Case Study Description of Bohemian Crowns: Ceskoslovenska Obchodni Banka (A)
Tells the story of the Czech transition from a centrally planned to a free market economy, describing the first economic reforms, the fixed-exchange rate regime, and the voucher privatization. Also explains why, in the middle of the 1990s, the Czech Republic liberalized its capital account and how this affected the Czech banking system, leading to a massive credit boom. Explores why Ceskoslovenska Obchodni Banka (CSOB), the country's fourth largest bank, decided not to participate in the credit boom and how CSOB determined and pursued its expansion strategy. Students assume the position of Pavel Kavanek, CSOB's CEO who, in June 2000, must decide whether CSOB should acquire IPB, another large Czech bank on the brink of bankruptcy.
Authors :: Rawi Abdelal, Vincent Dessain, Monika Stachowiak
Swot Analysis of "Bohemian Crowns: Ceskoslovenska Obchodni Banka (A)" written by Rawi Abdelal, Vincent Dessain, Monika Stachowiak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Csob Czech facing as an external strategic factors. Some of the topics covered in Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) case study are - Strategic Management Strategies, Growth strategy, International business, Mergers & acquisitions, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) casestudy better are - – technology disruption, increasing energy prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , geopolitical disruptions, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Bohemian Crowns: Ceskoslovenska Obchodni Banka (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Csob Czech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Csob Czech 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) can be done for the following purposes –
1. Strategic planning using facts provided in Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) case study
2. Improving business portfolio management of Csob Czech
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 Csob Czech
Strengths Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Csob Czech in Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) Harvard Business Review case study are -
Ability to recruit top talent
– Csob Czech is one of the leading recruiters in the industry. Managers in the Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Csob Czech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Csob Czech 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.
High switching costs
– The high switching costs that Csob Czech 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.
Training and development
– Csob Czech has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Csob Czech
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Csob Czech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Csob Czech 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 Rawi Abdelal, Vincent Dessain, Monika Stachowiak 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.
Effective Research and Development (R&D)
– Csob Czech 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Global Business industry
– Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) firm has clearly differentiated products in the market place. This has enabled Csob Czech to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Csob Czech to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Csob Czech 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.
Successful track record of launching new products
– Csob Czech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Csob Czech 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.
Innovation driven organization
– Csob Czech is one of the most innovative firm in sector. Manager in Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A), is just above the industry average. Csob Czech needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Csob Czech, firm in the HBR case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A), in the dynamic environment Csob Czech has struggled to respond to the nimble upstart competition. Csob Czech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A), 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.
Aligning sales with marketing
– It come across in the case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) can leverage the sales team experience to cultivate customer relationships as Csob Czech is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Csob Czech 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Csob Czech is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Csob Czech 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.
Slow decision making process
– As mentioned earlier in the report, Csob Czech 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. Csob Czech 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.
Need for greater diversity
– Csob Czech 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rawi Abdelal, Vincent Dessain, Monika Stachowiak suggests that, Csob Czech 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.
Opportunities Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) | 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) are -
Creating value in data economy
– The success of analytics program of Csob Czech has opened avenues for new revenue streams for the organization in the industry. This can help Csob Czech to build a more holistic ecosystem as suggested in the Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) case study. Csob Czech can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Csob Czech can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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.
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. Csob Czech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Csob Czech 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Csob Czech 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Csob Czech is facing challenges because of the dominance of functional experts in the organization. Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Csob Czech can use these opportunities to build new business models that can help the communities that Csob Czech operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 Csob Czech in the consumer business. Now Csob Czech can target international markets with far fewer capital restrictions requirements than the existing system.
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. Csob Czech 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. Csob Czech 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.
Manufacturing automation
– Csob Czech 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.
Leveraging digital technologies
– Csob Czech 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. Csob Czech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Csob Czech 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.
Threats Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) are -
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 Csob Czech.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Csob Czech 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 Csob Czech 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.
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 Csob Czech in the Global Business sector and impact the bottomline 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 Csob Czech 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 acceleration in Forth Industrial Revolution
– Csob Czech has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Csob Czech 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.
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.
Environmental challenges
– Csob Czech 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. Csob Czech can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Csob Czech business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Csob Czech 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Csob Czech 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) .
Regulatory challenges
– Csob Czech 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.
Shortening product life cycle
– it is one of the major threat that Csob Czech is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Bohemian Crowns: Ceskoslovenska Obchodni Banka (A) 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 Csob Czech needs to make to build a sustainable competitive advantage.
