In the summer of 1931, Germany was struggling with a deepening economic crisis. Production had fallen, unemployment was high, and bank deposits and gold were being withdrawn from the country at a rapid pace, threatening the value of the German mark. The country's third largest bank, the Danatbank, was especially hard hit by the flagging economy and the flight of capital. By July, the Danatbank was on the verge of collapse, and the bank's charismatic and controversial senior partner, Jakob Goldschmidt, appealed personally to the government, the central bank, and his private banking rivals for a lifeline.
Authors :: David A. Moss, Cole Bolton, Andrew Novo
Swot Analysis of "Danatbank" written by David A. Moss, Cole Bolton, Andrew Novo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Danatbank Goldschmidt facing as an external strategic factors. Some of the topics covered in Danatbank case study are - Strategic Management Strategies, Recession, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the Danatbank casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Danatbank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Danatbank Goldschmidt, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Danatbank Goldschmidt 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 Danatbank can be done for the following purposes –
1. Strategic planning using facts provided in Danatbank case study
2. Improving business portfolio management of Danatbank Goldschmidt
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 Danatbank Goldschmidt
Strengths Danatbank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Danatbank Goldschmidt in Danatbank Harvard Business Review case study are -
High brand equity
– Danatbank Goldschmidt has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Danatbank Goldschmidt to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Danatbank Goldschmidt is one of the leading recruiters in the industry. Managers in the Danatbank are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Danatbank Goldschmidt 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.
Effective Research and Development (R&D)
– Danatbank Goldschmidt 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 Danatbank - 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
– Danatbank firm has clearly differentiated products in the market place. This has enabled Danatbank Goldschmidt to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Danatbank Goldschmidt to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Danatbank 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.
Highly skilled collaborators
– Danatbank Goldschmidt 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 Danatbank HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Danatbank Goldschmidt has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Danatbank Goldschmidt 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.
High switching costs
– The high switching costs that Danatbank Goldschmidt 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.
Organizational Resilience of Danatbank Goldschmidt
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Danatbank Goldschmidt does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Danatbank Goldschmidt is one of the most innovative firm in sector. Manager in Danatbank 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 Danatbank Goldschmidt in the sector have low bargaining power. Danatbank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Danatbank Goldschmidt to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Danatbank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Danatbank are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Danatbank, in the dynamic environment Danatbank Goldschmidt has struggled to respond to the nimble upstart competition. Danatbank Goldschmidt has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, David A. Moss, Cole Bolton, Andrew Novo suggests that, Danatbank Goldschmidt 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.
Need for greater diversity
– Danatbank Goldschmidt 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Danatbank Goldschmidt is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Danatbank 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, Danatbank Goldschmidt 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 to strategic competitive environment developments
– As Danatbank HBR case study mentions - Danatbank Goldschmidt 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Danatbank 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 Danatbank Goldschmidt has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Danatbank Goldschmidt 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.
Low market penetration in new markets
– Outside its home market of Danatbank Goldschmidt, firm in the HBR case study Danatbank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Danatbank, it seems that the employees of Danatbank Goldschmidt 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.
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 Danatbank Goldschmidt supply chain. Even after few cautionary changes mentioned in the HBR case study - Danatbank, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Danatbank Goldschmidt vulnerable to further global disruptions in South East Asia.
Opportunities Danatbank | 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 Danatbank are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Danatbank Goldschmidt 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Danatbank Goldschmidt can use these opportunities to build new business models that can help the communities that Danatbank Goldschmidt operates in. Secondly it can use opportunities from government spending in Global Business sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Danatbank Goldschmidt can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Danatbank Goldschmidt 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Danatbank Goldschmidt 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, Danatbank, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Danatbank Goldschmidt is facing challenges because of the dominance of functional experts in the organization. Danatbank 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.
Developing new processes and practices
– Danatbank Goldschmidt can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Buying journey improvements
– Danatbank Goldschmidt can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Danatbank 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.
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 Danatbank Goldschmidt in the consumer business. Now Danatbank Goldschmidt can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Danatbank Goldschmidt has opened avenues for new revenue streams for the organization in the industry. This can help Danatbank Goldschmidt to build a more holistic ecosystem as suggested in the Danatbank case study. Danatbank Goldschmidt can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Danatbank Goldschmidt to increase its market reach. Danatbank Goldschmidt 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.
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. Danatbank Goldschmidt 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. Danatbank Goldschmidt 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.
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. Danatbank Goldschmidt can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Danatbank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Danatbank are -
High dependence on third party suppliers
– Danatbank Goldschmidt 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 wage structure of Danatbank Goldschmidt
– 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 Danatbank Goldschmidt.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Danatbank Goldschmidt can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Danatbank Goldschmidt.
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. Danatbank Goldschmidt 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.
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 Danatbank Goldschmidt business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Danatbank Goldschmidt has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Danatbank Goldschmidt 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Danatbank Goldschmidt with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Danatbank, Danatbank Goldschmidt 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 .
Regulatory challenges
– Danatbank Goldschmidt 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.
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. Danatbank Goldschmidt needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Danatbank Goldschmidt 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 Danatbank .
Weighted SWOT Analysis of Danatbank 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 Danatbank 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 Danatbank 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 Danatbank 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 Danatbank 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 Danatbank Goldschmidt needs to make to build a sustainable competitive advantage.