Case Study Description of ACTonline: ACTDirect's Electronic Banking System
In the 1980s, Australian Capital Territory Banking Corp. Ltd. (later known as "ACTDirect") identified the need to develop information systems to enhance the provision and delivery of its products and services. "ACTonline," an electronic banking system, was the bank's solution to meeting the challenges of continual technological change. By the latter part of the 1990s, however, fast and complex advances in technology changed the banking landscape. The new electronic marketplace presented a challenge to management--how best to market ACTonline in the electronic commerce environment?
Swot Analysis of "ACTonline: ACTDirect's Electronic Banking System" written by Ali F. Farhoomand, Vanessa N. Clark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Actonline Electronic facing as an external strategic factors. Some of the topics covered in ACTonline: ACTDirect's Electronic Banking System case study are - Strategic Management Strategies, Marketing, Strategic planning and Technology & Operations.
Some of the macro environment factors that can be used to understand the ACTonline: ACTDirect's Electronic Banking System casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, technology disruption, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of ACTonline: ACTDirect's Electronic Banking System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ACTonline: ACTDirect's Electronic Banking System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Actonline Electronic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Actonline Electronic 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 ACTonline: ACTDirect's Electronic Banking System can be done for the following purposes –
1. Strategic planning using facts provided in ACTonline: ACTDirect's Electronic Banking System case study
2. Improving business portfolio management of Actonline Electronic
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Actonline Electronic
Strengths ACTonline: ACTDirect's Electronic Banking System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Actonline Electronic in ACTonline: ACTDirect's Electronic Banking System Harvard Business Review case study are -
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Actonline Electronic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Actonline Electronic 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.
Superior customer experience
– The customer experience strategy of Actonline Electronic in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Actonline Electronic 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 ACTonline: ACTDirect's Electronic Banking System - 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 Technology & Operations field
– Actonline Electronic 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 Actonline Electronic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Actonline Electronic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Actonline Electronic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Actonline Electronic 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 Ali F. Farhoomand, Vanessa N. Clark 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.
Learning organization
- Actonline Electronic 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 Actonline Electronic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ACTonline: ACTDirect's Electronic Banking System Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Actonline Electronic is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the ACTonline: ACTDirect's Electronic Banking System 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.
Diverse revenue streams
– Actonline Electronic is present in almost all the verticals within the industry. This has provided firm in ACTonline: ACTDirect's Electronic Banking System 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.
Innovation driven organization
– Actonline Electronic is one of the most innovative firm in sector. Manager in ACTonline: ACTDirect's Electronic Banking System Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Technology & Operations industry
– ACTonline: ACTDirect's Electronic Banking System firm has clearly differentiated products in the market place. This has enabled Actonline Electronic to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Actonline Electronic to invest into research and development (R&D) and innovation.
Weaknesses ACTonline: ACTDirect's Electronic Banking System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ACTonline: ACTDirect's Electronic Banking System are -
Slow decision making process
– As mentioned earlier in the report, Actonline Electronic 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. Actonline Electronic 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.
Increasing silos among functional specialists
– The organizational structure of Actonline Electronic is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Actonline Electronic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Actonline Electronic to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Actonline Electronic 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.
No frontier risks strategy
– After analyzing the HBR case study ACTonline: ACTDirect's Electronic Banking System, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Need for greater diversity
– Actonline Electronic 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.
Products dominated business model
– Even though Actonline Electronic 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 - ACTonline: ACTDirect's Electronic Banking System should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Actonline Electronic 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.
Slow to strategic competitive environment developments
– As ACTonline: ACTDirect's Electronic Banking System HBR case study mentions - Actonline Electronic 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.
High operating costs
– Compare to the competitors, firm in the HBR case study ACTonline: ACTDirect's Electronic Banking System 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 Actonline Electronic 's lucrative customers.
Aligning sales with marketing
– It come across in the case study ACTonline: ACTDirect's Electronic Banking System 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 ACTonline: ACTDirect's Electronic Banking System can leverage the sales team experience to cultivate customer relationships as Actonline Electronic is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study ACTonline: ACTDirect's Electronic Banking System, it seems that the employees of Actonline Electronic 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.
Opportunities ACTonline: ACTDirect's Electronic Banking System | 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 ACTonline: ACTDirect's Electronic Banking System are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Actonline Electronic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Actonline Electronic to increase its market reach. Actonline Electronic will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 Actonline Electronic in the consumer business. Now Actonline Electronic can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Actonline Electronic is facing challenges because of the dominance of functional experts in the organization. ACTonline: ACTDirect's Electronic Banking System 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.
Buying journey improvements
– Actonline Electronic can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ACTonline: ACTDirect's Electronic Banking System 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.
Learning at scale
– Online learning technologies has now opened space for Actonline Electronic 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.
Building a culture of innovation
– managers at Actonline Electronic 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 Technology & Operations segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Actonline Electronic can use these opportunities to build new business models that can help the communities that Actonline Electronic operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Actonline Electronic 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Actonline Electronic 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. Actonline Electronic 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.
Loyalty marketing
– Actonline Electronic 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Actonline Electronic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Actonline Electronic 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.
Threats ACTonline: ACTDirect's Electronic Banking System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ACTonline: ACTDirect's Electronic Banking System 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 Actonline Electronic business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Actonline Electronic 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. Actonline Electronic can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Actonline Electronic
– 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 Actonline Electronic.
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. Actonline Electronic 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Actonline Electronic in the Technology & Operations industry. The Technology & Operations 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.
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.
Consumer confidence and its impact on Actonline Electronic 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.
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 Actonline Electronic.
High dependence on third party suppliers
– Actonline Electronic 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 ACTonline: ACTDirect's Electronic Banking System, Actonline Electronic may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Actonline Electronic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Actonline Electronic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Actonline Electronic 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 ACTonline: ACTDirect's Electronic Banking System .
Weighted SWOT Analysis of ACTonline: ACTDirect's Electronic Banking System 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 ACTonline: ACTDirect's Electronic Banking System 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 ACTonline: ACTDirect's Electronic Banking System 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 ACTonline: ACTDirect's Electronic Banking System 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 ACTonline: ACTDirect's Electronic Banking System 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 Actonline Electronic needs to make to build a sustainable competitive advantage.
