SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform
Looks at the challenges and opportunities faced by SAP as it works to expand its position in the vertical market for financial services software. The German software company faced formidable challenges from competitors such as IBM and Oracle and had to contend with internal strategy-making challenges while it sought to increase its market share of this lucrative and fast-growing industry segment.
Authors :: Robert A. Burgelman, Jean-Bernard Rolland
Swot Analysis of "SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform" written by Robert A. Burgelman, Jean-Bernard Rolland includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sap Banking facing as an external strategic factors. Some of the topics covered in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform case study are - Strategic Management Strategies, Strategy and Global Business.
Some of the macro environment factors that can be used to understand the SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform casestudy better are - – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing commodity prices, wage bills are increasing, there is backlash against globalization, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sap Banking, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sap Banking 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform can be done for the following purposes –
1. Strategic planning using facts provided in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform case study
2. Improving business portfolio management of Sap Banking
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 Sap Banking
Strengths SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sap Banking in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Sap Banking in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Sap Banking 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 Robert A. Burgelman, Jean-Bernard Rolland 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.
Highly skilled collaborators
– Sap Banking 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Sap Banking has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Sap Banking digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sap Banking 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.
Ability to lead change in Global Business field
– Sap Banking 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 Sap Banking in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Sap Banking in the sector have low bargaining power. SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sap Banking to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Global Business industry
– SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform firm has clearly differentiated products in the market place. This has enabled Sap Banking to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Sap Banking to invest into research and development (R&D) and innovation.
Strong track record of project management
– Sap Banking 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
- Sap Banking 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 Sap Banking is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Sap Banking is present in almost all the verticals within the industry. This has provided firm in SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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.
Organizational Resilience of Sap Banking
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Sap Banking does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform, in the dynamic environment Sap Banking has struggled to respond to the nimble upstart competition. Sap Banking has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Sap Banking, firm in the HBR case study SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 Sap Banking has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform can leverage the sales team experience to cultivate customer relationships as Sap Banking is planning to shift buying processes online.
Products dominated business model
– Even though Sap Banking 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 - SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Sap Banking 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform, is just above the industry average. Sap Banking 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 decision making process
– As mentioned earlier in the report, Sap Banking 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. Sap Banking 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.
Increasing silos among functional specialists
– The organizational structure of Sap Banking is dominated by functional specialists. It is not different from other players in the Global Business segment. Sap Banking needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sap Banking to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform, it seems that the employees of Sap Banking 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.
No frontier risks strategy
– After analyzing the HBR case study SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform, 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.
Opportunities SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform | 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform are -
Learning at scale
– Online learning technologies has now opened space for Sap Banking 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sap Banking 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 Sap Banking to hire the very best people irrespective of their geographical location.
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. Sap Banking 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. Sap Banking 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.
Building a culture of innovation
– managers at Sap Banking 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.
Manufacturing automation
– Sap Banking 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.
Better consumer reach
– The expansion of the 5G network will help Sap Banking to increase its market reach. Sap Banking 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.
Creating value in data economy
– The success of analytics program of Sap Banking has opened avenues for new revenue streams for the organization in the industry. This can help Sap Banking to build a more holistic ecosystem as suggested in the SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform case study. Sap Banking can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Sap Banking can use these opportunities to build new business models that can help the communities that Sap Banking operates in. Secondly it can use opportunities from government spending in Global Business sector.
Buying journey improvements
– Sap Banking can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sap Banking is facing challenges because of the dominance of functional experts in the organization. SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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.
Leveraging digital technologies
– Sap Banking 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.
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. Sap Banking can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sap Banking can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform are -
Environmental challenges
– Sap Banking 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. Sap Banking can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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.
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 Sap Banking.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sap Banking with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sap Banking 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.
Shortening product life cycle
– it is one of the major threat that Sap Banking is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Sap Banking in the Global Business sector and impact the bottomline of the organization.
Increasing wage structure of Sap Banking
– 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 Sap Banking.
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. Sap Banking 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Sap Banking needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Sap Banking has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Sap Banking 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.
Consumer confidence and its impact on Sap Banking 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.
Weighted SWOT Analysis of SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 SAP Banking in 2006: Fostering Innovation in Banking Through the Business Process Platform 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 Sap Banking needs to make to build a sustainable competitive advantage.
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