis, Baroda 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 .
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. Baroda Bank needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Baroda 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Baroda Bank is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Baroda Bank in the Finance & Accounting industry. The Finance & Accounting 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.
Increasing wage structure of Baroda 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 Baroda Bank.
Technology acceleration in Forth Industrial Revolution
– Baroda Bank has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Baroda 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.
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 Baroda Bank in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Baroda Bank with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Baroda 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.
Weighted SWOT Analysis of Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Fraud at Bank of Baroda: Manage Risk or Manage Crisis 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 Baroda Bank needs to make to build a sustainable competitive advantage.
