Previously, we evaluated one of the leading global financial institutions, Wells Fargo. This time we will look at the SWOT analysis of Rabobank – a Dutch multinational banking and financial services company situated in Utrecht, Netherlands.
In terms of Tier 1 capital, this organization is one of the top 50 financial institutions in the world. As of December 2014, the balance sheet totalled € 6.81 billion and net income was € 1.8 billion. Global Finance ranks Rabobank 25th in the Rabobank’s “World’s Safest Banks” survey.
One of the reasons why the Rabobank organization grew so large and maintained its position in this highly competitive sector is its marketing efforts. Marketing is evolving as the world moves online, so if you want to learn more about marketing and its digital aspect, check out IIDE Free Digital Marketing Masterclass by Karan Shah the founder and CEO of IIDE.
Before we perform a detailed SWOT analysis of Rabobank for you in this blog, let’s first have a brief understanding of the Rabobank – International Netherlands Group.
This bank is rooted in the idea of Friedrich Wilhelm Raiffeisen, the founder of the Cooperative Movement of the Cooperative, which founded Germany’s first Agricultural Bank Germany in 1864. As a local mayor, he faced terrible poverty for farmers and their families. He tried to mitigate this misery with the help of charity but realized that he was likely to be self-employed in the long run and 1864 turned his charity foundation into a peasant bank. Since then Rabobank expanded its international business in 1980 as part of its mission to fund global agriculture.
|Founder||Friedrich Wilhelm Raiffeisen|
|No. of Employees||41,861|
|Annual Revenue||€12.020 Billion (2018)|
|Net Income/ Profit||€3.004 Billion (2018)|
Products & Services by Rabobank
- Retail Banking services
- Capital Management
- Real Estate
Competitors of Rabobank
Rabobank brings huge competition for itself, as it provides services in the whole world. Below mentioned are some of the competitors for Rabobank:
- Bank Of America
- ABN AMRO
Now that we already know the company’s core business, let’s dive into the SWOT Analysis of Rabobank.
SWOT Analysis of Rabobank
SWOT analysis of Rabobank is an examination of the company’s strengths, weaknesses, opportunities, and threats. This allows the organisation to understand its market position, as well as what areas need to be addressed and where it can shine. It also aids the corporation in strategizing its business framework and elements affecting its growth.
To better understand the SWOT analysis of Rabobank, refer to the infographics below:
Below is a step-by-step detailed guide to help you with the SWOT analysis of Rabobank.
Strengths of Rabobank
Rabobank, being one of the industry’s leading corporations, has several advantages that enable it to prosper in the marketplace. These advantages not only assist it in retaining market share in existing areas but also in expanding into new ones.
- Farmer’s Bank: Rabobank’s founder aim was to provide enterprising farmers with loans. This model found a lot of interest in the Netherlands at the end of the 19th century and remains.
- Merger & Acquisition: On May 1, 2007, Rabobank completed the acquisition of Mid-State Bank & Trust, which permits Rabobank to extend its benefits to the Central Coast region of California, United States. In 2010, it also obtained Pacific State Bank, extending into the Central Valley of California.
- Overseas Expansion: Rabobank is always ahead in terms of overseas expansion to fulfil its mission to finance the global agricultural sector. It established a joint-venture with several banks of different countries like Indonesia, Australia, New Zealand etc. and many more.
- Social Media: Huge organisations are leveraging such tools to stay relevant and are seeking specialists for the same, so if you are interested in the field, check out our social media marketing course to get started.
- Extensive Network: The bank has more than 40,000 employees at 700+ branches in the Netherlands & elsewhere worldwide, making Rabobank the 23rd largest bank and the 30 largest financial institutions in the world.
- Market Position: Rabobank is traditionally a farmers’ bank and it nevertheless carries an 85% to 90% market share in the agricultural sector in the Netherlands. Throughout the years, the firm has also begun targeting small and medium-sized companies.
Weakness of Rabobank
Weakness is the area where Rabobank can improve upon by building strategies. Below mentioned are the weakness of Rabobank:
- Research and Development: Despite spending more than the industry average on research & development, Rabobank spends far less than preferred industry companies who have gained a major edge as a result of their unique products.
- Integration: Rabobank’s current structure and culture have failed concerning various mergers aimed at vertical integration.
- Organization Structure: Organization structure is only compatible with the present business model thus limiting expansion in adjacent product segments.
- Low Work Morale: The performance appraisal is not in a systematic manner. People are usually not evaluated for their performance. Employee morale suffers as a result, as do growth opportunities.
- Low Liquidity: The company has low levels of current assets compared to current liabilities, and this can create liquidity problems for it in operations.
- Rented Property: Rabobank has a considerable amount of property that is rented rather than purchased. It needs to pay a lot of rent on these, which adds to its expenses.
Opportunities for Rabobank
Opportunities are external factors that can provide an organization with a competitive advantage. Some opportunities that Rabobank can use for further expansion are
- Developments in Artificial Intelligence: Rabobank can use developments in artificial intelligence to better predict consumer demand, cater to niche segments, and make better recommendation engines.
- Internet: The number of people who use the internet has increased all over the world. And Rabobank has started taking advantage of this opportunity to expand its online presence by interacting with its customers via e-commerce. So, if you also want to learn, check out our e-commerce management course & create your e-commerce website.
- Globalization: Rabobank Banking is not limited to its own country as a result of increased globalization. It can expand its operations to other countries, allowing it to enter these markets and take advantage of the opportunities that exist.
- Population: The population has been increasing and will continue to do so in the coming years. This is beneficial to Rabobank since it increases the number of potential consumers it can target.
- Tax Policy and Subsidy: The governments’ reduction in tax rate and subsidy announcement on the sale of environmentally friendly goods is beneficial for Rabobank as a lower amount would be expensed out as a tax and can focus on these environmentally friendly products to make use of this opportunity.
Threats to Rabobank
Threats are macro-environment factors and developments that can hinder the business model. Some of the threats which can derail Rabobank Group are
- Suppliers: Supplier bargaining power has increased over time as the number of suppliers has decreased. This implies that Rabobank’s input costs could rise.
- New Entrants: There have been numerous players who have entered the market and are gaining market share by acquiring the market share of existing companies. This poses a risk to Rabobank because it may lose customers to these new entrants.
- Technological Developments by Competitors: Customers attracted to new inventions by a few competitors within the industry constitute a threat to Rabobank, as customers drawn to this new technology may be lost to competitors, reducing Rabobank’s overall market share.
- Exchange Rate: The exchange rate is constantly fluctuating, which affects a company like Rabobank, which has international sales but local suppliers.
- Volatile Market: Consumer tastes are shifting, putting pressure on businesses to constantly adapt their products to meet the needs of these customers.
This ends our elaborated SWOT analysis of Rabobank. Let us conclude our learnings below.
Rabobank is a Dutch international financial institution that provides a wide range of banking services. Meanwhile, Rabobank underwent a decade of tremendous growth, primarily by autonomous expansion, while important overseas acquisitions were also made.
Also, with an increase in users’ online presence, the company can take advantage of digital marketing opportunities to grow and stand out in this massive market. In a changing landscape where digital marketing is of utmost importance, being well versed in the field is a must for all marketing enthusiasts. If you are interested in learning more and upskilling, check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.
We hope this blog on the SWOT Analysis of Rabobank has given you a good insight into the company’s strengths, weaknesses, opportunities, and threats.
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