Case Study Description of BNP Paribas Fortis: The "James" Banking Experience
In October 2015, three senior managers at BNP Paribas Fortis, the leader in retail banking in Belgium and a subsidiary of the BNP Paribas Group, were discussing how to take the bank's latest service, "James," to the next level and grow its customer base fivefold by the end of 2016. Launched in 2009, James was a unique investment portfolio advice service that substituted web conferencing technology for face-to-face interaction between advisors and affluent banking customers. An important feature of the James banking experience was that each customer mainly interacted with the same advisor, and was able to do so from virtually any location, outside regular office hours. The use of technology to build strong customer relationships from a distance proved beneficial for both the customers and the bank. Now the BNP Paribas Fortis managers had to decide how to expand James' customer base, outpace the competition, and organize for growth. How could they grow the country's current base of nearly 20,000 James customers to 100,000 in just one year? The authors Steve Muylle and Willem Standaert are affiliated with Vlerick Business School.
Swot Analysis of "BNP Paribas Fortis: The "James" Banking Experience" written by Steve Muylle, Willem Standaert includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bnp Paribas facing as an external strategic factors. Some of the topics covered in BNP Paribas Fortis: The "James" Banking Experience case study are - Strategic Management Strategies, Customers, Financial management, IT, Meetings and Technology & Operations.
Some of the macro environment factors that can be used to understand the BNP Paribas Fortis: The "James" Banking Experience casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of BNP Paribas Fortis: The "James" Banking Experience
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in BNP Paribas Fortis: The "James" Banking Experience case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bnp Paribas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bnp Paribas 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 BNP Paribas Fortis: The "James" Banking Experience can be done for the following purposes –
1. Strategic planning using facts provided in BNP Paribas Fortis: The "James" Banking Experience case study
2. Improving business portfolio management of Bnp Paribas
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 Bnp Paribas
Strengths BNP Paribas Fortis: The "James" Banking Experience | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bnp Paribas in BNP Paribas Fortis: The "James" Banking Experience Harvard Business Review case study are -
Ability to recruit top talent
– Bnp Paribas is one of the leading recruiters in the industry. Managers in the BNP Paribas Fortis: The "James" Banking Experience are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Bnp Paribas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bnp Paribas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Bnp Paribas digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bnp Paribas 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.
Cross disciplinary teams
– Horizontal connected teams at the Bnp Paribas 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.
Sustainable margins compare to other players in Technology & Operations industry
– BNP Paribas Fortis: The "James" Banking Experience firm has clearly differentiated products in the market place. This has enabled Bnp Paribas to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Bnp Paribas to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Bnp Paribas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Bnp Paribas 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 Steve Muylle, Willem Standaert 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
- Bnp Paribas 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 Bnp Paribas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in BNP Paribas Fortis: The "James" Banking Experience Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Bnp Paribas 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.
Innovation driven organization
– Bnp Paribas is one of the most innovative firm in sector. Manager in BNP Paribas Fortis: The "James" Banking Experience Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Bnp Paribas 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 BNP Paribas Fortis: The "James" Banking Experience - 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 Bnp Paribas in the sector have low bargaining power. BNP Paribas Fortis: The "James" Banking Experience has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bnp Paribas to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses BNP Paribas Fortis: The "James" Banking Experience | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BNP Paribas Fortis: The "James" Banking Experience are -
Need for greater diversity
– Bnp Paribas 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, Bnp Paribas 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study BNP Paribas Fortis: The "James" Banking Experience, is just above the industry average. Bnp Paribas 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.
High cash cycle compare to competitors
Bnp Paribas 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 decision making process
– As mentioned earlier in the report, Bnp Paribas 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. Bnp Paribas 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 Bnp Paribas, firm in the HBR case study BNP Paribas Fortis: The "James" Banking Experience needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study BNP Paribas Fortis: The "James" Banking Experience, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study BNP Paribas Fortis: The "James" Banking Experience, in the dynamic environment Bnp Paribas has struggled to respond to the nimble upstart competition. Bnp Paribas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study BNP Paribas Fortis: The "James" Banking Experience 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 BNP Paribas Fortis: The "James" Banking Experience can leverage the sales team experience to cultivate customer relationships as Bnp Paribas is planning to shift buying processes online.
Products dominated business model
– Even though Bnp Paribas 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 - BNP Paribas Fortis: The "James" Banking Experience should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Bnp Paribas is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Bnp Paribas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bnp Paribas to focus more on services rather than just following the product oriented approach.
Opportunities BNP Paribas Fortis: The "James" Banking Experience | 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 BNP Paribas Fortis: The "James" Banking Experience are -
Creating value in data economy
– The success of analytics program of Bnp Paribas has opened avenues for new revenue streams for the organization in the industry. This can help Bnp Paribas to build a more holistic ecosystem as suggested in the BNP Paribas Fortis: The "James" Banking Experience case study. Bnp Paribas can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Bnp Paribas 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.
Leveraging digital technologies
– Bnp Paribas 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.
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. Bnp Paribas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Bnp Paribas 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 BNP Paribas Fortis: The "James" Banking Experience - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bnp Paribas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Bnp Paribas can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. BNP Paribas Fortis: The "James" Banking Experience 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, Bnp Paribas 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, BNP Paribas Fortis: The "James" Banking Experience, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bnp Paribas is facing challenges because of the dominance of functional experts in the organization. BNP Paribas Fortis: The "James" Banking Experience 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bnp Paribas 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 Bnp Paribas to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bnp Paribas can use these opportunities to build new business models that can help the communities that Bnp Paribas operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Building a culture of innovation
– managers at Bnp Paribas 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.
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 Bnp Paribas in the consumer business. Now Bnp Paribas can target international markets with far fewer capital restrictions requirements than the existing system.
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 Bnp Paribas 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.
Threats BNP Paribas Fortis: The "James" Banking Experience External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study BNP Paribas Fortis: The "James" Banking Experience are -
Consumer confidence and its impact on Bnp Paribas 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study BNP Paribas Fortis: The "James" Banking Experience, Bnp Paribas 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 .
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. Bnp Paribas needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Environmental challenges
– Bnp Paribas 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. Bnp Paribas can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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.
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 Bnp Paribas.
Stagnating economy with rate increase
– Bnp Paribas 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bnp Paribas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Bnp Paribas 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 Technology & Operations industry regulations.
High dependence on third party suppliers
– Bnp Paribas 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.
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 Bnp Paribas business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Bnp Paribas has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Bnp Paribas needs to keep up with the evolution of technology in the Technology & Operations 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.
Weighted SWOT Analysis of BNP Paribas Fortis: The "James" Banking Experience 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 BNP Paribas Fortis: The "James" Banking Experience 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 BNP Paribas Fortis: The "James" Banking Experience 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 BNP Paribas Fortis: The "James" Banking Experience 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 BNP Paribas Fortis: The "James" Banking Experience 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 Bnp Paribas needs to make to build a sustainable competitive advantage.