Beneficial State Bank: Benefit to All, Harm to None SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Beneficial State Bank: Benefit to All, Harm to None
In the fall of 2017, Beneficial State Bank, a triple bottom line community development bank serving areas of California, Oregon, and Washington, had completed its fourth successive year of normalized profitability while continuing to fulfill its mission of promoting social justice and environmental sustainability. Having grown roughly 20 percent organically by loan and deposit growth annually, as well as through three aligned acquisitions, Beneficial State Bank was well on its way to proving its beneficial banking model as well as the impact of its operations on individuals, communities, and the banking system at large. At the same time, husband and wife creators of the bank, Tom Steyer (MBA '83) and Kat Taylor (JD/MBA '86), found themselves at a crossroads. As the sole providers of capital to the bank during the formation and, as a result of the bank's unique organizational structure, the couple remained the only investors in the bank almost a decade after its founding. With the bank's assets approaching $1 billion, the team envisioned scaling the business for both economic viability and impact to nearly five times the current size in the coming years. In order to achieve this goal, however, the founders would have to consider the introduction of additional investors. This case describes the motivating factors for changing the bank's existing capital structure and includes a discussion of a potential investment option to fulfill these goals. Additional topics include prospective investors, existing capitalization and growth prospects, and the role of mergers and acquisitions.
Authors :: Charles Ewald, Heidi Krauel Patel, Jaclyn C. Foroughi
Swot Analysis of "Beneficial State Bank: Benefit to All, Harm to None" written by Charles Ewald, Heidi Krauel Patel, Jaclyn C. Foroughi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beneficial Bank facing as an external strategic factors. Some of the topics covered in Beneficial State Bank: Benefit to All, Harm to None case study are - Strategic Management Strategies, Influence and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Beneficial State Bank: Benefit to All, Harm to None casestudy better are - – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of Beneficial State Bank: Benefit to All, Harm to None
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Beneficial State Bank: Benefit to All, Harm to None case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beneficial Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beneficial Bank 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 Beneficial State Bank: Benefit to All, Harm to None can be done for the following purposes –
1. Strategic planning using facts provided in Beneficial State Bank: Benefit to All, Harm to None case study
2. Improving business portfolio management of Beneficial Bank
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 Beneficial Bank
Strengths Beneficial State Bank: Benefit to All, Harm to None | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beneficial Bank in Beneficial State Bank: Benefit to All, Harm to None Harvard Business Review case study are -
Analytics focus
– Beneficial Bank 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 Charles Ewald, Heidi Krauel Patel, Jaclyn C. Foroughi 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.
Organizational Resilience of Beneficial Bank
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beneficial Bank does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Beneficial Bank in the sector have low bargaining power. Beneficial State Bank: Benefit to All, Harm to None has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beneficial Bank to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Beneficial State Bank: Benefit to All, Harm to None 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.
Innovation driven organization
– Beneficial Bank is one of the most innovative firm in sector. Manager in Beneficial State Bank: Benefit to All, Harm to None Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Beneficial Bank is one of the leading recruiters in the industry. Managers in the Beneficial State Bank: Benefit to All, Harm to None are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Beneficial Bank has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Beneficial State Bank: Benefit to All, Harm to None 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.
Learning organization
- Beneficial Bank 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 Beneficial Bank is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Beneficial State Bank: Benefit to All, Harm to None Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Beneficial Bank 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.
Strong track record of project management
– Beneficial Bank is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Beneficial Bank is present in almost all the verticals within the industry. This has provided firm in Beneficial State Bank: Benefit to All, Harm to None 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.
High brand equity
– Beneficial Bank has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beneficial Bank to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Beneficial State Bank: Benefit to All, Harm to None | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beneficial State Bank: Benefit to All, Harm to None are -
Increasing silos among functional specialists
– The organizational structure of Beneficial Bank is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Beneficial Bank needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beneficial Bank to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Beneficial State Bank: Benefit to All, Harm to None HBR case study mentions - Beneficial Bank 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Charles Ewald, Heidi Krauel Patel, Jaclyn C. Foroughi suggests that, Beneficial Bank 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.
Skills based hiring
– The stress on hiring functional specialists at Beneficial Bank has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Beneficial Bank is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Beneficial State Bank: Benefit to All, Harm to None 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 cash cycle compare to competitors
Beneficial Bank 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.
Need for greater diversity
– Beneficial Bank 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.
Capital Spending Reduction
– Even during the low interest decade, Beneficial Bank 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Beneficial State Bank: Benefit to All, Harm to None, it seems that the employees of Beneficial Bank 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.
Products dominated business model
– Even though Beneficial Bank 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 - Beneficial State Bank: Benefit to All, Harm to None should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial State Bank: Benefit to All, Harm to None can leverage the sales team experience to cultivate customer relationships as Beneficial Bank is planning to shift buying processes online.
Opportunities Beneficial State Bank: Benefit to All, Harm to None | 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 Beneficial State Bank: Benefit to All, Harm to None are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Beneficial Bank 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.
Building a culture of innovation
– managers at Beneficial Bank 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 Finance & Accounting segment.
Creating value in data economy
– The success of analytics program of Beneficial Bank has opened avenues for new revenue streams for the organization in the industry. This can help Beneficial Bank to build a more holistic ecosystem as suggested in the Beneficial State Bank: Benefit to All, Harm to None case study. Beneficial Bank can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Beneficial Bank to increase its market reach. Beneficial Bank 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.
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 Beneficial Bank in the consumer business. Now Beneficial Bank can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Beneficial Bank can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial Bank 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.
Leveraging digital technologies
– Beneficial Bank 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beneficial Bank can use these opportunities to build new business models that can help the communities that Beneficial Bank operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beneficial Bank 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, Beneficial State Bank: Benefit to All, Harm to None, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Beneficial Bank can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beneficial Bank is facing challenges because of the dominance of functional experts in the organization. Beneficial State Bank: Benefit to All, Harm to None 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beneficial Bank 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.
Threats Beneficial State Bank: Benefit to All, Harm to None External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Beneficial State Bank: Benefit to All, Harm to None are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beneficial Bank 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 Beneficial State Bank: Benefit to All, Harm to None .
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. Beneficial Bank 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.
Consumer confidence and its impact on Beneficial Bank 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 wage structure of Beneficial Bank
– 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 Beneficial Bank.
Regulatory challenges
– Beneficial Bank 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beneficial Bank 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.
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.
Technology acceleration in Forth Industrial Revolution
– Beneficial Bank has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Beneficial Bank 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.
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. Beneficial Bank can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Beneficial Bank 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Beneficial Bank with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Beneficial Bank 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.
Weighted SWOT Analysis of Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial State Bank: Benefit to All, Harm to None 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 Beneficial Bank needs to make to build a sustainable competitive advantage.