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 - – wage bills are increasing, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing commodity prices, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, 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 -
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.
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.
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.
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.
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.
Ability to lead change in Organizational Development field
– Prudential Rebuilding is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Prudential Rebuilding in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Strong track record of project management
– Prudential Rebuilding is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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 -
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.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Prudential Rebuilding supply chain. Even after few cautionary changes mentioned in the HBR case study - Prudential UK: Rebuilding a Mighty Business, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Prudential Rebuilding vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Prudential Rebuilding has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Prudential UK: Rebuilding a Mighty Business should strive to include more intangible value offerings along with its core products and services.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Prudential UK: Rebuilding a Mighty Business, is just above the industry average. Prudential Rebuilding needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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.
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.
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.
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.
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.
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.
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.
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.
Buying journey improvements
– Prudential Rebuilding can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Prudential UK: Rebuilding a Mighty Business suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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 .
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.
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.
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.
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.
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.
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.
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.