Dhanlaxmi Bank (DNBK) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Dhanlaxmi Bank (India)
Based on various researches at Oak Spring University , Dhanlaxmi Bank is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing commodity prices,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dhanlaxmi Bank can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dhanlaxmi Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dhanlaxmi 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 Dhanlaxmi Bank can be done for the following purposes –
1. Strategic planning of Dhanlaxmi Bank
2. Improving business portfolio management of Dhanlaxmi Bank
3. Assessing feasibility of the new initiative in India
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dhanlaxmi Bank
Strengths of Dhanlaxmi Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dhanlaxmi Bank are -
Successful track record of launching new products
– Dhanlaxmi Bank has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dhanlaxmi 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.
Learning organization
- Dhanlaxmi 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 Dhanlaxmi Bank is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dhanlaxmi Bank emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Dhanlaxmi Bank is one of the leading players in the Regional Banks industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Dhanlaxmi Bank 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.
Innovation driven organization
– Dhanlaxmi Bank is one of the most innovative firm in Regional Banks sector.
Digital Transformation in Regional Banks industry
- digital transformation varies from industry to industry. For Dhanlaxmi Bank digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dhanlaxmi 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.
Training and development
– Dhanlaxmi Bank has one of the best training and development program in Financial industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Dhanlaxmi Bank in the Financial sector have low bargaining power. Dhanlaxmi Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dhanlaxmi Bank to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Regional Banks
– Dhanlaxmi Bank is one of the leading players in the Regional Banks industry in India. Over the years it has not only transformed the business landscape in the Regional Banks industry in India but also across the existing markets. The ability to lead change has enabled Dhanlaxmi Bank in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Dhanlaxmi Bank has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Regional Banks industry. Secondly the value chain collaborators of Dhanlaxmi Bank have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Dhanlaxmi Bank has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dhanlaxmi Bank staying ahead in the Regional Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Dhanlaxmi Bank in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Dhanlaxmi Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dhanlaxmi Bank are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dhanlaxmi Bank is slow explore the new channels of communication. These new channels of communication can help Dhanlaxmi Bank to provide better information regarding Regional Banks 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 Dhanlaxmi Bank is dominated by functional specialists. It is not different from other players in the Regional Banks industry, but Dhanlaxmi Bank needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dhanlaxmi Bank to focus more on services in the Regional Banks industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Dhanlaxmi Bank, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. Dhanlaxmi Bank has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Dhanlaxmi 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 Regional Banks industry over the last five years. Dhanlaxmi 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.
High operating costs
– Compare to the competitors, Dhanlaxmi Bank has high operating costs in the Regional Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Dhanlaxmi Bank lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of Dhanlaxmi Bank, it seems that company is thinking out the frontier risks that can impact Regional Banks industry. 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 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 Dhanlaxmi Bank supply chain. Even after few cautionary changes, Dhanlaxmi Bank is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dhanlaxmi Bank vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Dhanlaxmi Bank products
– To increase the profitability and margins on the products, Dhanlaxmi Bank needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Dhanlaxmi Bank is one of the leading players in the Regional Banks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Regional Banks industry in last five years.
Low market penetration in new markets
– Outside its home market of India, Dhanlaxmi Bank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Dhanlaxmi Bank ‘s star products
– The top 2 products and services of Dhanlaxmi Bank still accounts for major business revenue. This dependence on star products in Regional Banks industry has resulted into insufficient focus on developing new products, even though Dhanlaxmi Bank has relatively successful track record of launching new products.
Dhanlaxmi Bank Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dhanlaxmi Bank are -
Building a culture of innovation
– managers at Dhanlaxmi 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 Regional Banks industry.
Creating value in data economy
– The success of analytics program of Dhanlaxmi Bank has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Dhanlaxmi Bank to build a more holistic ecosystem for Dhanlaxmi Bank products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dhanlaxmi Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Dhanlaxmi Bank 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.
Use of Bitcoin and other crypto currencies for transactions in Regional Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Dhanlaxmi Bank in the Regional Banks industry. Now Dhanlaxmi Bank can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Dhanlaxmi Bank to increase its market reach. Dhanlaxmi 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.
Buying journey improvements
– Dhanlaxmi Bank can improve the customer journey of consumers in the Regional Banks industry by using analytics and artificial intelligence. It 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Regional Banks industry, but it has also influenced the consumer preferences. Dhanlaxmi Bank can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Dhanlaxmi Bank can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Dhanlaxmi Bank 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dhanlaxmi 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 Dhanlaxmi Bank to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Dhanlaxmi Bank has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Regional Banks sector. This continuous investment in analytics has enabled Dhanlaxmi Bank to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dhanlaxmi Bank to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dhanlaxmi Bank can use these opportunities to build new business models that can help the communities that Dhanlaxmi Bank operates in. Secondly it can use opportunities from government spending in Regional Banks sector.
Threats Dhanlaxmi Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dhanlaxmi Bank are -
Environmental challenges
– Dhanlaxmi 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. Dhanlaxmi Bank can take advantage of this fund but it will also bring new competitors in the Regional Banks industry.
High dependence on third party suppliers
– Dhanlaxmi 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.
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 Dhanlaxmi Bank.
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.
Technology acceleration in Forth Industrial Revolution
– Dhanlaxmi Bank has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, Dhanlaxmi Bank needs to keep up with the evolution of technology in the Regional Banks 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.
Regulatory challenges
– Dhanlaxmi 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 Regional Banks industry regulations.
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. Dhanlaxmi 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.
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. Dhanlaxmi Bank needs to understand the core reasons impacting the Regional Banks industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Dhanlaxmi Bank is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dhanlaxmi Bank in Regional Banks industry. The Regional Banks 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.
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 Dhanlaxmi Bank business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Dhanlaxmi Bank 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 Regional Banks industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents Dhanlaxmi Bank with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
Weighted SWOT Analysis of Dhanlaxmi Bank Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dhanlaxmi Bank 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 Dhanlaxmi Bank 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 Dhanlaxmi Bank 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 Dhanlaxmi Bank 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 Dhanlaxmi Bank needs to make to build a sustainable competitive advantage.