Case Study Description of Shinsei Bank: Developing an Integrated Firm
Tom Pedersen, newly appointed chief learning officer (CLO) of Shinsei Bank in Japan, pondered how he could facilitate development of an integrated culture and transformation of the organization. Shinsei Bank had not developed longstanding tradition or a strong corporate culture. The bank, which was made up of professionals with extremely diverse backgrounds, had to develop an integrated organizational culture. Pedersen had just administered a new performance evaluation program for 17 senior executives. This was the first time that they had been measured against competencies aligned with the corporate vision and values revised in late 2005. He thought the evaluation program was critical for permeating the vision and values throughout the bank and was eager to roll out the program to a larger number of employees next year. Pedersen wondered how he should improve the performance evaluation, and if this was the right process to influence the culture of the bank? He also wondered what other measures might be effective to get employees with diverse backgrounds to work together. How could he create a learning organization at Shinsei Bank?
Swot Analysis of "Shinsei Bank: Developing an Integrated Firm" written by Thomas J. DeLong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shinsei Pedersen facing as an external strategic factors. Some of the topics covered in Shinsei Bank: Developing an Integrated Firm case study are - Strategic Management Strategies, Change management, Collaboration, Developing employees, Diversity, Employee retention, Financial analysis, International business, Joint ventures, Social responsibility, Talent management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Shinsei Bank: Developing an Integrated Firm casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Shinsei Bank: Developing an Integrated Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shinsei Bank: Developing an Integrated Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shinsei Pedersen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm can be done for the following purposes –
1. Strategic planning using facts provided in Shinsei Bank: Developing an Integrated Firm case study
2. Improving business portfolio management of Shinsei Pedersen
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 Shinsei Pedersen
Strengths Shinsei Bank: Developing an Integrated Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shinsei Pedersen in Shinsei Bank: Developing an Integrated Firm Harvard Business Review case study are -
Innovation driven organization
– Shinsei Pedersen is one of the most innovative firm in sector. Manager in Shinsei Bank: Developing an Integrated Firm 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 Finance & Accounting industry
– Shinsei Bank: Developing an Integrated Firm firm has clearly differentiated products in the market place. This has enabled Shinsei Pedersen to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Shinsei Pedersen to invest into research and development (R&D) and innovation.
Organizational Resilience of Shinsei Pedersen
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shinsei Pedersen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Shinsei Pedersen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shinsei Pedersen 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.
Diverse revenue streams
– Shinsei Pedersen is present in almost all the verticals within the industry. This has provided firm in Shinsei Bank: Developing an Integrated Firm 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.
Training and development
– Shinsei Pedersen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shinsei Bank: Developing an Integrated Firm 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.
Ability to lead change in Finance & Accounting field
– Shinsei Pedersen 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 Shinsei Pedersen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Shinsei Pedersen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Shinsei Bank: Developing an Integrated Firm Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Shinsei Pedersen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shinsei Pedersen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Shinsei Bank: Developing an Integrated Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shinsei Bank: Developing an Integrated Firm are -
No frontier risks strategy
– After analyzing the HBR case study Shinsei Bank: Developing an Integrated Firm, 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.
Increasing silos among functional specialists
– The organizational structure of Shinsei Pedersen is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Shinsei Pedersen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shinsei Pedersen to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Shinsei Pedersen, firm in the HBR case study Shinsei Bank: Developing an Integrated Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Shinsei Pedersen products
– To increase the profitability and margins on the products, Shinsei Pedersen needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Shinsei Bank: Developing an Integrated Firm HBR case study mentions - Shinsei Pedersen 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.
Skills based hiring
– The stress on hiring functional specialists at Shinsei Pedersen 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shinsei Bank: Developing an Integrated Firm, it seems that the employees of Shinsei Pedersen 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Shinsei Bank: Developing an Integrated Firm 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 Shinsei Pedersen has relatively successful track record of launching new products.
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 Shinsei Pedersen supply chain. Even after few cautionary changes mentioned in the HBR case study - Shinsei Bank: Developing an Integrated Firm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shinsei Pedersen vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm can leverage the sales team experience to cultivate customer relationships as Shinsei Pedersen is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shinsei Pedersen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shinsei Bank: Developing an Integrated Firm can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Shinsei Bank: Developing an Integrated Firm | 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 Shinsei Bank: Developing an Integrated Firm are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shinsei Pedersen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Shinsei Pedersen 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. Shinsei Pedersen 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.
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 Shinsei Pedersen in the consumer business. Now Shinsei Pedersen can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shinsei Pedersen 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
– Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shinsei Pedersen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Shinsei Pedersen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Shinsei Pedersen has opened avenues for new revenue streams for the organization in the industry. This can help Shinsei Pedersen to build a more holistic ecosystem as suggested in the Shinsei Bank: Developing an Integrated Firm case study. Shinsei Pedersen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Shinsei Pedersen can develop new processes and procedures in Finance & Accounting 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.
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 Shinsei Pedersen 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shinsei Pedersen can use these opportunities to build new business models that can help the communities that Shinsei Pedersen operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shinsei Pedersen is facing challenges because of the dominance of functional experts in the organization. Shinsei Bank: Developing an Integrated Firm 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.
Leveraging digital technologies
– Shinsei Pedersen 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.
Loyalty marketing
– Shinsei Pedersen 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.
Threats Shinsei Bank: Developing an Integrated Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shinsei Bank: Developing an Integrated Firm 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 Shinsei Pedersen business can come under increasing regulations regarding data privacy, data security, etc.
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.
High dependence on third party suppliers
– Shinsei Pedersen 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.
Increasing wage structure of Shinsei Pedersen
– 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 Shinsei Pedersen.
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.
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. Shinsei Pedersen 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 Shinsei Pedersen 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.
Regulatory challenges
– Shinsei Pedersen 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shinsei Pedersen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Shinsei Pedersen has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Shinsei Pedersen 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.
Consumer confidence and its impact on Shinsei Pedersen 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.
Stagnating economy with rate increase
– Shinsei Pedersen 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.
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 Shinsei Pedersen in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Pedersen needs to make to build a sustainable competitive advantage.
