Royal Bank Of Canada (RY) SWOT Analysis / TOWS Matrix / MBA Resources
S&Ls/Savings Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Royal Bank Of Canada (United States)
Based on various researches at Oak Spring University , Royal Bank Of Canada is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, geopolitical disruptions, wage bills are increasing, increasing commodity prices,
increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Royal Bank Of Canada
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Royal Bank Of Canada can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Royal Bank Of Canada, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Royal Bank Of Canada 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 Royal Bank Of Canada can be done for the following purposes –
1. Strategic planning of Royal Bank Of Canada
2. Improving business portfolio management of Royal Bank Of Canada
3. Assessing feasibility of the new initiative in United States
4. Making a S&Ls/Savings Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Royal Bank Of Canada
Strengths of Royal Bank Of Canada | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Royal Bank Of Canada are -
Innovation driven organization
– Royal Bank Of Canada is one of the most innovative firm in S&Ls/Savings Banks sector.
Low bargaining power of suppliers
– Suppliers of Royal Bank Of Canada in the Financial sector have low bargaining power. Royal Bank Of Canada has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Royal Bank Of Canada to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in S&Ls/Savings Banks industry
- digital transformation varies from industry to industry. For Royal Bank Of Canada digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Royal Bank Of Canada 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.
Strong track record of project management in the S&Ls/Savings Banks industry
– Royal Bank Of Canada is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Royal Bank Of Canada has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive S&Ls/Savings Banks industry. Secondly the value chain collaborators of Royal Bank Of Canada have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Royal Bank Of Canada 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 brand equity
– Royal Bank Of Canada has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Royal Bank Of Canada to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Royal Bank Of Canada has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Royal Bank Of Canada staying ahead in the S&Ls/Savings Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Royal Bank Of Canada comprises – understanding the underlying the factors in the S&Ls/Savings Banks industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Royal Bank Of Canada is present in almost all the verticals within the S&Ls/Savings Banks industry. This has provided Royal Bank Of Canada 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.
Organizational Resilience of Royal Bank Of Canada
– The covid-19 pandemic has put organizational resilience at the centre of everthing Royal Bank Of Canada does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Royal Bank Of Canada is one of the leading players in the S&Ls/Savings 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.
Weaknesses of Royal Bank Of Canada | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Royal Bank Of Canada are -
Workers concerns about automation
– As automation is fast increasing in the S&Ls/Savings Banks industry, Royal Bank Of Canada 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.
Lack of clear differentiation of Royal Bank Of Canada products
– To increase the profitability and margins on the products, Royal Bank Of Canada needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Royal Bank Of Canada, it seems that company is thinking out the frontier risks that can impact S&Ls/Savings 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.
Interest costs
– Compare to the competition, Royal Bank Of Canada 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.
Increasing silos among functional specialists
– The organizational structure of Royal Bank Of Canada is dominated by functional specialists. It is not different from other players in the S&Ls/Savings Banks industry, but Royal Bank Of Canada needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Royal Bank Of Canada to focus more on services in the S&Ls/Savings Banks industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of United States, Royal Bank Of Canada needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Royal Bank Of Canada, in the dynamic environment of S&Ls/Savings Banks industry it has struggled to respond to the nimble upstart competition. Royal Bank Of Canada has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Royal Bank Of Canada ‘s star products
– The top 2 products and services of Royal Bank Of Canada still accounts for major business revenue. This dependence on star products in S&Ls/Savings Banks industry has resulted into insufficient focus on developing new products, even though Royal Bank Of Canada has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Royal Bank Of Canada needs to have more collaboration between its sales team and marketing team. Sales professionals in the S&Ls/Savings Banks industry have deep experience in developing customer relationships. Marketing department at Royal Bank Of Canada can leverage the sales team experience to cultivate customer relationships as Royal Bank Of Canada is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Royal Bank Of Canada is one of the leading players in the S&Ls/Savings Banks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the S&Ls/Savings Banks industry in last five years.
Compensation and incentives
– The revenue per employee of Royal Bank Of Canada is just above the S&Ls/Savings Banks industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Royal Bank Of Canada Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Royal Bank Of Canada are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in S&Ls/Savings Banks industry, but it has also influenced the consumer preferences. Royal Bank Of Canada 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 Royal Bank Of Canada 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 Royal Bank Of Canada to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Royal Bank Of Canada can use these opportunities to build new business models that can help the communities that Royal Bank Of Canada operates in. Secondly it can use opportunities from government spending in S&Ls/Savings Banks sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Royal Bank Of Canada 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 Royal Bank Of Canada to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Royal Bank Of Canada 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
– Royal Bank Of Canada has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in S&Ls/Savings Banks sector. This continuous investment in analytics has enabled Royal Bank Of Canada to build a competitive advantage using analytics. The analytics driven competitive advantage can help Royal Bank Of Canada to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Royal Bank Of Canada can develop new processes and procedures in S&Ls/Savings Banks industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Royal Bank Of Canada can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Royal Bank Of Canada in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the S&Ls/Savings Banks industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the S&Ls/Savings Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Royal Bank Of Canada 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. Royal Bank Of Canada 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.
Creating value in data economy
– The success of analytics program of Royal Bank Of Canada has opened avenues for new revenue streams for the organization in S&Ls/Savings Banks industry. This can help Royal Bank Of Canada to build a more holistic ecosystem for Royal Bank Of Canada products in the S&Ls/Savings Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Royal Bank Of Canada is facing challenges because of the dominance of functional experts in the organization. Royal Bank Of Canada can utilize new technology in the field of S&Ls/Savings Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in S&Ls/Savings Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Royal Bank Of Canada in the S&Ls/Savings Banks industry. Now Royal Bank Of Canada can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Royal Bank Of Canada External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Royal Bank Of Canada are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Royal Bank Of Canada 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 Royal Bank Of Canada prominent markets.
Easy access to finance
– Easy access to finance in S&Ls/Savings Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Royal Bank Of Canada can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Royal Bank Of Canada in S&Ls/Savings Banks industry. The S&Ls/Savings 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Royal Bank Of Canada may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of S&Ls/Savings Banks sector.
Regulatory challenges
– Royal Bank Of Canada needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the S&Ls/Savings Banks industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Royal Bank Of Canada in the S&Ls/Savings Banks sector and impact the bottomline of the organization.
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. Royal Bank Of Canada needs to understand the core reasons impacting the S&Ls/Savings Banks industry. This will help it in building a better workplace.
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 Royal Bank Of Canada.
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
– Royal Bank Of Canada 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. Royal Bank Of Canada can take advantage of this fund but it will also bring new competitors in the S&Ls/Savings Banks industry.
Consumer confidence and its impact on Royal Bank Of Canada demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in S&Ls/Savings Banks industry and other sectors.
High dependence on third party suppliers
– Royal Bank Of Canada 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.
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.
Weighted SWOT Analysis of Royal Bank Of Canada Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Royal Bank Of Canada 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 Royal Bank Of Canada 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 Royal Bank Of Canada 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 Royal Bank Of Canada 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 Royal Bank Of Canada needs to make to build a sustainable competitive advantage.