Abelli and Saviotti at Banca Commerciale Italiana (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Abelli and Saviotti at Banca Commerciale Italiana (A)
In 1999, a powerful struggle amidst complex corporate and interpersonal networks led to the failed merger between Banca Commerciale Italiana and Unicredito Italiano--two of Italy's largest banking groups. This case analyzes the actions of Abelli and Saviotti, co-CEOs of Banca Commerciale Italiana at that time, as well as those of central players in Banca d'Italia, Mediobanca, and several prominent national and international banking and industrial groups. The events shed light on the management of multilayered resource dependencies and tactics of political influence as a critical precondition for implementing sound business strategy.
Authors :: Tiziana Casciaro, Kathleen L. McGinn, Massimiliano Belingheri
Swot Analysis of "Abelli and Saviotti at Banca Commerciale Italiana (A)" written by Tiziana Casciaro, Kathleen L. McGinn, Massimiliano Belingheri includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Banca Commerciale facing as an external strategic factors. Some of the topics covered in Abelli and Saviotti at Banca Commerciale Italiana (A) case study are - Strategic Management Strategies, Influence, Mergers & acquisitions, Networking and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Abelli and Saviotti at Banca Commerciale Italiana (A) casestudy better are - – increasing transportation and logistics costs, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Abelli and Saviotti at Banca Commerciale Italiana (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Abelli and Saviotti at Banca Commerciale Italiana (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Banca Commerciale, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Banca Commerciale 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 Abelli and Saviotti at Banca Commerciale Italiana (A) can be done for the following purposes –
1. Strategic planning using facts provided in Abelli and Saviotti at Banca Commerciale Italiana (A) case study
2. Improving business portfolio management of Banca Commerciale
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 Banca Commerciale
Strengths Abelli and Saviotti at Banca Commerciale Italiana (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Banca Commerciale in Abelli and Saviotti at Banca Commerciale Italiana (A) Harvard Business Review case study are -
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Banca Commerciale digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Banca Commerciale 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.
Organizational Resilience of Banca Commerciale
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Banca Commerciale does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Banca Commerciale 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.
Strong track record of project management
– Banca Commerciale is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Abelli and Saviotti at Banca Commerciale Italiana (A) 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.
Analytics focus
– Banca Commerciale 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 Tiziana Casciaro, Kathleen L. McGinn, Massimiliano Belingheri 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Abelli and Saviotti at Banca Commerciale Italiana (A) firm has clearly differentiated products in the market place. This has enabled Banca Commerciale to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Banca Commerciale to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Banca Commerciale is one of the leading recruiters in the industry. Managers in the Abelli and Saviotti at Banca Commerciale Italiana (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.
Successful track record of launching new products
– Banca Commerciale has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Banca Commerciale 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.
Learning organization
- Banca Commerciale 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 Banca Commerciale is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Abelli and Saviotti at Banca Commerciale Italiana (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Banca Commerciale is one of the most innovative firm in sector. Manager in Abelli and Saviotti at Banca Commerciale Italiana (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Banca Commerciale 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 Abelli and Saviotti at Banca Commerciale Italiana (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Abelli and Saviotti at Banca Commerciale Italiana (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Abelli and Saviotti at Banca Commerciale Italiana (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Banca Commerciale is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Abelli and Saviotti at Banca Commerciale Italiana (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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Abelli and Saviotti at Banca Commerciale Italiana (A), is just above the industry average. Banca Commerciale 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.
High cash cycle compare to competitors
Banca Commerciale 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Banca Commerciale 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 Banca Commerciale 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Abelli and Saviotti at Banca Commerciale Italiana (A), it seems that the employees of Banca Commerciale 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.
Interest costs
– Compare to the competition, Banca Commerciale 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.
Lack of clear differentiation of Banca Commerciale products
– To increase the profitability and margins on the products, Banca Commerciale needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Abelli and Saviotti at Banca Commerciale Italiana (A), in the dynamic environment Banca Commerciale has struggled to respond to the nimble upstart competition. Banca Commerciale has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Abelli and Saviotti at Banca Commerciale Italiana (A) HBR case study mentions - Banca Commerciale 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.
No frontier risks strategy
– After analyzing the HBR case study Abelli and Saviotti at Banca Commerciale Italiana (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.
Opportunities Abelli and Saviotti at Banca Commerciale Italiana (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 Abelli and Saviotti at Banca Commerciale Italiana (A) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Banca Commerciale 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 Banca Commerciale to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Banca Commerciale has opened avenues for new revenue streams for the organization in the industry. This can help Banca Commerciale to build a more holistic ecosystem as suggested in the Abelli and Saviotti at Banca Commerciale Italiana (A) case study. Banca Commerciale can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Banca Commerciale to increase its market reach. Banca Commerciale 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Banca Commerciale is facing challenges because of the dominance of functional experts in the organization. Abelli and Saviotti at Banca Commerciale Italiana (A) 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.
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 Banca Commerciale in the consumer business. Now Banca Commerciale can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Banca Commerciale 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 Abelli and Saviotti at Banca Commerciale Italiana (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Banca Commerciale to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Banca Commerciale 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, Banca Commerciale 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.
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. Banca Commerciale 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. Banca Commerciale 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.
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. Banca Commerciale can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Banca Commerciale can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, 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. Banca Commerciale can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Banca Commerciale 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.
Threats Abelli and Saviotti at Banca Commerciale Italiana (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Abelli and Saviotti at Banca Commerciale Italiana (A) 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. Banca Commerciale needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Banca Commerciale 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Banca Commerciale in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Banca Commerciale with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Banca Commerciale in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Banca Commerciale 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Environmental challenges
– Banca Commerciale 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. Banca Commerciale can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Banca Commerciale is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Banca Commerciale 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.
Technology acceleration in Forth Industrial Revolution
– Banca Commerciale has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Banca Commerciale 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.
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. Banca Commerciale 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.
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.
Weighted SWOT Analysis of Abelli and Saviotti at Banca Commerciale Italiana (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 Abelli and Saviotti at Banca Commerciale Italiana (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 Abelli and Saviotti at Banca Commerciale Italiana (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 Abelli and Saviotti at Banca Commerciale Italiana (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 Abelli and Saviotti at Banca Commerciale Italiana (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 Banca Commerciale needs to make to build a sustainable competitive advantage.