Are Foreign Banks Sure Winners in Post-WTO China? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Are Foreign Banks Sure Winners in Post-WTO China?
Five years following China's accession to the World Trade Organization (WTO), foreign banks are scheduled to be granted full access to the country's vast local currency in December 2006. The foreign banks' competitive attributes, such as size and international banking experience, have facilitated their entry into China. These efforts, however, have been countered by the improving competitiveness of Chinese banks. Further prompted by high entry and operating costs in Renminbi (Rmb) business, foreign banks have engaged in different strategic responses to these challenges. All things considered, it is envisaged that only a very small number of foreign banks will be able to emerge as big players in the Chinese banking market.
Swot Analysis of "Are Foreign Banks Sure Winners in Post-WTO China?" written by M.K. Leung, Ricky Y.K. Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banks Foreign facing as an external strategic factors. Some of the topics covered in Are Foreign Banks Sure Winners in Post-WTO China? case study are - Strategic Management Strategies, Global strategy and Global Business.
Some of the macro environment factors that can be used to understand the Are Foreign Banks Sure Winners in Post-WTO China? casestudy better are - – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing commodity prices, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , wage bills are increasing, etc
Introduction to SWOT Analysis of Are Foreign Banks Sure Winners in Post-WTO China?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Are Foreign Banks Sure Winners in Post-WTO China? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banks Foreign, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banks Foreign 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 Are Foreign Banks Sure Winners in Post-WTO China? can be done for the following purposes –
1. Strategic planning using facts provided in Are Foreign Banks Sure Winners in Post-WTO China? case study
2. Improving business portfolio management of Banks Foreign
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Banks Foreign
Strengths Are Foreign Banks Sure Winners in Post-WTO China? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banks Foreign in Are Foreign Banks Sure Winners in Post-WTO China? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Are Foreign Banks Sure Winners in Post-WTO China? 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.
Analytics focus
– Banks Foreign 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 M.K. Leung, Ricky Y.K. Chan 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.
Ability to recruit top talent
– Banks Foreign is one of the leading recruiters in the industry. Managers in the Are Foreign Banks Sure Winners in Post-WTO China? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Banks Foreign is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Banks Foreign in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Global Business industry
– Are Foreign Banks Sure Winners in Post-WTO China? firm has clearly differentiated products in the market place. This has enabled Banks Foreign to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Banks Foreign to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Banks Foreign 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 Are Foreign Banks Sure Winners in Post-WTO China? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Banks Foreign 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 Banks Foreign is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Are Foreign Banks Sure Winners in Post-WTO China? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Banks Foreign 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.
Highly skilled collaborators
– Banks Foreign 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 Are Foreign Banks Sure Winners in Post-WTO China? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Banks Foreign digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Banks Foreign 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 Banks Foreign
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Banks Foreign does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Are Foreign Banks Sure Winners in Post-WTO China? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Are Foreign Banks Sure Winners in Post-WTO China? are -
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 Banks Foreign supply chain. Even after few cautionary changes mentioned in the HBR case study - Are Foreign Banks Sure Winners in Post-WTO China?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Banks Foreign vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Are Foreign Banks Sure Winners in Post-WTO China?, in the dynamic environment Banks Foreign has struggled to respond to the nimble upstart competition. Banks Foreign has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Banks Foreign has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Aligning sales with marketing
– It come across in the case study Are Foreign Banks Sure Winners in Post-WTO China? 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 Are Foreign Banks Sure Winners in Post-WTO China? can leverage the sales team experience to cultivate customer relationships as Banks Foreign is planning to shift buying processes online.
Products dominated business model
– Even though Banks Foreign has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Are Foreign Banks Sure Winners in Post-WTO China? should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Are Foreign Banks Sure Winners in Post-WTO China?, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Slow to strategic competitive environment developments
– As Are Foreign Banks Sure Winners in Post-WTO China? HBR case study mentions - Banks Foreign 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Are Foreign Banks Sure Winners in Post-WTO China?, is just above the industry average. Banks Foreign 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Banks Foreign 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.
Interest costs
– Compare to the competition, Banks Foreign 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 Are Foreign Banks Sure Winners in Post-WTO China? 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 Banks Foreign has relatively successful track record of launching new products.
Opportunities Are Foreign Banks Sure Winners in Post-WTO China? | 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 Are Foreign Banks Sure Winners in Post-WTO China? are -
Better consumer reach
– The expansion of the 5G network will help Banks Foreign to increase its market reach. Banks Foreign will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Manufacturing automation
– Banks Foreign can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Banks Foreign can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Banks Foreign 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 Banks Foreign to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Banks Foreign is facing challenges because of the dominance of functional experts in the organization. Are Foreign Banks Sure Winners in Post-WTO China? 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, Banks Foreign 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.
Developing new processes and practices
– Banks Foreign can develop new processes and procedures in Global Business 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Banks Foreign 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. Banks Foreign 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 Banks Foreign can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Banks Foreign 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 Banks Foreign in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business 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 Banks Foreign 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.
Loyalty marketing
– Banks Foreign 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 Are Foreign Banks Sure Winners in Post-WTO China? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Are Foreign Banks Sure Winners in Post-WTO China? are -
Environmental challenges
– Banks Foreign 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. Banks Foreign can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Banks Foreign 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 Global Business industry regulations.
Technology acceleration in Forth Industrial Revolution
– Banks Foreign has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Banks Foreign needs to keep up with the evolution of technology in the Global Business 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.
Shortening product life cycle
– it is one of the major threat that Banks Foreign is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Banks Foreign in the Global Business industry. The Global Business 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.
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. Banks Foreign 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.
Increasing wage structure of Banks Foreign
– 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 Banks Foreign.
High dependence on third party suppliers
– Banks Foreign 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Banks Foreign with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Banks Foreign 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Banks Foreign can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Are Foreign Banks Sure Winners in Post-WTO China?, Banks Foreign may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Weighted SWOT Analysis of Are Foreign Banks Sure Winners in Post-WTO China? 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 Are Foreign Banks Sure Winners in Post-WTO China? 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 Are Foreign Banks Sure Winners in Post-WTO China? 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 Are Foreign Banks Sure Winners in Post-WTO China? 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 Are Foreign Banks Sure Winners in Post-WTO China? 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 Banks Foreign needs to make to build a sustainable competitive advantage.