Case Study Description of Shinsei Bank: Developing an Integrated Firm
Tom Pedersen, newly appointed chief learning officer (CLO) of Shinsei Bank in Japan, pondered how he could facilitate development of an integrated culture and transformation of the organization. Shinsei Bank had not developed longstanding tradition or a strong corporate culture. The bank, which was made up of professionals with extremely diverse backgrounds, had to develop an integrated organizational culture. Pedersen had just administered a new performance evaluation program for 17 senior executives. This was the first time that they had been measured against competencies aligned with the corporate vision and values revised in late 2005. He thought the evaluation program was critical for permeating the vision and values throughout the bank and was eager to roll out the program to a larger number of employees next year. Pedersen wondered how he should improve the performance evaluation, and if this was the right process to influence the culture of the bank? He also wondered what other measures might be effective to get employees with diverse backgrounds to work together. How could he create a learning organization at Shinsei Bank?
Swot Analysis of "Shinsei Bank: Developing an Integrated Firm" written by Thomas J. DeLong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shinsei Pedersen facing as an external strategic factors. Some of the topics covered in Shinsei Bank: Developing an Integrated Firm case study are - Strategic Management Strategies, Change management, Collaboration, Developing employees, Diversity, Employee retention, Financial analysis, International business, Joint ventures, Social responsibility, Talent management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Shinsei Bank: Developing an Integrated Firm casestudy better are - – challanges to central banks by blockchain based private currencies, increasing commodity prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing energy prices,
geopolitical disruptions, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Shinsei Bank: Developing an Integrated Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shinsei Bank: Developing an Integrated Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shinsei Pedersen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm can be done for the following purposes –
1. Strategic planning using facts provided in Shinsei Bank: Developing an Integrated Firm case study
2. Improving business portfolio management of Shinsei Pedersen
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 Shinsei Pedersen
Strengths Shinsei Bank: Developing an Integrated Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shinsei Pedersen in Shinsei Bank: Developing an Integrated Firm Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Shinsei Pedersen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Shinsei Pedersen 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 Shinsei Pedersen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shinsei Bank: Developing an Integrated Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Shinsei Pedersen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shinsei Pedersen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Shinsei Bank: Developing an Integrated Firm firm has clearly differentiated products in the market place. This has enabled Shinsei Pedersen to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Shinsei Pedersen to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Shinsei Pedersen is present in almost all the verticals within the industry. This has provided firm in Shinsei Bank: Developing an Integrated Firm case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Shinsei Pedersen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shinsei Pedersen 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.
Organizational Resilience of Shinsei Pedersen
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shinsei Pedersen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Shinsei Pedersen 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 Thomas J. DeLong 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.
Successful track record of launching new products
– Shinsei Pedersen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shinsei Pedersen 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.
Ability to recruit top talent
– Shinsei Pedersen is one of the leading recruiters in the industry. Managers in the Shinsei Bank: Developing an Integrated Firm are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Shinsei Pedersen is one of the most innovative firm in sector. Manager in Shinsei Bank: Developing an Integrated Firm Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Shinsei Bank: Developing an Integrated Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shinsei Bank: Developing an Integrated Firm are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shinsei Pedersen is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shinsei Bank: Developing an Integrated Firm can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Shinsei Bank: Developing an Integrated Firm 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 Shinsei Pedersen has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Shinsei Pedersen 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shinsei Bank: Developing an Integrated Firm, is just above the industry average. Shinsei Pedersen 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.
Low market penetration in new markets
– Outside its home market of Shinsei Pedersen, firm in the HBR case study Shinsei Bank: Developing an Integrated Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Shinsei Bank: Developing an Integrated Firm 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 Shinsei Pedersen 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Thomas J. DeLong suggests that, Shinsei Pedersen 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.
Skills based hiring
– The stress on hiring functional specialists at Shinsei Pedersen 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.
Increasing silos among functional specialists
– The organizational structure of Shinsei Pedersen is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Shinsei Pedersen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shinsei Pedersen to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Shinsei Pedersen 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. Shinsei Pedersen 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.
High cash cycle compare to competitors
Shinsei Pedersen 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.
Opportunities Shinsei Bank: Developing an Integrated Firm | 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 Shinsei Bank: Developing an Integrated Firm are -
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. Shinsei Pedersen can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shinsei Pedersen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Shinsei Pedersen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shinsei Bank: Developing an Integrated Firm 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.
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 Shinsei Pedersen 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.
Learning at scale
– Online learning technologies has now opened space for Shinsei Pedersen 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shinsei Pedersen 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, Shinsei Pedersen is facing challenges because of the dominance of functional experts in the organization. Shinsei Bank: Developing an Integrated Firm 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shinsei Pedersen 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.
Leveraging digital technologies
– Shinsei Pedersen 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.
Building a culture of innovation
– managers at Shinsei Pedersen 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.
Using analytics as competitive advantage
– Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shinsei Pedersen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shinsei Pedersen can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Shinsei Bank: Developing an Integrated Firm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Shinsei Pedersen 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.
Threats Shinsei Bank: Developing an Integrated Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shinsei Bank: Developing an Integrated Firm are -
Stagnating economy with rate increase
– Shinsei Pedersen 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. Shinsei Pedersen 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shinsei Pedersen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Shinsei Pedersen 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shinsei Pedersen 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shinsei Bank: Developing an Integrated Firm, Shinsei Pedersen 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 .
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 Shinsei Pedersen in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Shinsei Pedersen
– 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 Shinsei Pedersen.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shinsei Pedersen 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 Shinsei Bank: Developing an Integrated Firm .
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 Shinsei Pedersen business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Shinsei Pedersen.
Shortening product life cycle
– it is one of the major threat that Shinsei Pedersen is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Bank: Developing an Integrated Firm 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 Shinsei Pedersen needs to make to build a sustainable competitive advantage.
