Le Taux ModA¨le: ING Direct, A Growing Success Story SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Le Taux ModA¨le: ING Direct, A Growing Success Story
The case discusses the financial strategy of ING Direct, a telephone/internet retail bank that has been growing rapidly in eight countries. It presents both the deposit pricing strategy, and the asset allocation of the bank.
Swot Analysis of "Le Taux ModA¨le: ING Direct, A Growing Success Story" written by Jean Dermine includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Le Ing facing as an external strategic factors. Some of the topics covered in Le Taux ModA¨le: ING Direct, A Growing Success Story case study are - Strategic Management Strategies, Budgeting, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Le Taux ModA¨le: ING Direct, A Growing Success Story casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
supply chains are disrupted by pandemic , increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Le Taux ModA¨le: ING Direct, A Growing Success Story
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Le Taux ModA¨le: ING Direct, A Growing Success Story case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Le Ing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Le Ing 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 Le Taux ModA¨le: ING Direct, A Growing Success Story can be done for the following purposes –
1. Strategic planning using facts provided in Le Taux ModA¨le: ING Direct, A Growing Success Story case study
2. Improving business portfolio management of Le Ing
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 Le Ing
Strengths Le Taux ModA¨le: ING Direct, A Growing Success Story | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Le Ing in Le Taux ModA¨le: ING Direct, A Growing Success Story Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Le Ing in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Le Ing has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Le Taux ModA¨le: ING Direct, A Growing Success Story 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.
Successful track record of launching new products
– Le Ing has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Le Ing 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Le Ing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Le Ing 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Le Taux ModA¨le: ING Direct, A Growing Success Story firm has clearly differentiated products in the market place. This has enabled Le Ing to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Le Ing to invest into research and development (R&D) and innovation.
Innovation driven organization
– Le Ing is one of the most innovative firm in sector. Manager in Le Taux ModA¨le: ING Direct, A Growing Success Story Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Le Ing
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Le Ing does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Le Ing 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 Jean Dermine 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.
Operational resilience
– The operational resilience strategy in the Le Taux ModA¨le: ING Direct, A Growing Success Story 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.
High switching costs
– The high switching costs that Le Ing 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.
Highly skilled collaborators
– Le Ing 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 Le Taux ModA¨le: ING Direct, A Growing Success Story HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Le Ing is present in almost all the verticals within the industry. This has provided firm in Le Taux ModA¨le: ING Direct, A Growing Success Story 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.
Weaknesses Le Taux ModA¨le: ING Direct, A Growing Success Story | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Le Taux ModA¨le: ING Direct, A Growing Success Story are -
Low market penetration in new markets
– Outside its home market of Le Ing, firm in the HBR case study Le Taux ModA¨le: ING Direct, A Growing Success Story needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Le Ing 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 to strategic competitive environment developments
– As Le Taux ModA¨le: ING Direct, A Growing Success Story HBR case study mentions - Le Ing 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 Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Ing 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Le Taux ModA¨le: ING Direct, A Growing Success Story, it seems that the employees of Le Ing 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.
Slow decision making process
– As mentioned earlier in the report, Le Ing 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. Le Ing 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 Le Taux ModA¨le: ING Direct, A Growing Success Story, in the dynamic environment Le Ing has struggled to respond to the nimble upstart competition. Le Ing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Le Ing 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.
Need for greater diversity
– Le Ing has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Ing has relatively successful track record of launching new products.
Products dominated business model
– Even though Le Ing 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 - Le Taux ModA¨le: ING Direct, A Growing Success Story should strive to include more intangible value offerings along with its core products and services.
Opportunities Le Taux ModA¨le: ING Direct, A Growing Success Story | 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 Le Taux ModA¨le: ING Direct, A Growing Success Story are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Le Ing can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Le Ing 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Le Ing 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. Le Ing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Le Ing is facing challenges because of the dominance of functional experts in the organization. Le Taux ModA¨le: ING Direct, A Growing Success Story 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.
Leveraging digital technologies
– Le Ing 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.
Buying journey improvements
– Le Ing can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Le Taux ModA¨le: ING Direct, A Growing Success Story 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Le Ing 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 Le Ing to hire the very best people irrespective of their geographical location.
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. Le Ing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Le Ing 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.
Using analytics as competitive advantage
– Le Ing 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 Le Taux ModA¨le: ING Direct, A Growing Success Story - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Le Ing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Le Ing 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, Le Taux ModA¨le: ING Direct, A Growing Success Story, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Le Ing in the consumer business. Now Le Ing can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Le Ing to increase its market reach. Le Ing 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.
Threats Le Taux ModA¨le: ING Direct, A Growing Success Story External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Le Taux ModA¨le: ING Direct, A Growing Success Story are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Le Ing 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.
Technology acceleration in Forth Industrial Revolution
– Le Ing has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Le Ing 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.
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.
Stagnating economy with rate increase
– Le Ing 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.
Shortening product life cycle
– it is one of the major threat that Le Ing is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Le Ing 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. Le Ing can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– Le Ing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Le Ing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Le Ing 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.
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. Le Ing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Le Taux ModA¨le: ING Direct, A Growing Success Story, Le Ing 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Le Ing 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 Le Taux ModA¨le: ING Direct, A Growing Success Story .
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 Le Ing in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Ing needs to make to build a sustainable competitive advantage.