Revitalizing State Bank of India SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Revitalizing State Bank of India
State Bank of India is India's oldest and largest bank with the government of India as its majority shareholder. Arundhati Bhattacharya, a 35-year old veteran of the bank, is appointed as its chairman in October 2013. Her appointment coincides with Moody's downgrading the bank's debt due to rising non-performing assets. She embarks on a mission to improve the bank's risk taking and management abilities, ensure uniform customer experience, and encourage greater collaboration among various verticals. Her efforts help the bank reduce it non-performing assets and improve its profitability. However, Bhattacharya knows that these gains will be fleeting without the development of a trained workforce who can address 21st century industry problems with speed and creativity. This requires transforming SBI into a performance-oriented bank supported by a new career development and remuneration system. Bhattacharya wonders if attempting to change the culture of a 206-year old mammoth organization is feasible or a mere pipe dream.
Authors :: Srikant M. Datar, N. M. Bhatta, Rishikesha Krishnan, Rachna Tahilyani
Swot Analysis of "Revitalizing State Bank of India" written by Srikant M. Datar, N. M. Bhatta, Rishikesha Krishnan, Rachna Tahilyani includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bhattacharya Bank facing as an external strategic factors. Some of the topics covered in Revitalizing State Bank of India case study are - Strategic Management Strategies, Change management, Communication, Compensation, Financial management, Financial markets, Labor, Leadership, Organizational culture, Personnel policies, Social responsibility and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Revitalizing State Bank of India casestudy better are - – technology disruption, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is backlash against globalization, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Revitalizing State Bank of India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Revitalizing State Bank of India case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bhattacharya Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bhattacharya Bank 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 Revitalizing State Bank of India can be done for the following purposes –
1. Strategic planning using facts provided in Revitalizing State Bank of India case study
2. Improving business portfolio management of Bhattacharya Bank
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 Bhattacharya Bank
Strengths Revitalizing State Bank of India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bhattacharya Bank in Revitalizing State Bank of India Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Revitalizing State Bank of India 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 Bhattacharya Bank in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Bhattacharya Bank
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bhattacharya Bank does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Bhattacharya Bank 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 Revitalizing State Bank of India HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Bhattacharya Bank digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bhattacharya Bank 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.
High switching costs
– The high switching costs that Bhattacharya Bank 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.
Training and development
– Bhattacharya Bank has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Revitalizing State Bank of India 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.
High brand equity
– Bhattacharya Bank has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bhattacharya Bank to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Bhattacharya Bank is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Bhattacharya Bank is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Srikant M. Datar, N. M. Bhatta, Rishikesha Krishnan, Rachna Tahilyani can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Bhattacharya Bank in the sector have low bargaining power. Revitalizing State Bank of India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bhattacharya Bank to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Bhattacharya Bank is one of the leading recruiters in the industry. Managers in the Revitalizing State Bank of India are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Revitalizing State Bank of India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Revitalizing State Bank of India are -
Aligning sales with marketing
– It come across in the case study Revitalizing State Bank of India 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 Revitalizing State Bank of India can leverage the sales team experience to cultivate customer relationships as Bhattacharya Bank is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Bhattacharya Bank 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Revitalizing State Bank of India, is just above the industry average. Bhattacharya Bank 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.
Interest costs
– Compare to the competition, Bhattacharya Bank 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 Revitalizing State Bank of India 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 Bhattacharya Bank 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Bhattacharya Bank has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Revitalizing State Bank of India, 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.
Capital Spending Reduction
– Even during the low interest decade, Bhattacharya Bank 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.
Low market penetration in new markets
– Outside its home market of Bhattacharya Bank, firm in the HBR case study Revitalizing State Bank of India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Bhattacharya Bank is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Bhattacharya Bank needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bhattacharya Bank to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Revitalizing State Bank of India, it seems that the employees of Bhattacharya Bank 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 Revitalizing State Bank of India | 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 Revitalizing State Bank of India are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Bhattacharya Bank 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bhattacharya Bank 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bhattacharya Bank is facing challenges because of the dominance of functional experts in the organization. Revitalizing State Bank of India case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Bhattacharya Bank 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.
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 Bhattacharya Bank 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.
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. Bhattacharya Bank 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. Bhattacharya Bank 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bhattacharya Bank can use these opportunities to build new business models that can help the communities that Bhattacharya Bank operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Manufacturing automation
– Bhattacharya Bank 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.
Using analytics as competitive advantage
– Bhattacharya Bank 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 Revitalizing State Bank of India - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bhattacharya Bank to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Bhattacharya Bank has opened avenues for new revenue streams for the organization in the industry. This can help Bhattacharya Bank to build a more holistic ecosystem as suggested in the Revitalizing State Bank of India case study. Bhattacharya Bank can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Bhattacharya Bank 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.
Developing new processes and practices
– Bhattacharya Bank 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bhattacharya Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Revitalizing State Bank of India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Revitalizing State Bank of India 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.
Environmental challenges
– Bhattacharya Bank 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. Bhattacharya Bank can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bhattacharya Bank 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 Revitalizing State Bank of India .
Technology acceleration in Forth Industrial Revolution
– Bhattacharya Bank has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Bhattacharya Bank 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.
High dependence on third party suppliers
– Bhattacharya Bank 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.
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. Bhattacharya Bank needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Bhattacharya Bank 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.
Regulatory challenges
– Bhattacharya Bank 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.
Stagnating economy with rate increase
– Bhattacharya Bank 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.
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. Bhattacharya Bank 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.
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. Bhattacharya Bank can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Bhattacharya Bank in the Finance & Accounting sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Revitalizing State Bank of India, Bhattacharya Bank 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 .
Weighted SWOT Analysis of Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Revitalizing State Bank of India 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 Bhattacharya Bank needs to make to build a sustainable competitive advantage.
