Bankinter: Deploying the Mortgage Simulator to the Branches SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bankinter: Deploying the Mortgage Simulator to the Branches
Describes how Bankinter, a mid-sized Spanish bank, altered the information set available to its customer-facing employees. In the spring of 2003, Bankinter introduced an Excel-based program called the mortgage simulator that helped branch managers calculate the price of a mortgage and estimate the customer lifetime value (CLV). Facilitates a discussion of the impact of such a change in the information set for employees when the incentives and decision rights remain unchanged. Also examines the tradeoffs front-line employees face as they divide their efforts between reaching new customers and increasing the amount of cross-selling to existing customers.
Authors :: F. Asis Martinez-Jerez, Katherine Miller
Swot Analysis of "Bankinter: Deploying the Mortgage Simulator to the Branches" written by F. Asis Martinez-Jerez, Katherine Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bankinter Simulator facing as an external strategic factors. Some of the topics covered in Bankinter: Deploying the Mortgage Simulator to the Branches case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Bankinter: Deploying the Mortgage Simulator to the Branches casestudy better are - – digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Bankinter: Deploying the Mortgage Simulator to the Branches
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bankinter: Deploying the Mortgage Simulator to the Branches case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bankinter Simulator, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bankinter Simulator 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 Bankinter: Deploying the Mortgage Simulator to the Branches can be done for the following purposes –
1. Strategic planning using facts provided in Bankinter: Deploying the Mortgage Simulator to the Branches case study
2. Improving business portfolio management of Bankinter Simulator
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bankinter Simulator
Strengths Bankinter: Deploying the Mortgage Simulator to the Branches | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bankinter Simulator in Bankinter: Deploying the Mortgage Simulator to the Branches Harvard Business Review case study are -
Learning organization
- Bankinter Simulator 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 Bankinter Simulator is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bankinter: Deploying the Mortgage Simulator to the Branches Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Bankinter Simulator is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Bankinter Simulator has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bankinter Simulator 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.
Diverse revenue streams
– Bankinter Simulator is present in almost all the verticals within the industry. This has provided firm in Bankinter: Deploying the Mortgage Simulator to the Branches 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.
Operational resilience
– The operational resilience strategy in the Bankinter: Deploying the Mortgage Simulator to the Branches 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.
Cross disciplinary teams
– Horizontal connected teams at the Bankinter Simulator 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 Bankinter Simulator in the sector have low bargaining power. Bankinter: Deploying the Mortgage Simulator to the Branches has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bankinter Simulator to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Bankinter Simulator digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bankinter Simulator 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.
Training and development
– Bankinter Simulator has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bankinter: Deploying the Mortgage Simulator to the Branches 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.
High switching costs
– The high switching costs that Bankinter Simulator 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.
Analytics focus
– Bankinter Simulator 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 F. Asis Martinez-Jerez, Katherine Miller 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 brand equity
– Bankinter Simulator has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bankinter Simulator to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Bankinter: Deploying the Mortgage Simulator to the Branches | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bankinter: Deploying the Mortgage Simulator to the Branches are -
Slow decision making process
– As mentioned earlier in the report, Bankinter Simulator 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. Bankinter Simulator 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.
Slow to strategic competitive environment developments
– As Bankinter: Deploying the Mortgage Simulator to the Branches HBR case study mentions - Bankinter Simulator 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.
Aligning sales with marketing
– It come across in the case study Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter: Deploying the Mortgage Simulator to the Branches can leverage the sales team experience to cultivate customer relationships as Bankinter Simulator is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Bankinter Simulator has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Bankinter Simulator is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Bankinter Simulator needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bankinter Simulator to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Bankinter Simulator products
– To increase the profitability and margins on the products, Bankinter Simulator needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Bankinter Simulator 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bankinter: Deploying the Mortgage Simulator to the Branches, it seems that the employees of Bankinter Simulator 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 star products
– The top 2 products and services of the firm as mentioned in the Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter Simulator 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 Bankinter: Deploying the Mortgage Simulator to the Branches, in the dynamic environment Bankinter Simulator has struggled to respond to the nimble upstart competition. Bankinter Simulator has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Bankinter Simulator supply chain. Even after few cautionary changes mentioned in the HBR case study - Bankinter: Deploying the Mortgage Simulator to the Branches, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bankinter Simulator vulnerable to further global disruptions in South East Asia.
Opportunities Bankinter: Deploying the Mortgage Simulator to the Branches | 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 Bankinter: Deploying the Mortgage Simulator to the Branches are -
Developing new processes and practices
– Bankinter Simulator can develop new processes and procedures in Finance & Accounting 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bankinter Simulator 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, Bankinter: Deploying the Mortgage Simulator to the Branches, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bankinter Simulator 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 Bankinter Simulator to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Bankinter Simulator can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Buying journey improvements
– Bankinter Simulator can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bankinter: Deploying the Mortgage Simulator to the Branches 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bankinter Simulator in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Loyalty marketing
– Bankinter Simulator 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Bankinter Simulator to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Bankinter Simulator 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.
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 Bankinter Simulator in the consumer business. Now Bankinter Simulator 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, Bankinter Simulator can use these opportunities to build new business models that can help the communities that Bankinter Simulator operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Bankinter Simulator 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 Finance & Accounting segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bankinter Simulator can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Bankinter: Deploying the Mortgage Simulator to the Branches External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bankinter: Deploying the Mortgage Simulator to the Branches are -
High dependence on third party suppliers
– Bankinter Simulator 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.
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. Bankinter Simulator needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Bankinter Simulator 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.
Stagnating economy with rate increase
– Bankinter Simulator 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bankinter Simulator 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 Bankinter: Deploying the Mortgage Simulator to the Branches, Bankinter Simulator may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bankinter Simulator can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Bankinter Simulator 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 Finance & Accounting industry regulations.
Technology acceleration in Forth Industrial Revolution
– Bankinter Simulator has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Bankinter Simulator needs to keep up with the evolution of technology in the Finance & Accounting 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bankinter Simulator in the Finance & Accounting industry. The Finance & Accounting 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.
Increasing wage structure of Bankinter Simulator
– 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 Bankinter Simulator.
Environmental challenges
– Bankinter Simulator 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. Bankinter Simulator can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Bankinter Simulator 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.
Weighted SWOT Analysis of Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter: Deploying the Mortgage Simulator to the Branches 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 Bankinter Simulator needs to make to build a sustainable competitive advantage.
