Svenska Handelsbanken B (0R7S) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

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

Based on various researches at Oak Spring University , Svenska Handelsbanken B is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Svenska Handelsbanken B

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

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

The strengths of Svenska Handelsbanken B are -

Diverse revenue streams

– Svenska Handelsbanken B is present in almost all the verticals within the Regional Banks industry. This has provided Svenska Handelsbanken B 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

– Svenska Handelsbanken B is one of the leading players in the Regional Banks industry in United Kingdom. Over the years it has not only transformed the business landscape in the Regional Banks industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Svenska Handelsbanken B in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

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

Cross disciplinary teams

– Horizontal connected teams at the Svenska Handelsbanken B are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Digital Transformation in Regional Banks industry

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

Sustainable margins compare to other players in Regional Banks industry

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

Ability to recruit top talent

– Svenska Handelsbanken B 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.

Low bargaining power of suppliers

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

Innovation driven organization

– Svenska Handelsbanken B is one of the most innovative firm in Regional Banks sector.

Training and development

– Svenska Handelsbanken B 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.

Effective Research and Development (R&D)

– Svenska Handelsbanken B has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Svenska Handelsbanken B 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 Svenska Handelsbanken B 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.

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

The weaknesses of Svenska Handelsbanken B are -

Employees’ less understanding of Svenska Handelsbanken B strategy

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

No frontier risks strategy

– From the 10K / annual statement of Svenska Handelsbanken B, 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.

Aligning sales with marketing

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

Increasing silos among functional specialists

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

High cash cycle compare to competitors

Svenska Handelsbanken B 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.

Slow to strategic competitive environment developments

– As Svenska Handelsbanken B 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.

Workers concerns about automation

– As automation is fast increasing in the Regional Banks industry, Svenska Handelsbanken B 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.

Lack of clear differentiation of Svenska Handelsbanken B products

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

Need for greater diversity

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

Products dominated business model

– Even though Svenska Handelsbanken B 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. Svenska Handelsbanken B should strive to include more intangible value offerings along with its core products and services.

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

The opportunities of Svenska Handelsbanken B are -

Using analytics as competitive advantage

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

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 Svenska Handelsbanken B in the Regional Banks industry. Now Svenska Handelsbanken B can target international markets with far fewer capital restrictions requirements than the existing system.

Low interest rates

– Even though inflation is raising its head in most developed economies, Svenska Handelsbanken B 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.

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 B can use these opportunities to build new business models that can help the communities that Svenska Handelsbanken B 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 B can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– Svenska Handelsbanken B 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.

Developing new processes and practices

– Svenska Handelsbanken B 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.

Loyalty marketing

– Svenska Handelsbanken B 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.

Better consumer reach

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for Svenska Handelsbanken B 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.

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 B 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.

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 B 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 B 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.

Learning at scale

– Online learning technologies has now opened space for Svenska Handelsbanken B 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.

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

The threats of Svenska Handelsbanken B are -

Trade war between China and United States

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

Technology acceleration in Forth Industrial Revolution

– Svenska Handelsbanken B 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 B 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.

Stagnating economy with rate increase

– Svenska Handelsbanken B 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.

High dependence on third party suppliers

– Svenska Handelsbanken B 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.

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.

Consumer confidence and its impact on Svenska Handelsbanken B 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents Svenska Handelsbanken B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.

Increasing international competition and downward pressure on margins

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

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 B.

Environmental challenges

– Svenska Handelsbanken B 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. Svenska Handelsbanken B can take advantage of this fund but it will also bring new competitors in the Regional Banks industry.

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

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

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 B 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.

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Weighted SWOT Analysis of Svenska Handelsbanken B Template, Example

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

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