Turkish Economy Bank and Fortis Bank: Managing a Complex Merger SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Turkish Economy Bank and Fortis Bank: Managing a Complex Merger
Following the announcement of the merger of the Turkish Economic Bank (TEB) and Fortis Bank AS, Varol Civil, TEB's CEO, is faced with the task of executing the merger of these two entities. First, all parties must agree to the economic terms of this merger; a process that is challenging due to the complex ownership structures of these banks. Second, Civil and his team must find a way to combine the operations of the banks. With meaningful overlap between the two franchises the potential for cost savings and synergies is significant. However, the risks involved are also significant.
Authors :: Stuart C. Gilson, Esel Cekin, Sarah L. Abbott
Swot Analysis of "Turkish Economy Bank and Fortis Bank: Managing a Complex Merger" written by Stuart C. Gilson, Esel Cekin, Sarah L. Abbott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merger Fortis facing as an external strategic factors. Some of the topics covered in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger case study are - Strategic Management Strategies, Reorganization and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Turkish Economy Bank and Fortis Bank: Managing a Complex Merger casestudy better are - – challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
there is backlash against globalization, geopolitical disruptions, etc
Introduction to SWOT Analysis of Turkish Economy Bank and Fortis Bank: Managing a Complex Merger
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merger Fortis, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merger Fortis 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger can be done for the following purposes –
1. Strategic planning using facts provided in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger case study
2. Improving business portfolio management of Merger Fortis
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 Merger Fortis
Strengths Turkish Economy Bank and Fortis Bank: Managing a Complex Merger | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merger Fortis in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger Harvard Business Review case study are -
High brand equity
– Merger Fortis has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Merger Fortis to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Merger Fortis in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Merger Fortis is one of the leading recruiters in the industry. Managers in the Turkish Economy Bank and Fortis Bank: Managing a Complex Merger are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Merger Fortis is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Merger Fortis 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 Merger Fortis is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Merger Fortis is one of the most innovative firm in sector. Manager in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Merger Fortis 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Merger Fortis 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 Stuart C. Gilson, Esel Cekin, Sarah L. Abbott 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.
Cross disciplinary teams
– Horizontal connected teams at the Merger Fortis 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.
Training and development
– Merger Fortis has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Turkish Economy Bank and Fortis Bank: Managing a Complex Merger Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Merger Fortis 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Turkish Economy Bank and Fortis Bank: Managing a Complex Merger firm has clearly differentiated products in the market place. This has enabled Merger Fortis to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Merger Fortis to invest into research and development (R&D) and innovation.
Weaknesses Turkish Economy Bank and Fortis Bank: Managing a Complex Merger | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Turkish Economy Bank and Fortis Bank: Managing a Complex Merger are -
Low market penetration in new markets
– Outside its home market of Merger Fortis, firm in the HBR case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger can leverage the sales team experience to cultivate customer relationships as Merger Fortis is planning to shift buying processes online.
High cash cycle compare to competitors
Merger Fortis 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.
Increasing silos among functional specialists
– The organizational structure of Merger Fortis is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Merger Fortis needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merger Fortis to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger, 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.
Slow decision making process
– As mentioned earlier in the report, Merger Fortis 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. Merger Fortis 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.
Skills based hiring
– The stress on hiring functional specialists at Merger Fortis 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.
Slow to strategic competitive environment developments
– As Turkish Economy Bank and Fortis Bank: Managing a Complex Merger HBR case study mentions - Merger Fortis 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Merger Fortis is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger, it seems that the employees of Merger Fortis 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.
Interest costs
– Compare to the competition, Merger Fortis 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.
Opportunities Turkish Economy Bank and Fortis Bank: Managing a Complex Merger | 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merger Fortis to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Merger Fortis to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Merger Fortis can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Merger Fortis 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.
Loyalty marketing
– Merger Fortis 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.
Creating value in data economy
– The success of analytics program of Merger Fortis has opened avenues for new revenue streams for the organization in the industry. This can help Merger Fortis to build a more holistic ecosystem as suggested in the Turkish Economy Bank and Fortis Bank: Managing a Complex Merger case study. Merger Fortis can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Merger Fortis 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. Merger Fortis 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 Merger Fortis 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.
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. Merger Fortis can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Merger Fortis can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Merger Fortis can use these opportunities to build new business models that can help the communities that Merger Fortis operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merger Fortis 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.
Using analytics as competitive advantage
– Merger Fortis 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merger Fortis to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Merger Fortis to increase its market reach. Merger Fortis 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.
Threats Turkish Economy Bank and Fortis Bank: Managing a Complex Merger External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Merger Fortis 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Merger Fortis 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.
Shortening product life cycle
– it is one of the major threat that Merger Fortis is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Merger Fortis 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.
Technology acceleration in Forth Industrial Revolution
– Merger Fortis has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Merger Fortis 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.
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. Merger Fortis 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 Merger Fortis.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merger Fortis with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Merger Fortis can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Merger Fortis
– 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 Merger Fortis.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Turkish Economy Bank and Fortis Bank: Managing a Complex Merger, Merger Fortis 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merger Fortis 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger .
Weighted SWOT Analysis of Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Turkish Economy Bank and Fortis Bank: Managing a Complex Merger 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 Merger Fortis needs to make to build a sustainable competitive advantage.
