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, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, wage bills are increasing, there is backlash against globalization, geopolitical disruptions,
increasing transportation and logistics costs, increasing energy prices, 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 -
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.
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.
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.
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.
Learning organization
- Shinsei Pedersen 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 Shinsei Pedersen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shinsei Bank: Developing an Integrated Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Analytics focus
– Shinsei Pedersen 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 Thomas J. DeLong 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.
Strong track record of project management
– Shinsei Pedersen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
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 -
Interest costs
– Compare to the competition, Shinsei Pedersen 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Shinsei Bank: Developing an Integrated Firm, in the dynamic environment Shinsei Pedersen has struggled to respond to the nimble upstart competition. Shinsei Pedersen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Shinsei Bank: Developing an Integrated Firm has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shinsei Pedersen 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas J. DeLong suggests that, Shinsei Pedersen 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 cash cycle compare to competitors
Shinsei Pedersen 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 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shinsei Bank: Developing an Integrated Firm, is just above the industry average. Shinsei Pedersen 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.
Capital Spending Reduction
– Even during the low interest decade, Shinsei Pedersen 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Shinsei Pedersen 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.
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 -
Manufacturing automation
– Shinsei Pedersen can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shinsei Pedersen 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Shinsei Pedersen to increase its market reach. Shinsei Pedersen 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shinsei Pedersen 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 Shinsei Pedersen to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
Buying journey improvements
– Shinsei Pedersen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shinsei Bank: Developing an Integrated Firm suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Learning at scale
– Online learning technologies has now opened space for Shinsei Pedersen 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.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shinsei Bank: Developing an Integrated Firm, Shinsei Pedersen 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 .
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.
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. Shinsei Pedersen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Shinsei Pedersen is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Shinsei Pedersen needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Environmental challenges
– Shinsei Pedersen 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. Shinsei Pedersen can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm .
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.
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.
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.
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.
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.