Al Hilal Bank: Setting an Example SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Al Hilal Bank: Setting an Example
On December 22, 2010, the chief executive office (CEO) of Al Hilal Bank was preparing to address a group of international banking executives who were interested in understanding what decisions had contributed to Al Hilal's success thus far, and what challenges the bank would face for 2011 and beyond. In two and a half years, Al Hilal had developed a respected and fast-growing Islamic bank. The Al Hilal team had combined a foundation of strong corporate governance practices, a strong risk management framework and an innovative customer service culture. As concrete proof of its success, it had become profitable in the third quarter of 2009, and profits were rising rapidly.
Swot Analysis of "Al Hilal Bank: Setting an Example" written by Assem Safieddine, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hilal Al facing as an external strategic factors. Some of the topics covered in Al Hilal Bank: Setting an Example case study are - Strategic Management Strategies, International business, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Al Hilal Bank: Setting an Example casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Al Hilal Bank: Setting an Example
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Al Hilal Bank: Setting an Example case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hilal Al, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hilal Al 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 Al Hilal Bank: Setting an Example can be done for the following purposes –
1. Strategic planning using facts provided in Al Hilal Bank: Setting an Example case study
2. Improving business portfolio management of Hilal Al
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 Hilal Al
Strengths Al Hilal Bank: Setting an Example | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hilal Al in Al Hilal Bank: Setting an Example Harvard Business Review case study are -
Highly skilled collaborators
– Hilal Al 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 Al Hilal Bank: Setting an Example HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Hilal Al 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.
Effective Research and Development (R&D)
– Hilal Al 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 Al Hilal Bank: Setting an Example - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Hilal Al has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hilal Al 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.
Organizational Resilience of Hilal Al
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hilal Al does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Hilal Al is one of the leading recruiters in the industry. Managers in the Al Hilal Bank: Setting an Example are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Hilal Al 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 Hilal Al is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Al Hilal Bank: Setting an Example Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Hilal Al digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hilal Al has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Finance & Accounting industry
– Al Hilal Bank: Setting an Example firm has clearly differentiated products in the market place. This has enabled Hilal Al to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Hilal Al to invest into research and development (R&D) and innovation.
Innovation driven organization
– Hilal Al is one of the most innovative firm in sector. Manager in Al Hilal Bank: Setting an Example Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Hilal Al in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Finance & Accounting field
– Hilal Al 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 Hilal Al in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Al Hilal Bank: Setting an Example | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Al Hilal Bank: Setting an Example are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Al Hilal Bank: Setting an Example, in the dynamic environment Hilal Al has struggled to respond to the nimble upstart competition. Hilal Al 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 Al Hilal Bank: Setting an Example, 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.
Interest costs
– Compare to the competition, Hilal Al 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Al Hilal Bank: Setting an Example 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 Hilal Al 's lucrative customers.
High cash cycle compare to competitors
Hilal Al 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.
Capital Spending Reduction
– Even during the low interest decade, Hilal Al 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.
Need for greater diversity
– Hilal Al 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.
Skills based hiring
– The stress on hiring functional specialists at Hilal Al has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hilal Al supply chain. Even after few cautionary changes mentioned in the HBR case study - Al Hilal Bank: Setting an Example, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hilal Al vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Hilal Al 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 - Al Hilal Bank: Setting an Example 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 Al Hilal Bank: Setting an Example 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 Al Hilal Bank: Setting an Example can leverage the sales team experience to cultivate customer relationships as Hilal Al is planning to shift buying processes online.
Opportunities Al Hilal Bank: Setting an Example | 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 Al Hilal Bank: Setting an Example are -
Buying journey improvements
– Hilal Al can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Al Hilal Bank: Setting an Example 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hilal Al 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 Hilal Al to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Hilal Al to increase its market reach. Hilal Al 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.
Loyalty marketing
– Hilal Al 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hilal Al can use these opportunities to build new business models that can help the communities that Hilal Al operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Hilal Al can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Hilal Al can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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 Hilal Al in the consumer business. Now Hilal Al can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hilal Al can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hilal Al 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.
Creating value in data economy
– The success of analytics program of Hilal Al has opened avenues for new revenue streams for the organization in the industry. This can help Hilal Al to build a more holistic ecosystem as suggested in the Al Hilal Bank: Setting an Example case study. Hilal Al can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hilal Al can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hilal Al can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hilal Al can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Al Hilal Bank: Setting an Example External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Al Hilal Bank: Setting an Example are -
Environmental challenges
– Hilal Al 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. Hilal Al can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hilal Al with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Al Hilal Bank: Setting an Example, Hilal Al 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 .
Increasing wage structure of Hilal Al
– 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 Hilal Al.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hilal Al 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.
Technology acceleration in Forth Industrial Revolution
– Hilal Al has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Hilal Al 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.
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 Hilal Al in the Finance & Accounting sector and impact the bottomline 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. Hilal Al 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.
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 Hilal Al business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Hilal Al needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hilal Al 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 Al Hilal Bank: Setting an Example .
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. Hilal Al can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Hilal Al needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Al Hilal Bank: Setting an Example 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 Al Hilal Bank: Setting an Example 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 Al Hilal Bank: Setting an Example 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 Al Hilal Bank: Setting an Example 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 Al Hilal Bank: Setting an Example 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 Hilal Al needs to make to build a sustainable competitive advantage.
