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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing energy prices, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity 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 -
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.
Highly skilled collaborators
– Kbc Belgian 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 KBC Bank and Insurance Holding Company (KBC) (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Kbc Belgian
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kbc Belgian does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Kbc Belgian 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.
Operational resilience
– The operational resilience strategy in the KBC Bank and Insurance Holding Company (KBC) (B) 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.
Ability to recruit top talent
– Kbc Belgian is one of the leading recruiters in the industry. Managers in the KBC Bank and Insurance Holding Company (KBC) (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Kbc Belgian 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
– 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.
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.
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 -
Lack of clear differentiation of Kbc Belgian products
– To increase the profitability and margins on the products, Kbc Belgian needs to provide more differentiated products than what it is currently offering in the marketplace.
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 decision making process
– As mentioned earlier in the report, Kbc Belgian 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. Kbc Belgian 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kbc Belgian 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.
Interest costs
– Compare to the competition, Kbc Belgian 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.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the KBC Bank and Insurance Holding Company (KBC) (B) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Kbc Belgian has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Kbc Belgian 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 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.
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 -
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.
Better consumer reach
– The expansion of the 5G network will help Kbc Belgian to increase its market reach. Kbc Belgian 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.
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.
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.
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. Kbc Belgian can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Using analytics as competitive advantage
– Kbc Belgian 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 KBC Bank and Insurance Holding Company (KBC) (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kbc Belgian to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kbc Belgian can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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 Kbc Belgian 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.
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.
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 -
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study KBC Bank and Insurance Holding Company (KBC) (B), Kbc Belgian may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Shortening product life cycle
– it is one of the major threat that Kbc Belgian is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kbc Belgian.
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.
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.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kbc Belgian 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
– 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.
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.
