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 inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing energy prices, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, 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 -
Highly skilled collaborators
– Prudential Rebuilding has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Prudential UK: Rebuilding a Mighty Business HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Prudential Rebuilding has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Prudential UK: Rebuilding a Mighty Business - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Sustainable margins compare to other players in Organizational Development industry
– Prudential UK: Rebuilding a Mighty Business firm has clearly differentiated products in the market place. This has enabled Prudential Rebuilding to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Prudential Rebuilding to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Prudential Rebuilding in the sector have low bargaining power. Prudential UK: Rebuilding a Mighty Business has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Prudential Rebuilding to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Prudential Rebuilding
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Prudential Rebuilding does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Prudential Rebuilding digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Prudential Rebuilding has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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.
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.
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 -
No frontier risks strategy
– After analyzing the HBR case study Prudential UK: Rebuilding a Mighty Business, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Prudential Rebuilding has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Prudential Rebuilding even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
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.
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 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.
Increasing silos among functional specialists
– The organizational structure of Prudential Rebuilding is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Prudential Rebuilding needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Prudential Rebuilding to focus more on services rather than just following the product oriented approach.
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.
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.
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.
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.
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 -
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Prudential Rebuilding can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Prudential Rebuilding can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Prudential Rebuilding can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Prudential Rebuilding can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Prudential Rebuilding can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Prudential UK: Rebuilding a Mighty Business, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Prudential Rebuilding to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Prudential Rebuilding to hire the very best people irrespective of their geographical location.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Prudential Rebuilding can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Prudential Rebuilding can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Prudential UK: Rebuilding a Mighty Business .
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.
Technology acceleration in Forth Industrial Revolution
– Prudential Rebuilding has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Prudential Rebuilding needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Prudential Rebuilding.
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.
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 level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Prudential Rebuilding needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Prudential Rebuilding in the Organizational Development sector and impact the bottomline of the organization.
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.
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.
