This study aims to underscore the technical description of how important performance models (IPA) and strengths, weaknesses, opportunities and threats (SWOT) analysis can be combined to create effective market driving strategies for Islamic banks.
This study conducted a survey focusing on 1,208 active bank customers in West Sumatra, Indonesia. The empirical analyses utilize SWOT based on importance-performance map analysis to capture customer preferences for Islamic and conventional banks.
The empirical analysis highlights that SWOT analysis in conjunction with IPA is a highly effective and appropriate method for developing a market-driving strategy for Islamic banks. It can be carried out without a complex analytical framework and conducted internally by banks solely by relying on customer surveys. Although IPA is often overlooked, using this tool in conjunction with SWOT can enhance its effectiveness in developing behavior-focused marketing strategies. The empirical findings reveal that Islamic banks require a growth-oriented turnaround strategy to overcome their most crucial problems in Islamic banks.
This study proposes a solution to assist managers in formulating a market-driving strategy for the expansion of Islamic banks, taking consumer behavior into account. This emphasizes the need to move away from a firm-oriented strategy and adapt to a rapidly evolving environment. Islamic banks face intense competition in the financial market, making it challenging to establish a strong competitive edge despite their marketable brand image in the retail banking industry.
This study develops an effective technique for mapping consumer preferences and planning market-driving strategies for Islamic Banks using IPA-based SWOT. This technique is rarely used in previous studies, so the results can provide novelty, especially in strategies to increase competitiveness for Islamic banking in the retail banking industry.
