Canadian Imperial Bank (CM) SWOT Analysis / TOWS Matrix / MBA Resources
Money Center Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Canadian Imperial Bank (Canada)
Based on various researches at Oak Spring University , Canadian Imperial Bank is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, technology disruption, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Canadian Imperial Bank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Canadian Imperial Bank can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Canadian Imperial Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Canadian Imperial Bank 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 Canadian Imperial Bank can be done for the following purposes –
1. Strategic planning of Canadian Imperial Bank
2. Improving business portfolio management of Canadian Imperial Bank
3. Assessing feasibility of the new initiative in Canada
4. Making a Money Center Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Canadian Imperial Bank
Strengths of Canadian Imperial Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Canadian Imperial Bank are -
High brand equity
– Canadian Imperial Bank has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Canadian Imperial Bank to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Canadian Imperial Bank is one of the most innovative firm in Money Center Banks sector.
Analytics focus
– Canadian Imperial Bank 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 Canada 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.
Operational resilience
– The operational resilience strategy of Canadian Imperial Bank 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.
Learning organization
- Canadian Imperial Bank 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 Canadian Imperial Bank is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Canadian Imperial Bank emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Canadian Imperial Bank 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.
High switching costs
– The high switching costs that Canadian Imperial Bank 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 Money Center Banks industry
– Canadian Imperial Bank is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Canadian Imperial Bank is present in almost all the verticals within the Money Center Banks industry. This has provided Canadian Imperial Bank 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.
Low bargaining power of suppliers
– Suppliers of Canadian Imperial Bank in the Financial sector have low bargaining power. Canadian Imperial Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Canadian Imperial Bank to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Canadian Imperial Bank has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Canadian Imperial Bank 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.
Effective Research and Development (R&D)
– Canadian Imperial Bank has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Canadian Imperial Bank 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.
Weaknesses of Canadian Imperial Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Canadian Imperial Bank are -
Workers concerns about automation
– As automation is fast increasing in the Money Center Banks industry, Canadian Imperial Bank 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.
High dependence on Canadian Imperial Bank ‘s star products
– The top 2 products and services of Canadian Imperial Bank 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 Canadian Imperial Bank has relatively successful track record of launching new products.
Employees’ less understanding of Canadian Imperial Bank strategy
– From the outside it seems that the employees of Canadian Imperial Bank 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.
Increasing silos among functional specialists
– The organizational structure of Canadian Imperial Bank is dominated by functional specialists. It is not different from other players in the Money Center Banks industry, but Canadian Imperial Bank needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Canadian Imperial Bank to focus more on services in the Money Center Banks industry rather than just following the product oriented approach.
Products dominated business model
– Even though Canadian Imperial Bank has some of the most successful models in the Money Center Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Canadian Imperial Bank should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Canada, Canadian Imperial Bank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Money Center Banks industry
– because of the regulatory requirements in Canada, Canadian Imperial Bank 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.
Slow decision making process
– As mentioned earlier in the report, Canadian Imperial Bank 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. Canadian Imperial Bank 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.
High cash cycle compare to competitors
Canadian Imperial Bank 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.
Ability to respond to the competition
– As the decision making is very deliberative at Canadian Imperial Bank, in the dynamic environment of Money Center Banks industry it has struggled to respond to the nimble upstart competition. Canadian Imperial Bank has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Canadian Imperial Bank 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 Canadian Imperial Bank can leverage the sales team experience to cultivate customer relationships as Canadian Imperial Bank is planning to shift buying processes online.
Canadian Imperial Bank Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Canadian Imperial Bank are -
Using analytics as competitive advantage
– Canadian Imperial Bank 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 Canadian Imperial Bank to build a competitive advantage using analytics. The analytics driven competitive advantage can help Canadian Imperial Bank to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Canadian Imperial Bank 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 Canadian Imperial Bank to increase its market reach. Canadian Imperial Bank 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.
Manufacturing automation
– Canadian Imperial Bank 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.
Learning at scale
– Online learning technologies has now opened space for Canadian Imperial Bank 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Canadian Imperial Bank 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 Canadian Imperial Bank to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Canadian Imperial Bank 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.
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. Canadian Imperial Bank 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. Canadian Imperial Bank 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.
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. Canadian Imperial Bank can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Canadian Imperial Bank 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 Canadian Imperial Bank to hire the very best people irrespective of their geographical location.
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 Canadian Imperial Bank in the Money Center Banks industry. Now Canadian Imperial Bank can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Canadian Imperial Bank 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.
Creating value in data economy
– The success of analytics program of Canadian Imperial Bank has opened avenues for new revenue streams for the organization in Money Center Banks industry. This can help Canadian Imperial Bank to build a more holistic ecosystem for Canadian Imperial Bank products in the Money Center Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Canadian Imperial Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Canadian Imperial Bank are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Canadian Imperial Bank 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 Canadian Imperial Bank prominent markets.
Technology acceleration in Forth Industrial Revolution
– Canadian Imperial Bank has witnessed rapid integration of technology during Covid-19 in the Money Center Banks industry. As one of the leading players in the industry, Canadian Imperial Bank 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.
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. Canadian Imperial Bank can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Money Center Banks industry are lowering. It can presents Canadian Imperial Bank 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.
Increasing wage structure of Canadian Imperial Bank
– 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 Canadian Imperial Bank.
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. Canadian Imperial Bank needs to understand the core reasons impacting the Money Center Banks industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Canadian Imperial Bank 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.
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 Canadian Imperial Bank.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Canadian Imperial Bank 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.
Environmental challenges
– Canadian Imperial Bank 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. Canadian Imperial Bank can take advantage of this fund but it will also bring new competitors in the Money Center Banks industry.
Shortening product life cycle
– it is one of the major threat that Canadian Imperial Bank is facing in Money Center Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Canadian Imperial Bank 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.
Weighted SWOT Analysis of Canadian Imperial Bank Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Canadian Imperial Bank 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 Canadian Imperial Bank 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 Canadian Imperial Bank 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 Canadian Imperial Bank 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 Canadian Imperial Bank needs to make to build a sustainable competitive advantage.