Bank of Baroda: Leadership Challenges SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bank of Baroda: Leadership Challenges
In 2008, the newly appointed chairman and managing director (CMD) of Bank of Baroda, one of India's largest public-sector banks, was exploring ways to implement the vision of making the bank one of the most popular and customer-oriented public-sector banks in the country. Under the tenure of the previous CMD, a strong foundation for growth had been built, and subsequently, the bank had made tremendous progress and had been ranked third among its peers. However, the bank continued to suffer from the typical malaise of large public-sector organizations - although change was taking place, the firm was sluggish, inadequately responsive to customers, and using outdated processes and technology. Consequently, the new CMD was faced with the challenge of managing the legacy of his predecessor. To accomplish his goal, he took on the task of reinventing the bank by dispelling the culture of fear and caution that prevailed. Could he make the firm more agile and customer-savvy, while quadrupling revenue? Asha Bhandarker is affiliated with International Management Institute-New Delhi. Snigdha Rai is affiliated with International Management Institute.
Swot Analysis of "Bank of Baroda: Leadership Challenges" written by Asha Bhandarker, Snigdha Rai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cmd Bank facing as an external strategic factors. Some of the topics covered in Bank of Baroda: Leadership Challenges case study are - Strategic Management Strategies, Leadership, Organizational culture and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Bank of Baroda: Leadership Challenges casestudy better are - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, wage bills are increasing, technology disruption, increasing energy prices, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Bank of Baroda: Leadership Challenges
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bank of Baroda: Leadership Challenges case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cmd Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cmd Bank 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 Bank of Baroda: Leadership Challenges can be done for the following purposes –
1. Strategic planning using facts provided in Bank of Baroda: Leadership Challenges case study
2. Improving business portfolio management of Cmd Bank
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 Cmd Bank
Strengths Bank of Baroda: Leadership Challenges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cmd Bank in Bank of Baroda: Leadership Challenges Harvard Business Review case study are -
Analytics focus
– Cmd Bank 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 Asha Bhandarker, Snigdha Rai can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High switching costs
– The high switching costs that Cmd Bank 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.
Learning organization
- Cmd Bank 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 Cmd Bank is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bank of Baroda: Leadership Challenges Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Leadership & Managing People industry
– Bank of Baroda: Leadership Challenges firm has clearly differentiated products in the market place. This has enabled Cmd Bank to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Cmd Bank to invest into research and development (R&D) and innovation.
Training and development
– Cmd Bank has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bank of Baroda: Leadership Challenges 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
– Cmd Bank has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cmd Bank 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.
Strong track record of project management
– Cmd Bank is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Cmd Bank has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cmd Bank to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Cmd Bank is one of the most innovative firm in sector. Manager in Bank of Baroda: Leadership Challenges Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Cmd Bank is one of the leading recruiters in the industry. Managers in the Bank of Baroda: Leadership Challenges are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Cmd Bank digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cmd Bank 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.
Low bargaining power of suppliers
– Suppliers of Cmd Bank in the sector have low bargaining power. Bank of Baroda: Leadership Challenges has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cmd Bank to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Bank of Baroda: Leadership Challenges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bank of Baroda: Leadership Challenges are -
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 Cmd Bank supply chain. Even after few cautionary changes mentioned in the HBR case study - Bank of Baroda: Leadership Challenges, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cmd Bank vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Cmd Bank has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Cmd Bank 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 - Bank of Baroda: Leadership Challenges should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bank of Baroda: Leadership Challenges, it seems that the employees of Cmd Bank 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.
Lack of clear differentiation of Cmd Bank products
– To increase the profitability and margins on the products, Cmd Bank needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Bank of Baroda: Leadership Challenges 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 Cmd Bank 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Bank of Baroda: Leadership Challenges, is just above the industry average. Cmd Bank 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.
Interest costs
– Compare to the competition, Cmd Bank 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 Cmd Bank 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 bargaining power of channel partners
– Because of the regulatory requirements, Asha Bhandarker, Snigdha Rai suggests that, Cmd Bank 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.
Slow decision making process
– As mentioned earlier in the report, Cmd Bank 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. Cmd Bank 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.
Opportunities Bank of Baroda: Leadership Challenges | 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 Bank of Baroda: Leadership Challenges are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cmd Bank 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cmd Bank 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, Bank of Baroda: Leadership Challenges, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Cmd Bank 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. Cmd Bank 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cmd Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cmd Bank 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.
Buying journey improvements
– Cmd Bank can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Bank of Baroda: Leadership Challenges 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.
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 Cmd Bank 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.
Better consumer reach
– The expansion of the 5G network will help Cmd Bank to increase its market reach. Cmd Bank 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.
Creating value in data economy
– The success of analytics program of Cmd Bank has opened avenues for new revenue streams for the organization in the industry. This can help Cmd Bank to build a more holistic ecosystem as suggested in the Bank of Baroda: Leadership Challenges case study. Cmd Bank can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Cmd Bank 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cmd Bank can use these opportunities to build new business models that can help the communities that Cmd Bank operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Using analytics as competitive advantage
– Cmd Bank 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 Bank of Baroda: Leadership Challenges - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cmd Bank to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Cmd Bank 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.
Threats Bank of Baroda: Leadership Challenges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bank of Baroda: Leadership Challenges are -
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.
High dependence on third party suppliers
– Cmd Bank 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.
Regulatory challenges
– Cmd Bank 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 Leadership & Managing People industry regulations.
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. Cmd Bank needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Cmd Bank
– 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 Cmd Bank.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cmd Bank can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Cmd Bank.
Environmental challenges
– Cmd Bank 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. Cmd Bank can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Cmd Bank in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Cmd Bank 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cmd Bank 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 Bank of Baroda: Leadership Challenges .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cmd Bank 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.
Shortening product life cycle
– it is one of the major threat that Cmd Bank is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Bank of Baroda: Leadership Challenges 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 Bank of Baroda: Leadership Challenges 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 Bank of Baroda: Leadership Challenges 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 Bank of Baroda: Leadership Challenges 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 Bank of Baroda: Leadership Challenges 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 Cmd Bank needs to make to build a sustainable competitive advantage.