Landsbanki Islands, the oldest of Iceland's three major banks, faced a funding crisis in March 2008 as its home country spiraled into a financial crisis. The astonishing growth rate of Landsbanki and Iceland's other top banks during the previous few years begged the question of whether such expansion can occur without strategic missteps. As the crisis worsened, the bank's leaders were under pressure to keep the institution afloat. In this case students examine Landsbanki's history and financial data, the close connections between Iceland's major corporations and banks, and the country's monetary policies to consider the reasons for the collapse and what steps the bank's management should take.
Swot Analysis of "Landsbanki Islands" written by David Beim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Landsbanki Iceland's facing as an external strategic factors. Some of the topics covered in Landsbanki Islands case study are - Strategic Management Strategies, International business, Policy, Recession and Global Business.
Some of the macro environment factors that can be used to understand the Landsbanki Islands casestudy better are - – talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
Introduction to SWOT Analysis of Landsbanki Islands
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Landsbanki Islands case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Landsbanki Iceland's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Landsbanki Iceland's 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 Landsbanki Islands can be done for the following purposes –
1. Strategic planning using facts provided in Landsbanki Islands case study
2. Improving business portfolio management of Landsbanki Iceland's
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 Landsbanki Iceland's
Strengths Landsbanki Islands | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Landsbanki Iceland's in Landsbanki Islands Harvard Business Review case study are -
Innovation driven organization
– Landsbanki Iceland's is one of the most innovative firm in sector. Manager in Landsbanki Islands Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Landsbanki Iceland's in the sector have low bargaining power. Landsbanki Islands has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Landsbanki Iceland's to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Landsbanki Iceland's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Landsbanki Islands 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 Landsbanki Iceland's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Landsbanki Iceland's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Landsbanki Iceland's 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 Landsbanki Iceland's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Landsbanki Islands Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Landsbanki Islands firm has clearly differentiated products in the market place. This has enabled Landsbanki Iceland's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Landsbanki Iceland's to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Landsbanki Iceland's 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.
Analytics focus
– Landsbanki Iceland's 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 David Beim 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.
Superior customer experience
– The customer experience strategy of Landsbanki Iceland's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Landsbanki Iceland's is present in almost all the verticals within the industry. This has provided firm in Landsbanki Islands 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.
Highly skilled collaborators
– Landsbanki Iceland's 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 Landsbanki Islands HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Landsbanki Iceland's 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 Landsbanki Islands - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Landsbanki Islands | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Landsbanki Islands are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Landsbanki Islands 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 Landsbanki Iceland's has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Landsbanki Islands, in the dynamic environment Landsbanki Iceland's has struggled to respond to the nimble upstart competition. Landsbanki Iceland's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Landsbanki Iceland's 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.
Products dominated business model
– Even though Landsbanki Iceland's 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 - Landsbanki Islands should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Landsbanki Iceland's is dominated by functional specialists. It is not different from other players in the Global Business segment. Landsbanki Iceland's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Landsbanki Iceland's to focus more on services rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Landsbanki Iceland's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Landsbanki Iceland's supply chain. Even after few cautionary changes mentioned in the HBR case study - Landsbanki Islands, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Landsbanki Iceland's vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Landsbanki Iceland's 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.
Slow decision making process
– As mentioned earlier in the report, Landsbanki Iceland's 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. Landsbanki Iceland's 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.
No frontier risks strategy
– After analyzing the HBR case study Landsbanki Islands, 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 Landsbanki Islands 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 Landsbanki Islands can leverage the sales team experience to cultivate customer relationships as Landsbanki Iceland's is planning to shift buying processes online.
Opportunities Landsbanki Islands | 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 Landsbanki Islands are -
Creating value in data economy
– The success of analytics program of Landsbanki Iceland's has opened avenues for new revenue streams for the organization in the industry. This can help Landsbanki Iceland's to build a more holistic ecosystem as suggested in the Landsbanki Islands case study. Landsbanki Iceland's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Landsbanki Iceland's 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.
Buying journey improvements
– Landsbanki Iceland's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Landsbanki Islands 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.
Using analytics as competitive advantage
– Landsbanki Iceland's 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 Landsbanki Islands - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Landsbanki Iceland's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Landsbanki Iceland's 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.
Building a culture of innovation
– managers at Landsbanki Iceland's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Landsbanki Iceland's 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.
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. Landsbanki Iceland's 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. Landsbanki Iceland's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Landsbanki Iceland's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Landsbanki Iceland's 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, Landsbanki Islands, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Landsbanki Iceland's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Landsbanki Iceland's 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.
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 Landsbanki Iceland's in the consumer business. Now Landsbanki Iceland's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Landsbanki Islands External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Landsbanki Islands are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Landsbanki Iceland's 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 Landsbanki Islands .
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 Landsbanki Iceland's.
Regulatory challenges
– Landsbanki Iceland's 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.
Environmental challenges
– Landsbanki Iceland's 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. Landsbanki Iceland's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Shortening product life cycle
– it is one of the major threat that Landsbanki Iceland's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Landsbanki Iceland's
– 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 Landsbanki Iceland's.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Landsbanki Iceland's in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Landsbanki Iceland's 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. Landsbanki Iceland's 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
– Landsbanki Iceland's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Landsbanki Iceland's 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.
Stagnating economy with rate increase
– Landsbanki Iceland's 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.
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.
Weighted SWOT Analysis of Landsbanki Islands 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 Landsbanki Islands 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 Landsbanki Islands 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 Landsbanki Islands 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 Landsbanki Islands 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 Landsbanki Iceland's needs to make to build a sustainable competitive advantage.
