Case Study Description of Guaranty Trust Bank PLC Nigeria (A)
Fola Adeola, the CEO of Nigeria's Guaranty Trust Bank and one of its founders in 1991, is considering what should be done to maintain the bank's original vision and vitality in the face of its rapid growth and success in the marketplace. Known for its high ethical standards, the bank is planning to expand inside and outside Nigeria. Among Adeola's concerns is what to do about employees' insistence on underpaying their personal income taxes--a practice he regards as inconsistent with the bank's mission of being a role model for society. A rewritten version of an earlier case.
Swot Analysis of "Guaranty Trust Bank PLC Nigeria (A)" written by Lynn Sharp Paine, Harold F. Hogan Jr. includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Guaranty Nigeria facing as an external strategic factors. Some of the topics covered in Guaranty Trust Bank PLC Nigeria (A) case study are - Strategic Management Strategies, Ethics, Growth strategy, Organizational structure, Regulation, Social responsibility, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Guaranty Trust Bank PLC Nigeria (A) casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, technology disruption,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Guaranty Trust Bank PLC Nigeria (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Guaranty Trust Bank PLC Nigeria (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guaranty Nigeria, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guaranty Nigeria 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 Guaranty Trust Bank PLC Nigeria (A) can be done for the following purposes –
1. Strategic planning using facts provided in Guaranty Trust Bank PLC Nigeria (A) case study
2. Improving business portfolio management of Guaranty Nigeria
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 Guaranty Nigeria
Strengths Guaranty Trust Bank PLC Nigeria (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guaranty Nigeria in Guaranty Trust Bank PLC Nigeria (A) Harvard Business Review case study are -
Learning organization
- Guaranty Nigeria 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 Guaranty Nigeria is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Guaranty Trust Bank PLC Nigeria (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Leadership & Managing People field
– Guaranty Nigeria 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 Guaranty Nigeria in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Guaranty Nigeria 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 Guaranty Trust Bank PLC Nigeria (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Guaranty Nigeria is one of the leading recruiters in the industry. Managers in the Guaranty Trust Bank PLC Nigeria (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Guaranty Nigeria in the sector have low bargaining power. Guaranty Trust Bank PLC Nigeria (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guaranty Nigeria to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Guaranty Nigeria
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Guaranty Nigeria does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Guaranty Nigeria has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Guaranty Nigeria 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.
High brand equity
– Guaranty Nigeria has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guaranty Nigeria to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Guaranty Nigeria in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Guaranty Nigeria 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 Guaranty Trust Bank PLC Nigeria (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Leadership & Managing People industry
– Guaranty Trust Bank PLC Nigeria (A) firm has clearly differentiated products in the market place. This has enabled Guaranty Nigeria to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Guaranty Nigeria to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Guaranty Nigeria is present in almost all the verticals within the industry. This has provided firm in Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Trust Bank PLC Nigeria (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Nigeria supply chain. Even after few cautionary changes mentioned in the HBR case study - Guaranty Trust Bank PLC Nigeria (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guaranty Nigeria vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Guaranty Trust Bank PLC Nigeria (A), it seems that the employees of Guaranty Nigeria don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Guaranty Nigeria is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Nigeria is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Guaranty Nigeria needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guaranty Nigeria to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Guaranty Trust Bank PLC Nigeria (A), 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 star products
– The top 2 products and services of the firm as mentioned in the Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Nigeria has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Guaranty Nigeria 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.
Slow to strategic competitive environment developments
– As Guaranty Trust Bank PLC Nigeria (A) HBR case study mentions - Guaranty Nigeria 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.
Slow decision making process
– As mentioned earlier in the report, Guaranty Nigeria 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. Guaranty Nigeria 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.
Products dominated business model
– Even though Guaranty Nigeria 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 - Guaranty Trust Bank PLC Nigeria (A) should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Guaranty Nigeria 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.
Opportunities Guaranty Trust Bank PLC Nigeria (A) | 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 Guaranty Trust Bank PLC Nigeria (A) are -
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. Guaranty Nigeria can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Guaranty Nigeria 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.
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. Guaranty Nigeria can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Guaranty Nigeria can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Guaranty Nigeria 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Guaranty Nigeria 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.
Building a culture of innovation
– managers at Guaranty Nigeria 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.
Loyalty marketing
– Guaranty Nigeria 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.
Developing new processes and practices
– Guaranty Nigeria 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.
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. Guaranty Nigeria 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. Guaranty Nigeria 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, Guaranty Nigeria can use these opportunities to build new business models that can help the communities that Guaranty Nigeria operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Guaranty Nigeria can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Guaranty Trust Bank PLC Nigeria (A) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guaranty Nigeria 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 Guaranty Nigeria to hire the very best people irrespective of their geographical location.
Threats Guaranty Trust Bank PLC Nigeria (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Guaranty Trust Bank PLC Nigeria (A) are -
Regulatory challenges
– Guaranty Nigeria 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.
Increasing wage structure of Guaranty Nigeria
– 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 Guaranty Nigeria.
Stagnating economy with rate increase
– Guaranty Nigeria 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 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 Guaranty Nigeria in the Leadership & Managing People sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Guaranty Nigeria with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Guaranty Nigeria 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guaranty Nigeria 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 Guaranty Trust Bank PLC Nigeria (A) .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Guaranty Trust Bank PLC Nigeria (A), Guaranty Nigeria 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 .
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 Guaranty Nigeria.
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. Guaranty Nigeria can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guaranty Nigeria 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.
Environmental challenges
– Guaranty Nigeria 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. Guaranty Nigeria can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Weighted SWOT Analysis of Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Trust Bank PLC Nigeria (A) 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 Guaranty Nigeria needs to make to build a sustainable competitive advantage.