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 - – technology disruption, there is backlash against globalization, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing commodity prices,
increasing government debt because of Covid-19 spendings, increasing energy prices, 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 -
High brand equity
– Hilal Al has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hilal Al to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
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.
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.
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.
Strong track record of project management
– Hilal Al is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Al Hilal Bank: Setting an Example 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.
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.
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.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Al Hilal Bank: Setting an Example 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 Hilal Al has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Hilal Al is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Hilal Al needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hilal Al to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Hilal Al products
– To increase the profitability and margins on the products, Hilal Al needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Al Hilal Bank: Setting an Example, is just above the industry average. Hilal Al 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.
Slow to strategic competitive environment developments
– As Al Hilal Bank: Setting an Example HBR case study mentions - Hilal Al 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 decision making process
– As mentioned earlier in the report, Hilal Al 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. Hilal Al 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, 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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Al Hilal Bank: Setting an Example, it seems that the employees of Hilal Al 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.
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 -
Learning at scale
– Online learning technologies has now opened space for Hilal Al 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.
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.
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.
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.
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.
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.
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.
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.
Leveraging digital technologies
– Hilal Al 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hilal Al in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
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 Hilal Al 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.
Using analytics as competitive advantage
– Hilal Al 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 Al Hilal Bank: Setting an Example - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hilal Al to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
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.
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 .
Consumer confidence and its impact on Hilal Al 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.
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.
Shortening product life cycle
– it is one of the major threat that Hilal Al is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
High dependence on third party suppliers
– Hilal Al 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
– 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.
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.
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.