Prudential UK: Rebuilding a Mighty Business SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Prudential UK: Rebuilding a Mighty Business
In the mid-1980s, Prudential completely dominated the UK insurance market. Fifteen years later it was in grave danger of becoming irrelevant, and then things got worse with the post 9/11 collapse of stock markets and the ensuing downfall of its major product ("with profits" insurance). Led by a new CEO, Mark Wood, Prudential UK's management team embarked on a four-year rebuilding journey. The company was fragmented and had lost its direction. The product mix and distribution channels needed to be overhauled, as did the customer service systems and philosophies. The company had zero partnerships. And the corporate culture resembled that of a "country club". Yet, being in the insurance sector, the company had to continue projecting a reassuring image. This severely constrained the possibilities of making the case for change. Nevertheless, in the space of four years, Mark Wood and his team refocused the company, restored its pride and brought it back among the contenders. It emerged with solid assets - outstanding service, genuine innovation, funds for growth and improved relations with clients, IFAs and the regulator. It created options for itself. Learning objectives: The case focuses on the managerial and leadership aspects of a large-scale restructuring. It features some classic turnaround aspects, but also some unusual ones: 1) the rotating appointment of a "quartermaster" to drive performance in each quarter; 2) a leadership story that projects employees forward 1000 days; 3) regular periods of reflection time as a team; 4) the development of an internal business transformation capability, which involved up to 15 per cent of the workforce working off-line on change projects full-time. The case also raises issues around institutionalizing change.
Swot Analysis of "Prudential UK: Rebuilding a Mighty Business" written by Jean-Francois Manzoni, Jean-Louis Barsoux includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Prudential Rebuilding facing as an external strategic factors. Some of the topics covered in Prudential UK: Rebuilding a Mighty Business case study are - Strategic Management Strategies, Crisis management, Leadership, Strategy and Organizational Development.
Some of the macro environment factors that can be used to understand the Prudential UK: Rebuilding a Mighty Business casestudy better are - – increasing household debt because of falling income levels, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies,
technology disruption, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Prudential UK: Rebuilding a Mighty Business
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Prudential UK: Rebuilding a Mighty Business case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Prudential Rebuilding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Prudential Rebuilding operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Prudential UK: Rebuilding a Mighty Business can be done for the following purposes –
1. Strategic planning using facts provided in Prudential UK: Rebuilding a Mighty Business case study
2. Improving business portfolio management of Prudential Rebuilding
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Prudential Rebuilding
Strengths Prudential UK: Rebuilding a Mighty Business | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Prudential Rebuilding in Prudential UK: Rebuilding a Mighty Business Harvard Business Review case study are -
Analytics focus
– Prudential Rebuilding is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jean-Francois Manzoni, Jean-Louis Barsoux can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Prudential Rebuilding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Prudential Rebuilding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Prudential Rebuilding is one of the most innovative firm in sector. Manager in Prudential UK: Rebuilding a Mighty Business Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Prudential Rebuilding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Prudential Rebuilding has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Prudential Rebuilding has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Prudential UK: Rebuilding a Mighty Business Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Prudential Rebuilding in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Prudential Rebuilding is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Prudential Rebuilding is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Prudential UK: Rebuilding a Mighty Business Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Prudential UK: Rebuilding a Mighty Business Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Prudential Rebuilding is one of the leading recruiters in the industry. Managers in the Prudential UK: Rebuilding a Mighty Business are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Prudential Rebuilding has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Prudential Rebuilding are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Prudential Rebuilding is present in almost all the verticals within the industry. This has provided firm in Prudential UK: Rebuilding a Mighty Business case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Prudential UK: Rebuilding a Mighty Business | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Prudential UK: Rebuilding a Mighty Business are -
Interest costs
– Compare to the competition, Prudential Rebuilding has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Prudential Rebuilding has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Prudential UK: Rebuilding a Mighty Business, it seems that the employees of Prudential Rebuilding don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Prudential Rebuilding, firm in the HBR case study Prudential UK: Rebuilding a Mighty Business needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Prudential Rebuilding has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Prudential UK: Rebuilding a Mighty Business HBR case study mentions - Prudential Rebuilding takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Prudential Rebuilding has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Prudential UK: Rebuilding a Mighty Business HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Prudential Rebuilding has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Prudential Rebuilding is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Prudential UK: Rebuilding a Mighty Business can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Prudential UK: Rebuilding a Mighty Business, in the dynamic environment Prudential Rebuilding has struggled to respond to the nimble upstart competition. Prudential Rebuilding has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Prudential Rebuilding has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities Prudential UK: Rebuilding a Mighty Business | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Prudential UK: Rebuilding a Mighty Business are -
Developing new processes and practices
– Prudential Rebuilding can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Prudential Rebuilding can use these opportunities to build new business models that can help the communities that Prudential Rebuilding operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Prudential Rebuilding in the consumer business. Now Prudential Rebuilding can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Prudential Rebuilding has opened avenues for new revenue streams for the organization in the industry. This can help Prudential Rebuilding to build a more holistic ecosystem as suggested in the Prudential UK: Rebuilding a Mighty Business case study. Prudential Rebuilding can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Prudential Rebuilding to increase its market reach. Prudential Rebuilding will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Prudential Rebuilding has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Prudential Rebuilding in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Prudential Rebuilding to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Prudential Rebuilding can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Prudential Rebuilding to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Prudential Rebuilding can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Prudential Rebuilding can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Prudential Rebuilding is facing challenges because of the dominance of functional experts in the organization. Prudential UK: Rebuilding a Mighty Business case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Prudential UK: Rebuilding a Mighty Business External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Prudential UK: Rebuilding a Mighty Business are -
Environmental challenges
– Prudential Rebuilding needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Prudential Rebuilding can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Increasing wage structure of Prudential Rebuilding
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Prudential Rebuilding.
High dependence on third party suppliers
– Prudential Rebuilding high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Prudential Rebuilding can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Prudential Rebuilding can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Prudential Rebuilding business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Prudential Rebuilding demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Regulatory challenges
– Prudential Rebuilding needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Prudential Rebuilding in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Prudential Rebuilding is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Prudential Rebuilding with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Prudential UK: Rebuilding a Mighty Business Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Prudential UK: Rebuilding a Mighty Business needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Prudential UK: Rebuilding a Mighty Business is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Prudential UK: Rebuilding a Mighty Business is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Prudential UK: Rebuilding a Mighty Business is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Prudential Rebuilding needs to make to build a sustainable competitive advantage.