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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Learning organization
- Le Ing 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 Le Ing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Le Taux ModA¨le: ING Direct, A Growing Success Story Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Ability to recruit top talent
– Le Ing is one of the leading recruiters in the industry. Managers in the Le Taux ModA¨le: ING Direct, A Growing Success Story are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Finance & Accounting field
– Le Ing is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Le Ing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Le Ing 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.
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.
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.
High brand equity
– Le Ing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Le Ing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Low bargaining power of suppliers
– Suppliers of Le Ing in the sector have low bargaining power. Le Taux ModA¨le: ING Direct, A Growing Success Story has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Le Ing to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Le Ing 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.
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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Le Ing is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Le Taux ModA¨le: ING Direct, A Growing Success Story can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Le Taux ModA¨le: ING Direct, A Growing Success Story, is just above the industry average. Le Ing 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.
Lack of clear differentiation of Le Ing products
– To increase the profitability and margins on the products, Le Ing needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Le Taux ModA¨le: ING Direct, A Growing Success Story 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 Le Taux ModA¨le: ING Direct, A Growing Success Story can leverage the sales team experience to cultivate customer relationships as Le Ing is planning to shift buying processes online.
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.
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 Le Ing supply chain. Even after few cautionary changes mentioned in the HBR case study - Le Taux ModA¨le: ING Direct, A Growing Success Story, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Le Ing vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Le Taux ModA¨le: ING Direct, A Growing Success Story, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
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.
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 -
Manufacturing automation
– Le Ing 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.
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.
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.
Loyalty marketing
– Le Ing 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.
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.
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.
Creating value in data economy
– The success of analytics program of Le Ing has opened avenues for new revenue streams for the organization in the industry. This can help Le Ing to build a more holistic ecosystem as suggested in the Le Taux ModA¨le: ING Direct, A Growing Success Story case study. Le Ing can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Le Ing can use these opportunities to build new business models that can help the communities that Le Ing operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
Building a culture of innovation
– managers at Le Ing 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.
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.
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.
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.
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 -
Consumer confidence and its impact on Le Ing 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.
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.
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.
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. Le Ing needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Le Ing business can come under increasing regulations regarding data privacy, data security, etc.
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 .
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.
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.
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 .
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.
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.
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.
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.
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.