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 – geopolitical disruptions, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing energy prices,
technology disruption, increasing household debt because of falling income levels, 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 -
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.
Superior customer experience
– The customer experience strategy of Royal Bank Of Canada in S&Ls/Savings Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Innovation driven organization
– Royal Bank Of Canada is one of the most innovative firm in S&Ls/Savings Banks sector.
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.
Analytics focus
– Royal Bank Of Canada 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 S&Ls/Savings 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 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.
High switching costs
– The high switching costs that Royal Bank Of Canada 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.
Sustainable margins compare to other players in S&Ls/Savings Banks industry
– Royal Bank Of Canada has clearly differentiated products in the market place. This has enabled Royal Bank Of Canada to fetch slight price premium compare to the competitors in the S&Ls/Savings Banks industry. The sustainable margins have also helped Royal Bank Of Canada to invest into research and development (R&D) and innovation.
Training and development
– Royal Bank Of Canada 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.
Learning organization
- Royal Bank Of Canada 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 Royal Bank Of Canada is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Royal Bank Of Canada emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
Skills based hiring in S&Ls/Savings Banks industry
– The stress on hiring functional specialists at Royal Bank Of Canada 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.
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 operating costs
– Compare to the competitors, Royal Bank Of Canada has high operating costs in the S&Ls/Savings Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Royal Bank Of Canada lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Royal Bank Of Canada 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 S&Ls/Savings Banks industry using digital technology.
Employees’ less understanding of Royal Bank Of Canada strategy
– From the outside it seems that the employees of Royal Bank Of Canada 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.
High cash cycle compare to competitors
Royal Bank Of Canada has a high cash cycle compare to other players in the S&Ls/Savings 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 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.
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.
Better consumer reach
– The expansion of the 5G network will help Royal Bank Of Canada to increase its market reach. Royal Bank Of Canada 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.
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.
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.
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.
Buying journey improvements
– Royal Bank Of Canada can improve the customer journey of consumers in the S&Ls/Savings 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Royal Bank Of Canada 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.
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.
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.
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 Royal Bank Of Canada 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.
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.
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 wage structure of Royal Bank Of Canada
– 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 Royal Bank Of Canada.
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.
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.
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 acceleration in Forth Industrial Revolution
– Royal Bank Of Canada has witnessed rapid integration of technology during Covid-19 in the S&Ls/Savings Banks industry. As one of the leading players in the industry, Royal Bank Of Canada needs to keep up with the evolution of technology in the S&Ls/Savings 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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Royal Bank Of Canada is facing in S&Ls/Savings Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Royal Bank Of Canada 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 S&Ls/Savings Banks industry.
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.
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.
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.
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. Royal Bank Of Canada 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 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.
