KBC Bank and Insurance Holding Company (KBC) (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of KBC Bank and Insurance Holding Company (KBC) (B)
Supplement to case LBS109. This is part of a case series. The case describes the turnaround of the Belgian bank KBC under the leadership of Johan Thijs in the period 2009-2016. The case is made up of three parts - A, B and C. KBC (A) describes the situation in July 2009 when Johan This was promoted to Managing Director (MD) of the Belgian subsidiary, by far the biggest and most important unit within KBC Group. The timing is a bad one for the bank - it had just been rescued through a multibillion euro bailout by the Belgian government and the bank is on the verge of bankruptcy. Morale is at an all-time low, employees feel betrayed and are demotivated and the euro crisis is about to hit the European banking sector just when banks throughout Europe are trying to respond to the financial crisis of 2008. Johan Thijs inherits a total mess in Belgium and the case describes the facts he faces and asks the question: 'What should he do in the Belgian Unit?' At the same time to becoming MD of Belgium, he becomes member of the Group's Executive Committee (ExCo) and the case also raises the question: 'What can Thijs do as a member of the ExCo to prevent the bankruptcy of KBC Group?'
Authors :: Lisa Duke, Constantinos C. Markides, Daniel Oyon
Swot Analysis of "KBC Bank and Insurance Holding Company (KBC) (B)" written by Lisa Duke, Constantinos C. Markides, Daniel Oyon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kbc Belgian facing as an external strategic factors. Some of the topics covered in KBC Bank and Insurance Holding Company (KBC) (B) case study are - Strategic Management Strategies, Leadership, Recession and Strategy & Execution.
Some of the macro environment factors that can be used to understand the KBC Bank and Insurance Holding Company (KBC) (B) casestudy better are - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of KBC Bank and Insurance Holding Company (KBC) (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in KBC Bank and Insurance Holding Company (KBC) (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kbc Belgian, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kbc Belgian 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 KBC Bank and Insurance Holding Company (KBC) (B) can be done for the following purposes –
1. Strategic planning using facts provided in KBC Bank and Insurance Holding Company (KBC) (B) case study
2. Improving business portfolio management of Kbc Belgian
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kbc Belgian
Strengths KBC Bank and Insurance Holding Company (KBC) (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kbc Belgian in KBC Bank and Insurance Holding Company (KBC) (B) Harvard Business Review case study are -
Analytics focus
– Kbc Belgian 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 Lisa Duke, Constantinos C. Markides, Daniel Oyon 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.
Superior customer experience
– The customer experience strategy of Kbc Belgian in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Kbc Belgian has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in KBC Bank and Insurance Holding Company (KBC) (B) 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.
Diverse revenue streams
– Kbc Belgian is present in almost all the verticals within the industry. This has provided firm in KBC Bank and Insurance Holding Company (KBC) (B) 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.
Innovation driven organization
– Kbc Belgian is one of the most innovative firm in sector. Manager in KBC Bank and Insurance Holding Company (KBC) (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Kbc Belgian 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 KBC Bank and Insurance Holding Company (KBC) (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Kbc Belgian 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 Kbc Belgian in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Kbc Belgian 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 Kbc Belgian is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in KBC Bank and Insurance Holding Company (KBC) (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Kbc Belgian has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kbc Belgian 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.
Sustainable margins compare to other players in Strategy & Execution industry
– KBC Bank and Insurance Holding Company (KBC) (B) firm has clearly differentiated products in the market place. This has enabled Kbc Belgian to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Kbc Belgian to invest into research and development (R&D) and innovation.
High brand equity
– Kbc Belgian has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kbc Belgian to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Kbc Belgian 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.
Weaknesses KBC Bank and Insurance Holding Company (KBC) (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KBC Bank and Insurance Holding Company (KBC) (B) are -
Skills based hiring
– The stress on hiring functional specialists at Kbc Belgian 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.
No frontier risks strategy
– After analyzing the HBR case study KBC Bank and Insurance Holding Company (KBC) (B), it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Low market penetration in new markets
– Outside its home market of Kbc Belgian, firm in the HBR case study KBC Bank and Insurance Holding Company (KBC) (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Kbc Belgian 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.
Aligning sales with marketing
– It come across in the case study KBC Bank and Insurance Holding Company (KBC) (B) 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 KBC Bank and Insurance Holding Company (KBC) (B) can leverage the sales team experience to cultivate customer relationships as Kbc Belgian is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As KBC Bank and Insurance Holding Company (KBC) (B) HBR case study mentions - Kbc Belgian 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kbc Belgian is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study KBC Bank and Insurance Holding Company (KBC) (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study KBC Bank and Insurance Holding Company (KBC) (B), it seems that the employees of Kbc Belgian 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study KBC Bank and Insurance Holding Company (KBC) (B), is just above the industry average. Kbc Belgian 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Lisa Duke, Constantinos C. Markides, Daniel Oyon suggests that, Kbc Belgian 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.
Products dominated business model
– Even though Kbc Belgian 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 - KBC Bank and Insurance Holding Company (KBC) (B) should strive to include more intangible value offerings along with its core products and services.
Opportunities KBC Bank and Insurance Holding Company (KBC) (B) | 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 KBC Bank and Insurance Holding Company (KBC) (B) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kbc Belgian can use these opportunities to build new business models that can help the communities that Kbc Belgian operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kbc Belgian in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Kbc Belgian can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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 Kbc Belgian in the consumer business. Now Kbc Belgian can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Kbc Belgian can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Kbc Belgian can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. KBC Bank and Insurance Holding Company (KBC) (B) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kbc Belgian 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kbc Belgian 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 Kbc Belgian to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Kbc Belgian 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 Strategy & Execution segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kbc Belgian is facing challenges because of the dominance of functional experts in the organization. KBC Bank and Insurance Holding Company (KBC) (B) 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.
Loyalty marketing
– Kbc Belgian 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.
Leveraging digital technologies
– Kbc Belgian 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.
Learning at scale
– Online learning technologies has now opened space for Kbc Belgian 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 KBC Bank and Insurance Holding Company (KBC) (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study KBC Bank and Insurance Holding Company (KBC) (B) are -
Stagnating economy with rate increase
– Kbc Belgian 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.
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 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. Kbc Belgian needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Kbc Belgian 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 Strategy & Execution industry regulations.
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. Kbc Belgian 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.
Environmental challenges
– Kbc Belgian 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. Kbc Belgian can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kbc Belgian in the Strategy & Execution industry. The Strategy & Execution 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.
High dependence on third party suppliers
– Kbc Belgian 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 acceleration in Forth Industrial Revolution
– Kbc Belgian has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Kbc Belgian needs to keep up with the evolution of technology in the Strategy & Execution 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 Kbc Belgian 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.
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 Kbc Belgian business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kbc Belgian 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 KBC Bank and Insurance Holding Company (KBC) (B) 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 KBC Bank and Insurance Holding Company (KBC) (B) 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 KBC Bank and Insurance Holding Company (KBC) (B) 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 KBC Bank and Insurance Holding Company (KBC) (B) 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 KBC Bank and Insurance Holding Company (KBC) (B) 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 Kbc Belgian needs to make to build a sustainable competitive advantage.