Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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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
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 - – increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, technology disruption, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
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.
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
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 -
Ability to recruit top talent
– A Chinese is one of the leading recruiters in the industry. Managers in the Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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
– A Chinese 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 Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Strong track record of project management
– A Chinese is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Training and development
– A Chinese has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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.
Organizational Resilience of A Chinese
– The covid-19 pandemic has put organizational resilience at the centre of everthing that A Chinese does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of A Chinese, firm in the HBR case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency 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 A Chinese has relatively successful track record of launching new products.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Financial Reforms in Chinese Banking: The Impact on Personal Lending and Operational Efficiency, is just above the industry average. A Chinese 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.
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.
Interest costs
– Compare to the competition, A Chinese 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.
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, A Chinese 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.
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 -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for A Chinese in the consumer business. Now A Chinese can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Learning at scale
– Online learning technologies has now opened space for A Chinese 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.
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 A Chinese 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, A Chinese can use these opportunities to build new business models that can help the communities that A Chinese operates in. Secondly it can use opportunities from government spending in Global Business sector.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help A Chinese to increase its market reach. A Chinese 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.
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.
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 -
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.
Consumer confidence and its impact on A Chinese 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that A Chinese is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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 A Chinese in the Global Business sector and impact the bottomline of the organization.
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.
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 A Chinese.
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 .
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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