Advising on Currency Risk at ICICI Bank SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Advising on Currency Risk at ICICI Bank
In March 2003, a client approached the Markets Advisory Group at ICICI Bank, India's second largest bank, about a hedging transaction. The hedge involved multiple interest rates and currencies. Shilpa Kumar, head of the Markets Advisory Group, has to put together a recommendation for the client. She can choose from a number of financial instruments, including swaps, options, and futures contracts on interest rates and currencies, in her recommendation.
Authors :: George Chacko, Marti G. Subrahmanyam, Vincent Dessain, Anders Sjoman
Swot Analysis of "Advising on Currency Risk at ICICI Bank" written by George Chacko, Marti G. Subrahmanyam, Vincent Dessain, Anders Sjoman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Icici Currencies facing as an external strategic factors. Some of the topics covered in Advising on Currency Risk at ICICI Bank case study are - Strategic Management Strategies, Financial analysis, Financial markets, Risk management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Advising on Currency Risk at ICICI Bank casestudy better are - – there is increasing trade war between United States & China, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
wage bills are increasing, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Advising on Currency Risk at ICICI Bank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Advising on Currency Risk at ICICI Bank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Icici Currencies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Icici Currencies 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 Advising on Currency Risk at ICICI Bank can be done for the following purposes –
1. Strategic planning using facts provided in Advising on Currency Risk at ICICI Bank case study
2. Improving business portfolio management of Icici Currencies
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 Icici Currencies
Strengths Advising on Currency Risk at ICICI Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Icici Currencies in Advising on Currency Risk at ICICI Bank Harvard Business Review case study are -
Innovation driven organization
– Icici Currencies is one of the most innovative firm in sector. Manager in Advising on Currency Risk at ICICI Bank Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Icici Currencies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Icici Currencies has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Icici Currencies in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Icici Currencies 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.
Organizational Resilience of Icici Currencies
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Icici Currencies 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 Icici Currencies in the sector have low bargaining power. Advising on Currency Risk at ICICI Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Icici Currencies to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Icici Currencies 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 Icici Currencies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Advising on Currency Risk at ICICI Bank Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Finance & Accounting field
– Icici Currencies 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 Icici Currencies in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Advising on Currency Risk at ICICI Bank firm has clearly differentiated products in the market place. This has enabled Icici Currencies to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Icici Currencies to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Icici Currencies is present in almost all the verticals within the industry. This has provided firm in Advising on Currency Risk at ICICI Bank 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.
Ability to recruit top talent
– Icici Currencies is one of the leading recruiters in the industry. Managers in the Advising on Currency Risk at ICICI Bank are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Icici Currencies 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 Advising on Currency Risk at ICICI Bank HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Advising on Currency Risk at ICICI Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Advising on Currency Risk at ICICI Bank are -
Slow decision making process
– As mentioned earlier in the report, Icici Currencies has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Icici Currencies even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Icici Currencies 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 Advising on Currency Risk at ICICI Bank, it seems that the employees of Icici Currencies 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 Icici Currencies 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 - Advising on Currency Risk at ICICI Bank should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Advising on Currency Risk at ICICI Bank, in the dynamic environment Icici Currencies has struggled to respond to the nimble upstart competition. Icici Currencies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Advising on Currency Risk at ICICI Bank, 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.
Aligning sales with marketing
– It come across in the case study Advising on Currency Risk at ICICI Bank 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 Advising on Currency Risk at ICICI Bank can leverage the sales team experience to cultivate customer relationships as Icici Currencies is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Icici Currencies is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Icici Currencies needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Icici Currencies to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Icici Currencies products
– To increase the profitability and margins on the products, Icici Currencies needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Advising on Currency Risk at ICICI Bank 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 Icici Currencies 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Advising on Currency Risk at ICICI Bank, is just above the industry average. Icici Currencies 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.
Opportunities Advising on Currency Risk at ICICI Bank | 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 Advising on Currency Risk at ICICI Bank are -
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. Icici Currencies can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Icici Currencies 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.
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 Icici Currencies in the consumer business. Now Icici Currencies can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Icici Currencies 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Icici Currencies can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Icici Currencies 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.
Learning at scale
– Online learning technologies has now opened space for Icici Currencies 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.
Using analytics as competitive advantage
– Icici Currencies 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 Advising on Currency Risk at ICICI Bank - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Icici Currencies to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Icici Currencies can use these opportunities to build new business models that can help the communities that Icici Currencies operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Buying journey improvements
– Icici Currencies can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Advising on Currency Risk at ICICI Bank 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.
Leveraging digital technologies
– Icici Currencies 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Icici Currencies 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.
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. Icici Currencies can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Advising on Currency Risk at ICICI Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Advising on Currency Risk at ICICI Bank are -
Environmental challenges
– Icici Currencies 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. Icici Currencies can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Icici Currencies needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Icici Currencies 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.
Technology acceleration in Forth Industrial Revolution
– Icici Currencies has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Icici Currencies 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Advising on Currency Risk at ICICI Bank, Icici Currencies 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 .
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 Icici Currencies business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Icici Currencies 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.
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 Icici Currencies in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Icici Currencies
– 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 Icici Currencies.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Icici Currencies 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 Advising on Currency Risk at ICICI Bank .
Shortening product life cycle
– it is one of the major threat that Icici Currencies is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Icici Currencies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Advising on Currency Risk at ICICI Bank 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 Advising on Currency Risk at ICICI Bank 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 Advising on Currency Risk at ICICI Bank 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 Advising on Currency Risk at ICICI Bank 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 Advising on Currency Risk at ICICI Bank 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 Icici Currencies needs to make to build a sustainable competitive advantage.
