Bank Panin Syariah (PNBS) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Bank Panin Syariah (Indonesia)

Based on various researches at Oak Spring University , Bank Panin Syariah is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, wage bills are increasing, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing household debt because of falling income levels, technology disruption, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of Bank Panin Syariah

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bank Panin Syariah can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank Panin Syariah, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank Panin Syariah 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 Panin Syariah can be done for the following purposes –
1. Strategic planning of Bank Panin Syariah
2. Improving business portfolio management of Bank Panin Syariah
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 Panin Syariah

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

The strengths of Bank Panin Syariah are -

Digital Transformation in Regional Banks industry

- digital transformation varies from industry to industry. For Bank Panin Syariah digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bank Panin Syariah 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.

Strong track record of project management in the Regional Banks industry

– Bank Panin Syariah is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Diverse revenue streams

– Bank Panin Syariah is present in almost all the verticals within the Regional Banks industry. This has provided Bank Panin Syariah 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.

Training and development

– Bank Panin Syariah 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 Panin Syariah in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Regional Banks industry

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

Highly skilled collaborators

– Bank Panin Syariah 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 Panin Syariah have helped the firm to develop new products and bring them quickly to the marketplace.

Low bargaining power of suppliers

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

Effective Research and Development (R&D)

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

Successful track record of launching new products

– Bank Panin Syariah has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bank Panin Syariah has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

High switching costs

– The high switching costs that Bank Panin Syariah 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.

High brand equity

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

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

The weaknesses of Bank Panin Syariah are -

Increasing silos among functional specialists

– The organizational structure of Bank Panin Syariah is dominated by functional specialists. It is not different from other players in the Regional Banks industry, but Bank Panin Syariah needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bank Panin Syariah to focus more on services in the Regional Banks industry rather than just following the product oriented approach.

Skills based hiring in Regional Banks industry

– The stress on hiring functional specialists at Bank Panin Syariah 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.

No frontier risks strategy

– From the 10K / annual statement of Bank Panin Syariah, 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.

Employees’ less understanding of Bank Panin Syariah strategy

– From the outside it seems that the employees of Bank Panin Syariah 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.

Low market penetration in new markets

– Outside its home market of Indonesia, Bank Panin Syariah needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow decision making process

– As mentioned earlier in the report, Bank Panin Syariah 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 Panin Syariah 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 harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bank Panin Syariah is slow explore the new channels of communication. These new channels of communication can help Bank Panin Syariah to provide better information regarding Regional Banks products and services. It can also build an online community to further reach out to potential customers.

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 Panin Syariah supply chain. Even after few cautionary changes, Bank Panin Syariah is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bank Panin Syariah vulnerable to further global disruptions in South East Asia.

High operating costs

– Compare to the competitors, Bank Panin Syariah 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 Panin Syariah lucrative customers.

Lack of clear differentiation of Bank Panin Syariah products

– To increase the profitability and margins on the products, Bank Panin Syariah needs to provide more differentiated products than what it is currently offering in the marketplace.

Products dominated business model

– Even though Bank Panin Syariah 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 Panin Syariah should strive to include more intangible value offerings along with its core products and services.

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

The opportunities of Bank Panin Syariah are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Bank Panin Syariah 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.

Buying journey improvements

– Bank Panin Syariah 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bank Panin Syariah 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 Panin Syariah to hire the very best people irrespective of their geographical location.

Creating value in data economy

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

Better consumer reach

– The expansion of the 5G network will help Bank Panin Syariah to increase its market reach. Bank Panin Syariah 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.

Loyalty marketing

– Bank Panin Syariah 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.

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 Panin Syariah 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 Panin Syariah 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.

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 Panin Syariah can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

– Bank Panin Syariah 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 Panin Syariah to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bank Panin Syariah 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 Panin Syariah 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.

Developing new processes and practices

– Bank Panin Syariah 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.

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 Panin Syariah can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Manufacturing automation

– Bank Panin Syariah can use the latest technology developments to improve its manufacturing and designing process in Regional Banks sector. 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.

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Threats Bank Panin Syariah External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Bank Panin Syariah are -

Increasing wage structure of Bank Panin Syariah

– 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 Panin Syariah.

Environmental challenges

– Bank Panin Syariah 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 Panin Syariah can take advantage of this fund but it will also bring new competitors in the Regional Banks industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Bank Panin Syariah 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 Panin Syariah prominent markets.

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

Stagnating economy with rate increase

– Bank Panin Syariah 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 Bank Panin Syariah with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.

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.

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. Bank Panin Syariah 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Bank Panin Syariah 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.

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.

Regulatory challenges

– Bank Panin Syariah 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.

High dependence on third party suppliers

– Bank Panin Syariah 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.

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 Panin Syariah business can come under increasing regulations regarding data privacy, data security, etc.

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Weighted SWOT Analysis of Bank Panin Syariah Template, Example

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

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