Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia
While northeastern Asian economies have grown at a stellar rate over the past 4 decades, during the same period, bank officials and financial market participants have been charged with corruption, nepotism, and government meddling and have incurred high levels of non-performing loans. The close relationships between financiers and their clients, a part of Chinese society known as guanxi, has often been criticized as a key source of corruption in Northeast Asia finance. However, the complex nature of relationships in guanxi networks brings a good side to Asian finance in that reputational risk disciplines financiers, clients, and government officials. I delve into the personal side of Asian finance using the theoretical poles of transactional and relationship banking. Transactional banking is a top-down, hard-data impersonal form of financial contracting, while relationship banking is a bottom-up interpersonal form of banking that relies on softer data. I argue that relationship banking, which naturally fits into an Asian context, could engender a shift from bad behavior to good behavior to protect wealth, reputation, and friends. Contrary to conventional wisdom, guanxi may lead to better governance in banking and other areas of Asian finance as more information becomes available through numerous media outlets and as groups outside the banking sector (e.g., insurance companies, the press, auditors, and citizens) discipline bankers and their clients through 'private monitoring.'
Swot Analysis of "Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia" written by Travis W. Selmier II includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banking Guanxi facing as an external strategic factors. Some of the topics covered in Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia case study are - Strategic Management Strategies, Economics, Ethics and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banking Guanxi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banking Guanxi 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia can be done for the following purposes –
1. Strategic planning using facts provided in Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia case study
2. Improving business portfolio management of Banking Guanxi
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 Banking Guanxi
Strengths Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banking Guanxi in Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Banking Guanxi 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.
Ability to recruit top talent
– Banking Guanxi is one of the leading recruiters in the industry. Managers in the Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Banking Guanxi 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 Travis W. Selmier II 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
– Banking Guanxi 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Banking Guanxi 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.
Effective Research and Development (R&D)
– Banking Guanxi 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Banking Guanxi in the sector have low bargaining power. Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Banking Guanxi to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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.
Learning organization
- Banking Guanxi 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 Banking Guanxi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Banking Guanxi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Banking Guanxi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Banking Guanxi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Banking Guanxi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Banking Guanxi is present in almost all the verticals within the industry. This has provided firm in Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia are -
High bargaining power of channel partners
– Because of the regulatory requirements, Travis W. Selmier II suggests that, Banking Guanxi is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia, in the dynamic environment Banking Guanxi has struggled to respond to the nimble upstart competition. Banking Guanxi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Banking Guanxi is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Banking Guanxi, firm in the HBR case study Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Banking Guanxi supply chain. Even after few cautionary changes mentioned in the HBR case study - Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Banking Guanxi vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Banking Guanxi 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Banking Guanxi 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia, is just above the industry average. Banking Guanxi 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 Banking Guanxi products
– To increase the profitability and margins on the products, Banking Guanxi needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Banking Guanxi 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.
Skills based hiring
– The stress on hiring functional specialists at Banking Guanxi 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.
Opportunities Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia | 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Banking Guanxi 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 Banking Guanxi to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Banking Guanxi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Banking Guanxi can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Banking Guanxi 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.
Manufacturing automation
– Banking Guanxi 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Banking Guanxi 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Banking Guanxi can use these opportunities to build new business models that can help the communities that Banking Guanxi operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Banking Guanxi in the consumer business. Now Banking Guanxi can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Banking Guanxi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Banking Guanxi 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.
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. Banking Guanxi 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. Banking Guanxi 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.
Using analytics as competitive advantage
– Banking Guanxi 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Banking Guanxi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Banking Guanxi is facing challenges because of the dominance of functional experts in the organization. Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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.
Threats Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia are -
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. Banking Guanxi needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Banking Guanxi.
Shortening product life cycle
– it is one of the major threat that Banking Guanxi is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Banking Guanxi business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Banking Guanxi 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. Banking Guanxi can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
High dependence on third party suppliers
– Banking Guanxi 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.
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.
Stagnating economy with rate increase
– Banking Guanxi 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.
Technology acceleration in Forth Industrial Revolution
– Banking Guanxi has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Banking Guanxi 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.
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 Banking Guanxi in the Finance & Accounting sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia, Banking Guanxi 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 .
Consumer confidence and its impact on Banking Guanxi 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.
Increasing wage structure of Banking Guanxi
– 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 Banking Guanxi.
Weighted SWOT Analysis of Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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 Stand By Me: Friends, Relationship Banking, and Financial Governance in Asia 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 Banking Guanxi needs to make to build a sustainable competitive advantage.
