BIMB (BIMB) SWOT Analysis / TOWS Matrix / MBA Resources
S&Ls/Savings Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for BIMB (Malaysia)
Based on various researches at Oak Spring University , BIMB is operating in a macro-environment that has been destablized by – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing energy prices,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BIMB can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BIMB, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BIMB operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of BIMB can be done for the following purposes –
1. Strategic planning of BIMB
2. Improving business portfolio management of BIMB
3. Assessing feasibility of the new initiative in Malaysia
4. Making a S&Ls/Savings Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BIMB
Strengths of BIMB | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of BIMB are -
Innovation driven organization
– BIMB is one of the most innovative firm in S&Ls/Savings Banks sector.
Analytics focus
– BIMB 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 S&Ls/Savings Banks industry. The technology infrastructure of Malaysia 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.
Diverse revenue streams
– BIMB is present in almost all the verticals within the S&Ls/Savings Banks industry. This has provided BIMB 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.
Cross disciplinary teams
– Horizontal connected teams at the BIMB 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.
Low bargaining power of suppliers
– Suppliers of BIMB in the Financial sector have low bargaining power. BIMB has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps BIMB to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that BIMB 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
– BIMB has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled BIMB to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– BIMB is one of the leading players in the S&Ls/Savings Banks industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– BIMB has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. BIMB 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.
Operational resilience
– The operational resilience strategy of BIMB comprises – understanding the underlying the factors in the S&Ls/Savings 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.
Strong track record of project management in the S&Ls/Savings Banks industry
– BIMB is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– BIMB has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – BIMB staying ahead in the S&Ls/Savings Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of BIMB | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BIMB are -
Products dominated business model
– Even though BIMB has some of the most successful models in the S&Ls/Savings Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. BIMB should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of BIMB is just above the S&Ls/Savings 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.
Low market penetration in new markets
– Outside its home market of Malaysia, BIMB needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the S&Ls/Savings Banks industry, BIMB 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.
Increasing silos among functional specialists
– The organizational structure of BIMB is dominated by functional specialists. It is not different from other players in the S&Ls/Savings Banks industry, but BIMB needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help BIMB to focus more on services in the S&Ls/Savings Banks industry rather than just following the product oriented approach.
High bargaining power of channel partners in S&Ls/Savings Banks industry
– because of the regulatory requirements in Malaysia, BIMB 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 S&Ls/Savings Banks industry.
High operating costs
– Compare to the competitors, BIMB has high operating costs in the S&Ls/Savings Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract BIMB lucrative customers.
Employees’ less understanding of BIMB strategy
– From the outside it seems that the employees of BIMB 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.
Ability to respond to the competition
– As the decision making is very deliberative at BIMB, in the dynamic environment of S&Ls/Savings Banks industry it has struggled to respond to the nimble upstart competition. BIMB has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in S&Ls/Savings Banks industry
– The stress on hiring functional specialists at BIMB 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.
Need for greater diversity
– BIMB 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.
BIMB Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of BIMB are -
Developing new processes and practices
– BIMB can develop new processes and procedures in S&Ls/Savings 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, BIMB 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.
Using analytics as competitive advantage
– BIMB has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in S&Ls/Savings Banks sector. This continuous investment in analytics has enabled BIMB to build a competitive advantage using analytics. The analytics driven competitive advantage can help BIMB to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 BIMB 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for BIMB 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 BIMB to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for BIMB 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.
Building a culture of innovation
– managers at BIMB 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 S&Ls/Savings Banks industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, BIMB is facing challenges because of the dominance of functional experts in the organization. BIMB can utilize new technology in the field of S&Ls/Savings Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help BIMB to increase its market reach. BIMB 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the S&Ls/Savings Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. BIMB 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. BIMB 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.
Use of Bitcoin and other crypto currencies for transactions in S&Ls/Savings Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for BIMB in the S&Ls/Savings Banks industry. Now BIMB can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, BIMB 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 BIMB to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. BIMB can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats BIMB External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of BIMB are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, BIMB 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 BIMB prominent markets.
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 BIMB business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– BIMB 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.
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. BIMB 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to S&Ls/Savings Banks industry are lowering. It can presents BIMB with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the S&Ls/Savings Banks sector.
Increasing wage structure of BIMB
– 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 BIMB.
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.
Regulatory challenges
– BIMB 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 S&Ls/Savings Banks industry regulations.
Easy access to finance
– Easy access to finance in S&Ls/Savings Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. BIMB can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on BIMB 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 S&Ls/Savings Banks industry and other sectors.
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 BIMB.
Stagnating economy with rate increase
– BIMB 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 S&Ls/Savings Banks industry.
Weighted SWOT Analysis of BIMB Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at BIMB 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 BIMB 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 BIMB 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 BIMB 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 BIMB needs to make to build a sustainable competitive advantage.