Bank Mandiri Persero (BMRI) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Bank Mandiri Persero (Indonesia)
Based on various researches at Oak Spring University , Bank Mandiri Persero is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing commodity prices, wage bills are increasing, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Bank Mandiri Persero
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bank Mandiri Persero can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank Mandiri Persero, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank Mandiri Persero operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Bank Mandiri Persero can be done for the following purposes –
1. Strategic planning of Bank Mandiri Persero
2. Improving business portfolio management of Bank Mandiri Persero
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bank Mandiri Persero
Strengths of Bank Mandiri Persero | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bank Mandiri Persero are -
Analytics focus
– Bank Mandiri Persero 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 Regional Banks industry. The technology infrastructure of Indonesia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Highly skilled collaborators
– Bank Mandiri Persero 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 Bank Mandiri Persero have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Bank Mandiri Persero has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bank Mandiri Persero to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Bank Mandiri Persero 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.
Superior customer experience
– The customer experience strategy of Bank Mandiri Persero in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Bank Mandiri Persero has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Bank Mandiri Persero 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.
Operational resilience
– The operational resilience strategy of Bank Mandiri Persero comprises – understanding the underlying the factors in the Regional Banks 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.
Learning organization
- Bank Mandiri Persero 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 Mandiri Persero is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Bank Mandiri Persero emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Bank Mandiri Persero is present in almost all the verticals within the Regional Banks industry. This has provided Bank Mandiri Persero 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.
Ability to lead change in Regional Banks
– Bank Mandiri Persero is one of the leading players in the Regional Banks industry in Indonesia. Over the years it has not only transformed the business landscape in the Regional Banks industry in Indonesia but also across the existing markets. The ability to lead change has enabled Bank Mandiri Persero in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Bank Mandiri Persero in the Financial sector have low bargaining power. Bank Mandiri Persero has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bank Mandiri Persero to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Bank Mandiri Persero has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bank Mandiri Persero 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 of Bank Mandiri Persero | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bank Mandiri Persero are -
Skills based hiring in Regional Banks industry
– The stress on hiring functional specialists at Bank Mandiri Persero 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.
Low market penetration in new markets
– Outside its home market of Indonesia, Bank Mandiri Persero needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Bank Mandiri Persero 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. Bank Mandiri Persero 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.
Slow to strategic competitive environment developments
– As Bank Mandiri Persero 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.
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 Mandiri Persero supply chain. Even after few cautionary changes, Bank Mandiri Persero is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bank Mandiri Persero vulnerable to further global disruptions in South East Asia.
High dependence on Bank Mandiri Persero ‘s star products
– The top 2 products and services of Bank Mandiri Persero 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 Bank Mandiri Persero has relatively successful track record of launching new products.
High cash cycle compare to competitors
Bank Mandiri Persero has a high cash cycle compare to other players in the Regional Banks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at Bank Mandiri Persero, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. Bank Mandiri Persero has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Bank Mandiri Persero is just above the Regional Banks industry average. It 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 bargaining power of channel partners in Regional Banks industry
– because of the regulatory requirements in Indonesia, Bank Mandiri Persero is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Regional Banks industry.
No frontier risks strategy
– From the 10K / annual statement of Bank Mandiri Persero, 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.
Bank Mandiri Persero Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Bank Mandiri Persero are -
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. Bank Mandiri Persero can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Mandiri Persero can use these opportunities to build new business models that can help the communities that Bank Mandiri Persero operates in. Secondly it can use opportunities from government spending in Regional Banks sector.
Using analytics as competitive advantage
– Bank Mandiri Persero 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 Bank Mandiri Persero to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bank Mandiri Persero to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Bank Mandiri Persero 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.
Learning at scale
– Online learning technologies has now opened space for Bank Mandiri Persero 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Regional Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bank Mandiri Persero 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 Mandiri Persero 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bank Mandiri Persero in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Regional Banks industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bank Mandiri Persero can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bank Mandiri Persero 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 Bank Mandiri Persero to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bank Mandiri Persero 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 Bank Mandiri Persero to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Bank Mandiri Persero has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Bank Mandiri Persero to build a more holistic ecosystem for Bank Mandiri Persero products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Bank Mandiri Persero 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.
Developing new processes and practices
– Bank Mandiri Persero can develop new processes and procedures in Regional Banks 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.
Threats Bank Mandiri Persero External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Bank Mandiri Persero are -
Increasing wage structure of Bank Mandiri Persero
– 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 Mandiri Persero.
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 Mandiri Persero.
Easy access to finance
– Easy access to finance in Regional Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bank Mandiri Persero can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents Bank Mandiri Persero with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
Regulatory challenges
– Bank Mandiri Persero 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bank Mandiri Persero 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.
Stagnating economy with rate increase
– Bank Mandiri Persero 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Bank Mandiri Persero may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Regional Banks 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 Bank Mandiri Persero in the Regional Banks sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Bank Mandiri Persero is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bank Mandiri Persero 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 Bank Mandiri Persero prominent markets.
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 Mandiri Persero needs to understand the core reasons impacting the Regional Banks industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Bank Mandiri Persero Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Bank Mandiri Persero 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 Bank Mandiri Persero 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 Bank Mandiri Persero is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Bank Mandiri Persero 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 Mandiri Persero needs to make to build a sustainable competitive advantage.
