The National Bank of Canada has decided to cut “several hundred” jobs in response to the contracting Canadian economy. This is a clear-cut example of a firm responding to external threats. In class recently, we discussed the SWOT method, wherein we analyzed the strengths, weaknesses, opportunities and threats of businesses, if we applied this approach to the National Bank we can see what happens when a threat turns into a reality.
The CEO, Luis Vachon, stated that the decision was also made as a result of “fierce competition”. This gives us further proof that without effective management of threats, these threats can snowball into large problems. SWOT analysis only gives a firm an assessment of their advantages and vulnerabilities, and certainly the National Bank of Canada was aware of these threats prior to their affect, regardless, they’re responsible for making sound decisions based on the information provided in the SWOT.
Obviously businesses cannot always be successful, oftentimes industries change and consumer interests change which can result in well-managed companies being pushed out of the market. Whether or not this is the case with National Bank, or it is simply a matter of company mismanagement; it’s hard to tell. In any case, going forward The National Bank will have to reassess their position in the market, and hopefully find a solution that will mitigate future losses.
Article Referenced: http://www.cbc.ca/news/business/national-bank-cutting-several-hundred-jobs-ceo-says-1.3254036
