Analysis Of The Strategic Management Of Canadian Imperial Bank Of Commerce (Cibc)
Weakness are the areas where CIBC can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning. There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market. Not highly successful at integrating firms with different work culture. As mentioned earlier even though CIBC is successful at integrating small companies it has its share of failure to merge firms that have different work culture. Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of CIBCNot very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that CIBC is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel. The profitability ratio and Net Contribution % of CIBC are below the industry average. Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, CIBC needs to put more money in technology to integrate the processes across the board.
Right now the investment in technologies is not at par with the vision of the company. The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. CIBC has to build internal feedback mechanism directly from sales team on ground to counter these challenges. Opportunities for CIBC – External Strategic FactorsStable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for CIBC in other product categories. Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided CIBC an opportunity to enter a new emerging market. Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines. Decreasing cost of transportation because of lower shipping prices can also bring down the cost of CIBC’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share. The new technology provides an opportunity to CIBC to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as CIBC to increase its profitability. New trends in the consumer behavior can open up new market for the CIBC. It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too. New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for CIBC. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
