First National Bank's Golden Opportunity SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
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Case Study Description of First National Bank's Golden Opportunity
Executives at First National Bank in South Africa are considering whether to launch a potentially exciting, but rather unorthodox, new savings product. Instead of paying interest, this product gives depositors the chance to win large cash prizes each month. Michael Jordan, CEO of the bank's Consumer Solutions Division, must decide whether to approve the product, weighing the potential benefits against large upfront investment, uncertain market demand, and the complication that the product might face legal challenges.
Authors :: Shawn Cole, Peter Tufano, Daniel Schneider, Daryl Collins
Swot Analysis of "First National Bank's Golden Opportunity" written by Shawn Cole, Peter Tufano, Daniel Schneider, Daryl Collins includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bank's Product facing as an external strategic factors. Some of the topics covered in First National Bank's Golden Opportunity case study are - Strategic Management Strategies, Economy, Emerging markets, Financial management, Innovation and Finance & Accounting.
Some of the macro environment factors that can be used to understand the First National Bank's Golden Opportunity casestudy better are - – wage bills are increasing, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of First National Bank's Golden Opportunity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in First National Bank's Golden Opportunity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank's Product, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank's Product 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 First National Bank's Golden Opportunity can be done for the following purposes –
1. Strategic planning using facts provided in First National Bank's Golden Opportunity case study
2. Improving business portfolio management of Bank's Product
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 Bank's Product
Strengths First National Bank's Golden Opportunity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bank's Product in First National Bank's Golden Opportunity Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– First National Bank's Golden Opportunity firm has clearly differentiated products in the market place. This has enabled Bank's Product to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Bank's Product to invest into research and development (R&D) and innovation.
Learning organization
- Bank's Product 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 Bank's Product is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in First National Bank's Golden Opportunity Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Bank's Product 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.
Low bargaining power of suppliers
– Suppliers of Bank's Product in the sector have low bargaining power. First National Bank's Golden Opportunity has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bank's Product to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the First National Bank's Golden Opportunity 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.
Superior customer experience
– The customer experience strategy of Bank's Product in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Bank's Product has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in First National Bank's Golden Opportunity 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.
Ability to recruit top talent
– Bank's Product is one of the leading recruiters in the industry. Managers in the First National Bank's Golden Opportunity 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 brand equity
– Bank's Product has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bank's Product to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Bank's Product 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 Bank's Product in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Bank's Product digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bank's Product 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.
Strong track record of project management
– Bank's Product is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses First National Bank's Golden Opportunity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of First National Bank's Golden Opportunity are -
Interest costs
– Compare to the competition, Bank's Product 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the First National Bank's Golden Opportunity 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 Bank's Product has relatively successful track record of launching new products.
High cash cycle compare to competitors
Bank's Product 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Shawn Cole, Peter Tufano, Daniel Schneider, Daryl Collins suggests that, Bank's Product 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.
No frontier risks strategy
– After analyzing the HBR case study First National Bank's Golden Opportunity, 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.
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 Bank's Product supply chain. Even after few cautionary changes mentioned in the HBR case study - First National Bank's Golden Opportunity, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bank's Product vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Bank's Product products
– To increase the profitability and margins on the products, Bank's Product needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Bank's Product 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.
Skills based hiring
– The stress on hiring functional specialists at Bank's Product 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.
Slow decision making process
– As mentioned earlier in the report, Bank's Product 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. Bank's Product 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study First National Bank's Golden Opportunity, in the dynamic environment Bank's Product has struggled to respond to the nimble upstart competition. Bank's Product has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities First National Bank's Golden Opportunity | 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 First National Bank's Golden Opportunity are -
Building a culture of innovation
– managers at Bank's Product can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
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 Bank's Product 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.
Creating value in data economy
– The success of analytics program of Bank's Product has opened avenues for new revenue streams for the organization in the industry. This can help Bank's Product to build a more holistic ecosystem as suggested in the First National Bank's Golden Opportunity case study. Bank's Product 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. Bank's Product 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. Bank's Product 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 Bank's Product can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bank's Product is facing challenges because of the dominance of functional experts in the organization. First National Bank's Golden Opportunity 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bank's Product 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 Bank's Product to hire the very best people irrespective of their geographical location.
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. Bank's Product can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Bank's Product can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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 Bank's Product in the consumer business. Now Bank's Product can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Bank's Product can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. First National Bank's Golden Opportunity 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.
Loyalty marketing
– Bank's Product 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
– Bank's Product 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.
Threats First National Bank's Golden Opportunity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study First National Bank's Golden Opportunity are -
Regulatory challenges
– Bank's Product 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 wage structure of Bank's Product
– 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 Bank's Product.
Environmental challenges
– Bank's Product 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. Bank's Product can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Shortening product life cycle
– it is one of the major threat that Bank's Product is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Bank's Product business can come under increasing regulations regarding data privacy, data security, etc.
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 Bank's Product in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Bank's Product has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Bank's Product 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bank's Product 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
– Bank's Product 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bank's Product 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 First National Bank's Golden Opportunity .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bank's Product 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 First National Bank's Golden Opportunity 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 First National Bank's Golden Opportunity 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 First National Bank's Golden Opportunity 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 First National Bank's Golden Opportunity 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 First National Bank's Golden Opportunity 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 Bank's Product needs to make to build a sustainable competitive advantage.