Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors
In the fall of 2015, Beneficial State Bank was set to mark its third successive year of normalized profitability while continuing to fulfill its mission to promote social justice and environmental sustainability. At the same time, husband and wife creators of the bank, Tom Steyer (MBA '83) and Kat Taylor (JD/MBA '86), found themselves at a crossroads. As the sole providers of capital to the bank during formation and, as a result of the bank's unique organizational structure, the couple remained the only investors in the bank almost a decade since its founding. With assets of $420 million, the team envisioned scaling the business for both economic viability and impact to over ten times the current size in the coming years. In order to achieve this goal, however, the founders would have to consider the introduction of additional investors. This case describes the motivating factors for changing the bank's existing capital structure, and potential investment options to fulfill these goals. It includes a discussion of prospective investors, existing capitalization and growth prospects, and the role of mergers and acquisitions.
Authors :: Charles Ewald, Heidi Krauel Patel, Jaclyn C. Foroughi
Swot Analysis of "Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors" written by Charles Ewald, Heidi Krauel Patel, Jaclyn C. Foroughi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bank Investors facing as an external strategic factors. Some of the topics covered in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors casestudy better are - – supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, technology disruption,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank Investors, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors can be done for the following purposes –
1. Strategic planning using facts provided in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors case study
2. Improving business portfolio management of Bank Investors
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 Bank Investors
Strengths Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bank Investors in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors Harvard Business Review case study are -
High switching costs
– The high switching costs that Bank Investors 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.
Superior customer experience
– The customer experience strategy of Bank Investors in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Bank Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Bank Investors is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Bank Investors has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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.
Cross disciplinary teams
– Horizontal connected teams at the Bank Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Bank Investors digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bank Investors 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.
Innovation driven organization
– Bank Investors is one of the most innovative firm in sector. Manager in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Bank Investors 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 Bank Investors is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Bank Investors is one of the leading recruiters in the industry. Managers in the Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Bank Investors has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bank Investors 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.
Weaknesses Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Bank Investors supply chain. Even after few cautionary changes mentioned in the HBR case study - Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bank Investors vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Bank Investors 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.
Skills based hiring
– The stress on hiring functional specialists at Bank Investors 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 star products
– The top 2 products and services of the firm as mentioned in the Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Bank Investors has relatively successful track record of launching new products.
High cash cycle compare to competitors
Bank Investors 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.
Slow to strategic competitive environment developments
– As Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors HBR case study mentions - Bank Investors 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.
Increasing silos among functional specialists
– The organizational structure of Bank Investors is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Bank Investors needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bank Investors to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Bank Investors products
– To increase the profitability and margins on the products, Bank Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors can leverage the sales team experience to cultivate customer relationships as Bank Investors is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors, in the dynamic environment Bank Investors has struggled to respond to the nimble upstart competition. Bank Investors has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors | 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors are -
Creating value in data economy
– The success of analytics program of Bank Investors has opened avenues for new revenue streams for the organization in the industry. This can help Bank Investors to build a more holistic ecosystem as suggested in the Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors case study. Bank Investors can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Bank Investors can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Bank Investors 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.
Better consumer reach
– The expansion of the 5G network will help Bank Investors to increase its market reach. Bank Investors 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.
Manufacturing automation
– Bank Investors can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bank Investors is facing challenges because of the dominance of functional experts in the organization. Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bank Investors can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Bank Investors 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. Bank Investors 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bank Investors can use these opportunities to build new business models that can help the communities that Bank Investors operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Loyalty marketing
– Bank Investors 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bank Investors 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, Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bank Investors in the consumer business. Now Bank Investors can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Bank Investors 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.
Threats Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors are -
Technology acceleration in Forth Industrial Revolution
– Bank Investors has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Bank Investors needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Bank Investors.
Increasing wage structure of Bank Investors
– 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 Bank Investors.
Environmental challenges
– Bank Investors 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. Bank Investors can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Consumer confidence and its impact on Bank Investors 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.
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 Bank Investors business can come under increasing regulations regarding data privacy, data security, etc.
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 Bank Investors in the Leadership & Managing People sector and impact the bottomline of the organization.
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
– Bank Investors high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bank Investors 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
– Bank Investors 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. Bank Investors needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Bank Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Beneficial State Bank (B): Evaluating Financial and Social Returns for Investors 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 Bank Investors needs to make to build a sustainable competitive advantage.