Standard Bank Grp (SBKJ) SWOT Analysis / TOWS Matrix / MBA Resources
Money Center Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Standard Bank Grp (South Africa)
Based on various researches at Oak Spring University , Standard Bank Grp is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, there is backlash against globalization,
banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Standard Bank Grp
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Standard Bank Grp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Standard Bank Grp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Standard Bank Grp 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 Standard Bank Grp can be done for the following purposes –
1. Strategic planning of Standard Bank Grp
2. Improving business portfolio management of Standard Bank Grp
3. Assessing feasibility of the new initiative in South Africa
4. Making a Money Center Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Standard Bank Grp
Strengths of Standard Bank Grp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Standard Bank Grp are -
High brand equity
– Standard Bank Grp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Standard Bank Grp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Standard Bank Grp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Standard Bank Grp staying ahead in the Money Center Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Money Center Banks industry
- digital transformation varies from industry to industry. For Standard Bank Grp digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Standard Bank Grp 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.
Ability to recruit top talent
– Standard Bank Grp is one of the leading players in the Money Center Banks industry in South Africa. It is in a position to attract the best talent available in South Africa. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Standard Bank Grp in Money Center 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 Money Center Banks industry
– Standard Bank Grp has clearly differentiated products in the market place. This has enabled Standard Bank Grp to fetch slight price premium compare to the competitors in the Money Center Banks industry. The sustainable margins have also helped Standard Bank Grp to invest into research and development (R&D) and innovation.
Learning organization
- Standard Bank Grp 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 Standard Bank Grp is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Standard Bank Grp emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Standard Bank Grp is present in almost all the verticals within the Money Center Banks industry. This has provided Standard Bank Grp 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
– Standard Bank Grp 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.
Ability to lead change in Money Center Banks
– Standard Bank Grp is one of the leading players in the Money Center Banks industry in South Africa. Over the years it has not only transformed the business landscape in the Money Center Banks industry in South Africa but also across the existing markets. The ability to lead change has enabled Standard Bank Grp in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Standard Bank Grp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Standard Bank Grp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Standard Bank Grp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Standard Bank Grp 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.
Weaknesses of Standard Bank Grp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Standard Bank Grp are -
Ability to respond to the competition
– As the decision making is very deliberative at Standard Bank Grp, in the dynamic environment of Money Center Banks industry it has struggled to respond to the nimble upstart competition. Standard Bank Grp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Standard Bank Grp has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Money Center Banks industry using digital technology.
Lack of clear differentiation of Standard Bank Grp products
– To increase the profitability and margins on the products, Standard Bank Grp needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Money Center Banks industry
– because of the regulatory requirements in South Africa, Standard Bank Grp 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 Money Center Banks industry.
Compensation and incentives
– The revenue per employee of Standard Bank Grp is just above the Money Center 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 South Africa, Standard Bank Grp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Standard Bank Grp strategy
– From the outside it seems that the employees of Standard Bank Grp 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.
Interest costs
– Compare to the competition, Standard Bank Grp has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Standard Bank Grp 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 cash cycle compare to competitors
Standard Bank Grp has a high cash cycle compare to other players in the Money Center 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.
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 Standard Bank Grp supply chain. Even after few cautionary changes, Standard Bank Grp is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Standard Bank Grp vulnerable to further global disruptions in South East Asia.
Standard Bank Grp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Standard Bank Grp are -
Leveraging digital technologies
– Standard Bank Grp can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Standard Bank Grp 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 Standard Bank Grp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Standard Bank Grp can use the latest technology developments to improve its manufacturing and designing process in Money Center 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.
Building a culture of innovation
– managers at Standard Bank Grp 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 Money Center Banks industry.
Learning at scale
– Online learning technologies has now opened space for Standard Bank Grp 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.
Developing new processes and practices
– Standard Bank Grp can develop new processes and procedures in Money Center 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.
Better consumer reach
– The expansion of the 5G network will help Standard Bank Grp to increase its market reach. Standard Bank Grp 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.
Use of Bitcoin and other crypto currencies for transactions in Money Center Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Standard Bank Grp in the Money Center Banks industry. Now Standard Bank Grp can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Standard Bank Grp has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Money Center Banks industry, but it has also influenced the consumer preferences. Standard Bank Grp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Standard Bank Grp has opened avenues for new revenue streams for the organization in Money Center Banks industry. This can help Standard Bank Grp to build a more holistic ecosystem for Standard Bank Grp products in the Money Center Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Money Center Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Standard Bank Grp 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. Standard Bank Grp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Standard Bank Grp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Standard Bank Grp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Standard Bank Grp are -
Consumer confidence and its impact on Standard Bank Grp 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 Money Center Banks industry and other sectors.
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.
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.
Environmental challenges
– Standard Bank Grp 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. Standard Bank Grp can take advantage of this fund but it will also bring new competitors in the Money Center Banks industry.
Increasing wage structure of Standard Bank Grp
– 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 Standard Bank Grp.
Easy access to finance
– Easy access to finance in Money Center Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Standard Bank Grp 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 Standard Bank Grp business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Standard Bank Grp 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 Money Center Banks industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Money Center Banks industry are lowering. It can presents Standard Bank Grp with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Money Center Banks sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Standard Bank Grp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Money Center Banks sector.
High dependence on third party suppliers
– Standard Bank Grp 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.
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. Standard Bank Grp needs to understand the core reasons impacting the Money Center Banks industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Standard Bank Grp 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 Standard Bank Grp prominent markets.
Weighted SWOT Analysis of Standard Bank Grp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Standard Bank Grp 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 Standard Bank Grp 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 Standard Bank Grp 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 Standard Bank Grp 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 Standard Bank Grp needs to make to build a sustainable competitive advantage.
