Bank Yudha Bhakti (BBYB) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Bank Yudha Bhakti (Indonesia)

Based on various researches at Oak Spring University , Bank Yudha Bhakti is operating in a macro-environment that has been destablized by – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Bank Yudha Bhakti

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bank Yudha Bhakti can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank Yudha Bhakti, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank Yudha Bhakti 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Bank Yudha Bhakti can be done for the following purposes –
1. Strategic planning of Bank Yudha Bhakti
2. Improving business portfolio management of Bank Yudha Bhakti
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 Yudha Bhakti

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Strengths of Bank Yudha Bhakti | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Bank Yudha Bhakti are -

Superior customer experience

– The customer experience strategy of Bank Yudha Bhakti in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Bank Yudha Bhakti is one of the most innovative firm in Regional Banks sector.

Effective Research and Development (R&D)

– Bank Yudha Bhakti has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Bank Yudha Bhakti 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.

High switching costs

– The high switching costs that Bank Yudha Bhakti 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.

Low bargaining power of suppliers

– Suppliers of Bank Yudha Bhakti in the Financial sector have low bargaining power. Bank Yudha Bhakti has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bank Yudha Bhakti to manage not only supply disruptions but also source products at highly competitive prices.

Sustainable margins compare to other players in Regional Banks industry

– Bank Yudha Bhakti has clearly differentiated products in the market place. This has enabled Bank Yudha Bhakti to fetch slight price premium compare to the competitors in the Regional Banks industry. The sustainable margins have also helped Bank Yudha Bhakti to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Bank Yudha Bhakti is present in almost all the verticals within the Regional Banks industry. This has provided Bank Yudha Bhakti 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 Yudha Bhakti 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 Yudha Bhakti in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

- Bank Yudha Bhakti 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 Yudha Bhakti is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Bank Yudha Bhakti emphasize – knowledge, initiative, and innovation.

High brand equity

– Bank Yudha Bhakti has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bank Yudha Bhakti to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Training and development

– Bank Yudha Bhakti 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.

Analytics focus

– Bank Yudha Bhakti 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.

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Weaknesses of Bank Yudha Bhakti | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Bank Yudha Bhakti are -

No frontier risks strategy

– From the 10K / annual statement of Bank Yudha Bhakti, 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.

Need for greater diversity

– Bank Yudha Bhakti has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High bargaining power of channel partners in Regional Banks industry

– because of the regulatory requirements in Indonesia, Bank Yudha Bhakti 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.

High operating costs

– Compare to the competitors, Bank Yudha Bhakti 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 Bank Yudha Bhakti lucrative customers.

Skills based hiring in Regional Banks industry

– The stress on hiring functional specialists at Bank Yudha Bhakti 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 Yudha Bhakti needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Capital Spending Reduction

– Even during the low interest decade, Bank Yudha Bhakti has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Regional Banks industry using digital technology.

Ability to respond to the competition

– As the decision making is very deliberative at Bank Yudha Bhakti, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. Bank Yudha Bhakti has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High cash cycle compare to competitors

Bank Yudha Bhakti 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.

Products dominated business model

– Even though Bank Yudha Bhakti has some of the most successful models in the Regional Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Bank Yudha Bhakti should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– From the outside it seems that Bank Yudha Bhakti needs to have more collaboration between its sales team and marketing team. Sales professionals in the Regional Banks industry have deep experience in developing customer relationships. Marketing department at Bank Yudha Bhakti can leverage the sales team experience to cultivate customer relationships as Bank Yudha Bhakti is planning to shift buying processes online.

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Bank Yudha Bhakti Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Bank Yudha Bhakti are -

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 Yudha Bhakti can use these opportunities to build new business models that can help the communities that Bank Yudha Bhakti operates in. Secondly it can use opportunities from government spending in Regional Banks sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Bank Yudha Bhakti can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Creating value in data economy

– The success of analytics program of Bank Yudha Bhakti has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Bank Yudha Bhakti to build a more holistic ecosystem for Bank Yudha Bhakti products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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 Yudha Bhakti 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 Yudha Bhakti 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Bank Yudha Bhakti 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Bank Yudha Bhakti 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.

Building a culture of innovation

– managers at Bank Yudha Bhakti 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.

Loyalty marketing

– Bank Yudha Bhakti 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.

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 Yudha Bhakti 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 Bank Yudha Bhakti 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.

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 Bank Yudha Bhakti in the Regional Banks industry. Now Bank Yudha Bhakti can target international markets with far fewer capital restrictions requirements than the existing system.

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 Bank Yudha Bhakti 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Bank Yudha Bhakti can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Bank Yudha Bhakti External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Bank Yudha Bhakti are -

Stagnating economy with rate increase

– Bank Yudha Bhakti 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.

Shortening product life cycle

– it is one of the major threat that Bank Yudha Bhakti 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 Bank Yudha Bhakti 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 Bank Yudha Bhakti business can come under increasing regulations regarding data privacy, data security, etc.

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 Yudha Bhakti can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing wage structure of Bank Yudha Bhakti

– 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 Yudha Bhakti.

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.

High dependence on third party suppliers

– Bank Yudha Bhakti 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.

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 Yudha Bhakti in the Regional Banks sector and impact the bottomline of the organization.

Regulatory challenges

– Bank Yudha Bhakti 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.

Environmental challenges

– Bank Yudha Bhakti needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bank Yudha Bhakti can take advantage of this fund but it will also bring new competitors 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 Bank Yudha Bhakti with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.

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 Yudha Bhakti.

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Weighted SWOT Analysis of Bank Yudha Bhakti Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Bank Yudha Bhakti 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 Yudha Bhakti 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 Yudha Bhakti 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 Yudha Bhakti 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 Yudha Bhakti needs to make to build a sustainable competitive advantage.

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