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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings,
wage bills are increasing, talent flight as more people leaving formal jobs, 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.
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.
Highly skilled collaborators
– Bnp Paribas 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 BNP Paribas Fortis: The "James" Banking Experience HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
Strong track record of project management
– Bnp Paribas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Bnp Paribas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bnp Paribas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the BNP Paribas Fortis: The "James" Banking Experience 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.
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.
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.
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.
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 -
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 Bnp Paribas supply chain. Even after few cautionary changes mentioned in the HBR case study - BNP Paribas Fortis: The "James" Banking Experience, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bnp Paribas vulnerable to further global disruptions in South East Asia.
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.
Skills based hiring
– The stress on hiring functional specialists at Bnp Paribas 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.
Capital Spending Reduction
– Even during the low interest decade, Bnp Paribas 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bnp Paribas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study BNP Paribas Fortis: The "James" Banking Experience can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Steve Muylle, Willem Standaert suggests that, Bnp Paribas 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 star products
– The top 2 products and services of the firm as mentioned in the BNP Paribas Fortis: The "James" Banking Experience HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bnp Paribas has relatively successful track record of launching new products.
Lack of clear differentiation of Bnp Paribas products
– To increase the profitability and margins on the products, Bnp Paribas needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As BNP Paribas Fortis: The "James" Banking Experience HBR case study mentions - Bnp Paribas 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.
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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bnp Paribas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bnp Paribas 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.
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.
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.
Developing new processes and practices
– Bnp Paribas can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Bnp Paribas 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.
Better consumer reach
– The expansion of the 5G network will help Bnp Paribas to increase its market reach. Bnp Paribas 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.
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.
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.
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.
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.
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.
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. Bnp Paribas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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. Bnp Paribas 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.
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.
Shortening product life cycle
– it is one of the major threat that Bnp Paribas is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Bnp Paribas in the Technology & Operations 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 Bnp Paribas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bnp Paribas 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.
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. Bnp Paribas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
