ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK
The Ecobank case is a pan African strategy/business development case with strong elements of Human Resources and talent management issues as well as governance and organizational design. The case is an inspirational story about a group of visionary people from 14 West African countries who in 1984 - with limited resources - decide to create a pan African bank to further the development of Africa. Today, Ecobank has 8.3 million customers, 18,000 employees and a footprint that covers 32 African countries - more than any other bank. In July 2012 Ecobank was named "Best Bank in Africa" by Euromoney for the second year in a row. The case covers the three expansion stages of the bank, and the strategy it has employed in managing rapid growth both organically and through cross border acquisitions. It has a unique approach of "acting locally, while being one bank" which is strongly reflected in its governance systems and organizational design. And it has above all been phenomenally successful in attracting and developing local talent - perhaps the most scare resource of all in Africa. Learning objectives: This is an inspirational story that should be "told" rather than "read." Because of this, the written case is intentionally very short, but supported by video interviews with senior Ecobank executives. A total of 86 minutes of video (of which 28 minutes is designed to be watched by students before the session) structured in 12 "modules" gives the instructor great flexibility in how to use the case in class. The case and video modules can be used to demonstrate: strategy and business development in an African context. How to manage organic growth and growth through acquisitions across borders. Human Resources - how to attract, retain and motivate talent in an emerging market. Organizational design as an organization grows. Governance issues in emerging markets.
Swot Analysis of "ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK" written by Leif Sjoblom, Hischam El-Agamy includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ecobank African facing as an external strategic factors. Some of the topics covered in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK case study are - Strategic Management Strategies, Growth strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ecobank African, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK can be done for the following purposes –
1. Strategic planning using facts provided in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK case study
2. Improving business portfolio management of Ecobank African
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ecobank African
Strengths ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ecobank African in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK Harvard Business Review case study are -
Organizational Resilience of Ecobank African
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ecobank African does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Ecobank African 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.
High switching costs
– The high switching costs that Ecobank African 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.
Diverse revenue streams
– Ecobank African is present in almost all the verticals within the industry. This has provided firm in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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.
Ability to lead change in Leadership & Managing People field
– Ecobank African 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 Ecobank African in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Ecobank African 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 Ecobank African is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Ecobank African has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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.
Analytics focus
– Ecobank African 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 Leif Sjoblom, Hischam El-Agamy 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.
Highly skilled collaborators
– Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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.
Strong track record of project management
– Ecobank African 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)
– Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, in the dynamic environment Ecobank African has struggled to respond to the nimble upstart competition. Ecobank African has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK HBR case study mentions - Ecobank African 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.
Interest costs
– Compare to the competition, Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, it seems that the employees of Ecobank African 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.
No frontier risks strategy
– After analyzing the HBR case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 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 Ecobank African supply chain. Even after few cautionary changes mentioned in the HBR case study - ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ecobank African vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Ecobank African has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ecobank African is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Ecobank African is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ecobank African needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ecobank African to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, is just above the industry average. Ecobank African 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.
Aligning sales with marketing
– It come across in the case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK can leverage the sales team experience to cultivate customer relationships as Ecobank African is planning to shift buying processes online.
Opportunities ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK | 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ecobank African can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Ecobank African can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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.
Using analytics as competitive advantage
– Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ecobank African to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Ecobank African to increase its market reach. Ecobank African 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ecobank African 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, ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Ecobank African 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 Leadership & Managing People segment.
Developing new processes and practices
– Ecobank African can develop new processes and procedures in Leadership & Managing People 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.
Creating value in data economy
– The success of analytics program of Ecobank African has opened avenues for new revenue streams for the organization in the industry. This can help Ecobank African to build a more holistic ecosystem as suggested in the ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK case study. Ecobank African can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Ecobank African can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ecobank African in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ecobank African 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. Ecobank African 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.
Learning at scale
– Online learning technologies has now opened space for Ecobank African 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ecobank African can use these opportunities to build new business models that can help the communities that Ecobank African operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Threats ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK are -
Shortening product life cycle
– it is one of the major threat that Ecobank African is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK .
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 Ecobank African.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ecobank African in the Leadership & Managing People industry. The Leadership & Managing People 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ecobank African with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Ecobank African
– 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 Ecobank African.
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.
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 Ecobank African in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Ecobank African business can come under increasing regulations regarding data privacy, data security, etc.
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. Ecobank African needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK, Ecobank African may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Stagnating economy with rate increase
– Ecobank African 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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 ECOBANK: A PASSION TO BUILD A WORLD CLASS PAN AFRICAN BANK 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 Ecobank African needs to make to build a sustainable competitive advantage.