Svenska Handelsbanken A (0R7R) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Svenska Handelsbanken A (United Kingdom)

Based on various researches at Oak Spring University , Svenska Handelsbanken A is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, technology disruption, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, increasing energy prices, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of Svenska Handelsbanken A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Svenska Handelsbanken A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Svenska Handelsbanken A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Svenska Handelsbanken A 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 Svenska Handelsbanken A can be done for the following purposes –
1. Strategic planning of Svenska Handelsbanken A
2. Improving business portfolio management of Svenska Handelsbanken A
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Svenska Handelsbanken A

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Strengths of Svenska Handelsbanken A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Svenska Handelsbanken A are -

Low bargaining power of suppliers

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

Successful track record of launching new products

– Svenska Handelsbanken A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Svenska Handelsbanken A 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 brand equity

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

Analytics focus

– Svenska Handelsbanken A 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 United Kingdom 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.

Sustainable margins compare to other players in Regional Banks industry

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

High switching costs

– The high switching costs that Svenska Handelsbanken A has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Strong track record of project management in the Regional Banks industry

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

Learning organization

- Svenska Handelsbanken A 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 Svenska Handelsbanken A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Svenska Handelsbanken A emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– Svenska Handelsbanken A 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 Svenska Handelsbanken A have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to recruit top talent

– Svenska Handelsbanken A is one of the leading players in the Regional Banks industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.

Organizational Resilience of Svenska Handelsbanken A

– The covid-19 pandemic has put organizational resilience at the centre of everthing Svenska Handelsbanken A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

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

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Weaknesses of Svenska Handelsbanken A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Svenska Handelsbanken A are -

Skills based hiring in Regional Banks industry

– The stress on hiring functional specialists at Svenska Handelsbanken A 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.

Lack of clear differentiation of Svenska Handelsbanken A products

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

Employees’ less understanding of Svenska Handelsbanken A strategy

– From the outside it seems that the employees of Svenska Handelsbanken A 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.

High cash cycle compare to competitors

Svenska Handelsbanken A 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.

Compensation and incentives

– The revenue per employee of Svenska Handelsbanken A 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 operating costs

– Compare to the competitors, Svenska Handelsbanken A 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 Svenska Handelsbanken A lucrative customers.

Aligning sales with marketing

– From the outside it seems that Svenska Handelsbanken A 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 Svenska Handelsbanken A can leverage the sales team experience to cultivate customer relationships as Svenska Handelsbanken A is planning to shift buying processes online.

Workers concerns about automation

– As automation is fast increasing in the Regional Banks industry, Svenska Handelsbanken A needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Slow decision making process

– As mentioned earlier in the report, Svenska Handelsbanken A 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. Svenska Handelsbanken A 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, Svenska Handelsbanken A is slow explore the new channels of communication. These new channels of communication can help Svenska Handelsbanken A to provide better information regarding Regional Banks products and services. It can also build an online community to further reach out to potential customers.

Low market penetration in new markets

– Outside its home market of United Kingdom, Svenska Handelsbanken A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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Svenska Handelsbanken A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Svenska Handelsbanken A are -

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. Svenska Handelsbanken A 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. Svenska Handelsbanken A 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 Svenska Handelsbanken A 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.

Creating value in data economy

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

Using analytics as competitive advantage

– Svenska Handelsbanken A 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 Svenska Handelsbanken A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Svenska Handelsbanken A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Svenska Handelsbanken A 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 Svenska Handelsbanken A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Developing new processes and practices

– Svenska Handelsbanken A 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.

Building a culture of innovation

– managers at Svenska Handelsbanken A 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.

Better consumer reach

– The expansion of the 5G network will help Svenska Handelsbanken A to increase its market reach. Svenska Handelsbanken A 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.

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 Svenska Handelsbanken A 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Svenska Handelsbanken A can use these opportunities to build new business models that can help the communities that Svenska Handelsbanken A 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 Svenska Handelsbanken A 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 Svenska Handelsbanken A 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 Svenska Handelsbanken A to hire the very best people irrespective of their geographical location.

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. Svenska Handelsbanken A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Svenska Handelsbanken A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Svenska Handelsbanken A are -

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Svenska Handelsbanken A needs to understand the core reasons impacting the Regional Banks industry. This will help it in building a better workplace.

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. Svenska Handelsbanken A will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

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 Svenska Handelsbanken A.

High dependence on third party suppliers

– Svenska Handelsbanken A 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 Svenska Handelsbanken A business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Svenska Handelsbanken A is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– Svenska Handelsbanken A has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, Svenska Handelsbanken A 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.

Increasing wage structure of Svenska Handelsbanken A

– 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 Svenska Handelsbanken A.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Svenska Handelsbanken A 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Svenska Handelsbanken A 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 Svenska Handelsbanken A prominent markets.

Consumer confidence and its impact on Svenska Handelsbanken A demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Regional Banks industry and other sectors.

Stagnating economy with rate increase

– Svenska Handelsbanken A 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.

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Weighted SWOT Analysis of Svenska Handelsbanken A Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Svenska Handelsbanken A needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of Svenska Handelsbanken A is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of Svenska Handelsbanken A is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Svenska Handelsbanken A 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 Svenska Handelsbanken A needs to make to build a sustainable competitive advantage.

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