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 – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, there is backlash against globalization, wage bills are increasing, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, technology disruption, 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 -
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.
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.
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.
Organizational Resilience of Canadian Imperial Bank
– The covid-19 pandemic has put organizational resilience at the centre of everthing Canadian Imperial Bank does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Sustainable margins compare to other players in Money Center Banks industry
– Canadian Imperial Bank has clearly differentiated products in the market place. This has enabled Canadian Imperial Bank to fetch slight price premium compare to the competitors in the Money Center Banks industry. The sustainable margins have also helped Canadian Imperial Bank to invest into research and development (R&D) and innovation.
Training and development
– Canadian Imperial Bank 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.
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.
Superior customer experience
– The customer experience strategy of Canadian Imperial Bank in Money Center Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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 -
No frontier risks strategy
– From the 10K / annual statement of Canadian Imperial Bank, 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.
Capital Spending Reduction
– Even during the low interest decade, Canadian Imperial Bank 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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Canadian Imperial Bank is slow explore the new channels of communication. These new channels of communication can help Canadian Imperial Bank 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.
Skills based hiring in Money Center Banks industry
– The stress on hiring functional specialists at Canadian Imperial Bank 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.
High operating costs
– Compare to the competitors, Canadian Imperial Bank has high operating costs in the Money Center Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Canadian Imperial Bank lucrative customers.
Lack of clear differentiation of Canadian Imperial Bank products
– To increase the profitability and margins on the products, Canadian Imperial Bank needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Canadian Imperial Bank 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.
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.
Compensation and incentives
– The revenue per employee of Canadian Imperial Bank 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.
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 -
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Canadian Imperial Bank 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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Canadian Imperial Bank 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, Canadian Imperial Bank can use these opportunities to build new business models that can help the communities that Canadian Imperial Bank operates in. Secondly it can use opportunities from government spending in Money Center Banks sector.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Canadian Imperial Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
Stagnating economy with rate increase
– Canadian Imperial Bank 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.
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.
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.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Canadian Imperial Bank 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.
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.
Regulatory challenges
– Canadian Imperial Bank 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 Money Center Banks industry regulations.
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.