Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency

The Chinese financial system has historically been one of secrecy, distrust, and corruption. The process does not align with the western standards of transparency and auditing. In contrast to the transaction-based business culture of the West, Chinese business society is relationship-based (quanxi), which still seems to play a key role in the credit decision. With the growth of the emerging middle class, access to financial instruments such as credit cards, life insurance, stock purchases, and the like will play a greater role in the life of the Chinese consumer. Based on these forecasts, the authors recommend seven actions to manage financial activities in China, all of which are explored within this article.a€‚a€‚a€‚a€‚a€‚

Authors :: Michael Horrocks, Venkataramanan Ramaswamy, Ken Rupp

Topics :: Global Business

Tags :: , SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency" written by Michael Horrocks, Venkataramanan Ramaswamy, Ken Rupp includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A Chinese facing as an external strategic factors. Some of the topics covered in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency case study are - Strategic Management Strategies, and Global Business.

Some of the macro environment factors that can be used to understand the Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency casestudy better are - – geopolitical disruptions, technology disruption, central banks are concerned over increasing inflation, increasing energy prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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Introduction to SWOT Analysis of Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A Chinese, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A Chinese 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency can be done for the following purposes –
1. Strategic planning using facts provided in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency case study
2. Improving business portfolio management of A Chinese
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 A Chinese

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Strengths Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of A Chinese in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency Harvard Business Review case study are -

Innovation driven organization

– A Chinese is one of the most innovative firm in sector. Manager in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Diverse revenue streams

– A Chinese is present in almost all the verticals within the industry. This has provided firm in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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.

Ability to lead change in Global Business field

– A Chinese 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 A Chinese in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

- A Chinese 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 A Chinese is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– A Chinese has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. A Chinese 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.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For A Chinese digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. A Chinese 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.

Effective Research and Development (R&D)

– A Chinese 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that A Chinese 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.

Cross disciplinary teams

– Horizontal connected teams at the A Chinese 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 A Chinese in the sector have low bargaining power. Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A Chinese to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of A Chinese in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– A Chinese 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 Michael Horrocks, Venkataramanan Ramaswamy, Ken Rupp 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.

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Weaknesses Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency are -

Slow to strategic competitive environment developments

– As Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency HBR case study mentions - A Chinese 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.

Increasing silos among functional specialists

– The organizational structure of A Chinese is dominated by functional specialists. It is not different from other players in the Global Business segment. A Chinese needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help A Chinese to focus more on services rather than just following the product oriented approach.

High cash cycle compare to competitors

A Chinese 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, Michael Horrocks, Venkataramanan Ramaswamy, Ken Rupp suggests that, A Chinese 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 A Chinese 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency, in the dynamic environment A Chinese has struggled to respond to the nimble upstart competition. A Chinese has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, A Chinese 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.

Aligning sales with marketing

– It come across in the case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency can leverage the sales team experience to cultivate customer relationships as A Chinese is planning to shift buying processes online.

Lack of clear differentiation of A Chinese products

– To increase the profitability and margins on the products, A Chinese needs to provide more differentiated products than what it is currently offering in the marketplace.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency, it seems that the employees of A Chinese 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.

Products dominated business model

– Even though A Chinese 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 - Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency should strive to include more intangible value offerings along with its core products and services.

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Opportunities Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency | 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency are -

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects A Chinese can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Building a culture of innovation

– managers at A Chinese 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 Global Business segment.

Redefining models of collaboration and team work

– As explained in the weaknesses section, A Chinese is facing challenges because of the dominance of functional experts in the organization. Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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.

Buying journey improvements

– A Chinese can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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.

Leveraging digital technologies

– A Chinese 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.

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. A Chinese can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, A Chinese 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, Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for A Chinese 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 A Chinese to hire the very best people irrespective of their geographical location.

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. A Chinese can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Manufacturing automation

– A Chinese 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.

Loyalty marketing

– A Chinese 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.

Using analytics as competitive advantage

– A Chinese 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency - to build a competitive advantage using analytics. The analytics driven competitive advantage can help A Chinese to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Low interest rates

– Even though inflation is raising its head in most developed economies, A Chinese 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.

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Threats Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency are -

Environmental challenges

– A Chinese 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. A Chinese can take advantage of this fund but it will also bring new competitors in the Global Business industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency, A Chinese 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 .

Stagnating economy with rate increase

– A Chinese 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents A Chinese with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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.

Technology acceleration in Forth Industrial Revolution

– A Chinese has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, A Chinese 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, A Chinese 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency .

Increasing wage structure of A Chinese

– 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 A Chinese.

Regulatory challenges

– A Chinese 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.

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. A Chinese can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. A Chinese will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for A Chinese 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.

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.

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Weighted SWOT Analysis of Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 A Chinese needs to make to build a sustainable competitive advantage.

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