Bank of Nova Scotia (BNS) SWOT Analysis / TOWS Matrix / MBA Resources
Money Center Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Bank of Nova Scotia (United States)
Based on various researches at Oak Spring University , Bank of Nova Scotia is operating in a macro-environment that has been destablized by – there is backlash against globalization, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
increasing energy prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Bank of Nova Scotia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bank of Nova Scotia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bank of Nova Scotia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bank of Nova Scotia 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 Bank of Nova Scotia can be done for the following purposes –
1. Strategic planning of Bank of Nova Scotia
2. Improving business portfolio management of Bank of Nova Scotia
3. Assessing feasibility of the new initiative in United States
4. Making a Money Center Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bank of Nova Scotia
Strengths of Bank of Nova Scotia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bank of Nova Scotia are -
Operational resilience
– The operational resilience strategy of Bank of Nova Scotia comprises – understanding the underlying the factors in the Money Center 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.
Analytics focus
– Bank of Nova Scotia 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 Money Center Banks industry. The technology infrastructure of United States 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.
Strong track record of project management in the Money Center Banks industry
– Bank of Nova Scotia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Bank of Nova Scotia is one of the most innovative firm in Money Center Banks sector.
Training and development
– Bank of Nova Scotia 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.
Low bargaining power of suppliers
– Suppliers of Bank of Nova Scotia in the Financial sector have low bargaining power. Bank of Nova Scotia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bank of Nova Scotia to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Money Center Banks industry
– Bank of Nova Scotia has clearly differentiated products in the market place. This has enabled Bank of Nova Scotia to fetch slight price premium compare to the competitors in the Money Center Banks industry. The sustainable margins have also helped Bank of Nova Scotia to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Bank of Nova Scotia is one of the leading players in the Money Center Banks industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Bank of Nova Scotia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bank of Nova Scotia 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.
Ability to lead change in Money Center Banks
– Bank of Nova Scotia is one of the leading players in the Money Center Banks industry in United States. Over the years it has not only transformed the business landscape in the Money Center Banks industry in United States but also across the existing markets. The ability to lead change has enabled Bank of Nova Scotia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Bank of Nova Scotia has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Money Center Banks industry. Secondly the value chain collaborators of Bank of Nova Scotia have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Bank of Nova Scotia in Money Center Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Bank of Nova Scotia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bank of Nova Scotia are -
Slow decision making process
– As mentioned earlier in the report, Bank of Nova Scotia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Money Center Banks industry over the last five years. Bank of Nova Scotia 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.
Compensation and incentives
– The revenue per employee of Bank of Nova Scotia 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.
High dependence on Bank of Nova Scotia ‘s star products
– The top 2 products and services of Bank of Nova Scotia still accounts for major business revenue. This dependence on star products in Money Center Banks industry has resulted into insufficient focus on developing new products, even though Bank of Nova Scotia has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Bank of Nova Scotia, in the dynamic environment of Money Center Banks industry it has struggled to respond to the nimble upstart competition. Bank of Nova Scotia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Bank of Nova Scotia 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.
Employees’ less understanding of Bank of Nova Scotia strategy
– From the outside it seems that the employees of Bank of Nova Scotia 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.
Slow to strategic competitive environment developments
– As Bank of Nova Scotia is one of the leading players in the Money Center Banks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Money Center Banks industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Bank of Nova Scotia 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.
No frontier risks strategy
– From the 10K / annual statement of Bank of Nova Scotia, it seems that company is thinking out the frontier risks that can impact Money Center 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 Bank of Nova Scotia needs to have more collaboration between its sales team and marketing team. Sales professionals in the Money Center Banks industry have deep experience in developing customer relationships. Marketing department at Bank of Nova Scotia can leverage the sales team experience to cultivate customer relationships as Bank of Nova Scotia is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bank of Nova Scotia is slow explore the new channels of communication. These new channels of communication can help Bank of Nova Scotia to provide better information regarding Money Center Banks products and services. It can also build an online community to further reach out to potential customers.
Bank of Nova Scotia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Bank of Nova Scotia are -
Building a culture of innovation
– managers at Bank of Nova Scotia 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.
Buying journey improvements
– Bank of Nova Scotia can improve the customer journey of consumers in the Money Center Banks industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Bank of Nova Scotia has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Money Center Banks sector. This continuous investment in analytics has enabled Bank of Nova Scotia to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bank of Nova Scotia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Bank of Nova Scotia has opened avenues for new revenue streams for the organization in Money Center Banks industry. This can help Bank of Nova Scotia to build a more holistic ecosystem for Bank of Nova Scotia 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. Bank of Nova Scotia can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bank of Nova Scotia 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.
Leveraging digital technologies
– Bank of Nova Scotia 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.
Loyalty marketing
– Bank of Nova Scotia 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bank of Nova Scotia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Money Center Banks industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bank of Nova Scotia can use these opportunities to build new business models that can help the communities that Bank of Nova Scotia operates in. Secondly it can use opportunities from government spending in Money Center Banks sector.
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 Bank of Nova Scotia 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bank of Nova Scotia 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 Bank of Nova Scotia to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Bank of Nova Scotia to increase its market reach. Bank of Nova Scotia 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.
Learning at scale
– Online learning technologies has now opened space for Bank of Nova Scotia 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.
Threats Bank of Nova Scotia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Bank of Nova Scotia are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bank of Nova Scotia in Money Center Banks industry. The Money Center 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.
Consumer confidence and its impact on Bank of Nova Scotia 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bank of Nova Scotia business can come under increasing regulations regarding data privacy, data security, etc.
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 Bank of Nova Scotia.
Stagnating economy with rate increase
– Bank of Nova Scotia 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.
Technology acceleration in Forth Industrial Revolution
– Bank of Nova Scotia has witnessed rapid integration of technology during Covid-19 in the Money Center Banks industry. As one of the leading players in the industry, Bank of Nova Scotia needs to keep up with the evolution of technology in the Money Center 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 Bank of Nova Scotia
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bank of Nova Scotia.
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.
Shortening product life cycle
– it is one of the major threat that Bank of Nova Scotia is facing in Money Center Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Money Center Banks industry are lowering. It can presents Bank of Nova Scotia 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bank of Nova Scotia 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.
High dependence on third party suppliers
– Bank of Nova Scotia 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.
Weighted SWOT Analysis of Bank of Nova Scotia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Bank of Nova Scotia needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Bank of Nova Scotia is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Bank of Nova Scotia is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Bank of Nova Scotia to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bank of Nova Scotia needs to make to build a sustainable competitive advantage.
