Banco Ciudad (A): Who is the Owner SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Banco Ciudad (A): Who is the Owner
To maximize their effectiveness, color cases should be printed in color.The state-run Banco de la Ciudad de Buenos Aires (Banco Ciudad) was losing money in 2007. Early in 2008, Federico Sturzenegger, a renowned academic in Argentina, was appointed executive chairman by the city government and charged with turning the bank around. But just four months later, Sturzenegger was already facing the 45th day of a labor conflict sparked by union representatives on account of having fired six employees. The showdown raised several questions. First and foremost: Who owned Banco Ciudad? The city government? The citizens? Its employees? How could this bank use its strengths and overcome its weaknesses to best serve its constituents and the public? This case follows Sturzenegger's eventful first few years in office to examine how a state-owned enterprise maneuvered in a challenging environment to hit its targets of greater efficiency and profitability.
Authors :: Aldo Musacchio, Gustavo A. Herrero, Cintra Scott
Swot Analysis of "Banco Ciudad (A): Who is the Owner" written by Aldo Musacchio, Gustavo A. Herrero, Cintra Scott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ciudad Banco facing as an external strategic factors. Some of the topics covered in Banco Ciudad (A): Who is the Owner case study are - Strategic Management Strategies, Government and Global Business.
Some of the macro environment factors that can be used to understand the Banco Ciudad (A): Who is the Owner casestudy better are - – increasing energy prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Banco Ciudad (A): Who is the Owner
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Banco Ciudad (A): Who is the Owner case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ciudad Banco, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ciudad Banco 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 Banco Ciudad (A): Who is the Owner can be done for the following purposes –
1. Strategic planning using facts provided in Banco Ciudad (A): Who is the Owner case study
2. Improving business portfolio management of Ciudad Banco
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 Ciudad Banco
Strengths Banco Ciudad (A): Who is the Owner | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ciudad Banco in Banco Ciudad (A): Who is the Owner Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Ciudad Banco 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.
Low bargaining power of suppliers
– Suppliers of Ciudad Banco in the sector have low bargaining power. Banco Ciudad (A): Who is the Owner has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ciudad Banco to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Ciudad Banco is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Ciudad Banco 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 Banco Ciudad (A): Who is the Owner - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Ciudad Banco has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ciudad Banco to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Ciudad Banco 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 Banco Ciudad (A): Who is the Owner HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Ciudad Banco 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 Aldo Musacchio, Gustavo A. Herrero, Cintra Scott 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.
High switching costs
– The high switching costs that Ciudad Banco 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.
Sustainable margins compare to other players in Global Business industry
– Banco Ciudad (A): Who is the Owner firm has clearly differentiated products in the market place. This has enabled Ciudad Banco to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ciudad Banco to invest into research and development (R&D) and innovation.
Training and development
– Ciudad Banco has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Banco Ciudad (A): Who is the Owner 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.
Innovation driven organization
– Ciudad Banco is one of the most innovative firm in sector. Manager in Banco Ciudad (A): Who is the Owner Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Banco Ciudad (A): Who is the Owner 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.
Weaknesses Banco Ciudad (A): Who is the Owner | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Banco Ciudad (A): Who is the Owner are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Banco Ciudad (A): Who is the Owner, is just above the industry average. Ciudad Banco 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.
Products dominated business model
– Even though Ciudad Banco 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 - Banco Ciudad (A): Who is the Owner should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Banco Ciudad (A): Who is the Owner 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 Banco Ciudad (A): Who is the Owner can leverage the sales team experience to cultivate customer relationships as Ciudad Banco is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Ciudad Banco 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. Ciudad Banco 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Banco Ciudad (A): Who is the Owner, in the dynamic environment Ciudad Banco has struggled to respond to the nimble upstart competition. Ciudad Banco 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, Aldo Musacchio, Gustavo A. Herrero, Cintra Scott suggests that, Ciudad Banco 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.
Skills based hiring
– The stress on hiring functional specialists at Ciudad Banco 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.
Need for greater diversity
– Ciudad Banco 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 strategic competitive environment developments
– As Banco Ciudad (A): Who is the Owner HBR case study mentions - Ciudad Banco 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 operating costs
– Compare to the competitors, firm in the HBR case study Banco Ciudad (A): Who is the Owner has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ciudad Banco 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Banco Ciudad (A): Who is the Owner, 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 Banco Ciudad (A): Who is the Owner | 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 Banco Ciudad (A): Who is the Owner are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ciudad Banco 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.
Building a culture of innovation
– managers at Ciudad Banco 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.
Better consumer reach
– The expansion of the 5G network will help Ciudad Banco to increase its market reach. Ciudad Banco 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ciudad Banco can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Ciudad Banco 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 Banco Ciudad (A): Who is the Owner - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ciudad Banco to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ciudad Banco can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Ciudad Banco 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ciudad Banco 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 Ciudad Banco to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ciudad Banco is facing challenges because of the dominance of functional experts in the organization. Banco Ciudad (A): Who is the Owner 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.
Learning at scale
– Online learning technologies has now opened space for Ciudad Banco 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ciudad Banco 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.
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 Ciudad Banco in the consumer business. Now Ciudad Banco can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ciudad Banco can use these opportunities to build new business models that can help the communities that Ciudad Banco operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Banco Ciudad (A): Who is the Owner External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Banco Ciudad (A): Who is the Owner are -
Increasing wage structure of Ciudad Banco
– 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 Ciudad Banco.
Environmental challenges
– Ciudad Banco 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. Ciudad Banco 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 Ciudad Banco is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ciudad Banco 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Banco Ciudad (A): Who is the Owner, Ciudad Banco 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 .
Consumer confidence and its impact on Ciudad Banco 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.
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.
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. Ciudad Banco needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Ciudad Banco in the Global Business sector and impact the bottomline of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ciudad Banco 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.
Technology acceleration in Forth Industrial Revolution
– Ciudad Banco has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ciudad Banco 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.
High dependence on third party suppliers
– Ciudad Banco 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.
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 Ciudad Banco.
Weighted SWOT Analysis of Banco Ciudad (A): Who is the Owner 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 Banco Ciudad (A): Who is the Owner 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 Banco Ciudad (A): Who is the Owner 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 Banco Ciudad (A): Who is the Owner 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 Banco Ciudad (A): Who is the Owner 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 Ciudad Banco needs to make to build a sustainable competitive advantage.