SkandiaBanken Case Study: 1. Analyse SkandiaBanken using the competitive forces and value chain models. 2. What is SkandiaBankens business model and business strategy? How do information systems support this strategy?

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The following is an analysis of SkandiaBanken using these forces:

Risk of entry by potential competitors:  Entry of new players increases the industry capacity leading to competition for market share. Skandiabanken has managed to mitigate risk of new entrants by erecting barriers to entry such as

  • Enforcing brand loyalty in their customers through their good service. This is seen by its ability to win the “Bank of the year” award three times in a row thus being the only bank to have managed the feat in the history of the competition.
  • Attaining Absolute cost advantage which is defined as the superiority gained by an organisation when it can provide the same value as its competitors though at a lower price. This the bank has done through innovation by innovations such as the telephone banking, internet banking and a diverse product envelope.

Rivalry among current competitors: Rivalry refers to the competitive struggle for market share between firms in an industry. SkandiaBanken has managed to mitigate against this through:

  • Going into a business that does not have many other competitors. SkandiaBanken was the first bank in Sweden of its kind, that is, “branchless”.
  • Regional expansion as is evidenced by opening another bank in Norway and planned expansion into Denmark.
  • Rapid Growth Rate of the bank

Bargaining Power of Buyers: this is the ability of the organisations customers to bargain down the price of services or ability of the customer to drive up operating costs by demanding better quality and services. SkandiaBanken was the first branchless bank which means that customers had no other similar organisations to compare it to. This lessened their bargaining power.

Bargaining Power of Suppliers:  This refers the potential for suppliers to increase prices of inputs. SkandiaBanken outsourced non value adding systems thus ensuring that their suppliers do not have the advantage of providing high leverage services. 

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Threat of Substitute products: Substitute products refer to the products having ability of satisfying customer’s needs effectively. By constantly upgrading their services, SkandiaBanken ensured that they differentiated their products.

Analysing SkandiaBanken according to the value chain:

Primary activities

These are activities that are directly concerned with creating and delivering a product. These are the following:

  • Inbound logistics: This refers to receiving, storing and disseminating inputs. In the case of SkandiaBanken the inputs are the raw data pertaining to all activities in the organisation. Examples are customer information and customer suggestions.

  • Operations:  This refers to transforming ...

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