New York Life and Immediate Annuities SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of New York Life and Immediate Annuities
By positioning Immediate Annuities as "guaranteed lifetime income," New York Life has built itself a $1.4 billion per year business by 2009. However, to make Immediate Annuities a mainstream financial product for retirees, New York Life must understand why many retirees are reluctant to buy them and many agents are reluctant to sell them.
Swot Analysis of "New York Life and Immediate Annuities" written by Julio J. Rotemberg, John T. Gourville includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Annuities Retirees facing as an external strategic factors. Some of the topics covered in New York Life and Immediate Annuities case study are - Strategic Management Strategies, Financial management, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the New York Life and Immediate Annuities casestudy better are - – challanges to central banks by blockchain based private currencies, technology disruption, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of New York Life and Immediate Annuities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in New York Life and Immediate Annuities case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Annuities Retirees, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Annuities Retirees 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 New York Life and Immediate Annuities can be done for the following purposes –
1. Strategic planning using facts provided in New York Life and Immediate Annuities case study
2. Improving business portfolio management of Annuities Retirees
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Annuities Retirees
Strengths New York Life and Immediate Annuities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Annuities Retirees in New York Life and Immediate Annuities Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the New York Life and Immediate Annuities 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Annuities Retirees digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Annuities Retirees 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.
Sustainable margins compare to other players in Sales & Marketing industry
– New York Life and Immediate Annuities firm has clearly differentiated products in the market place. This has enabled Annuities Retirees to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Annuities Retirees to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Annuities Retirees 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 New York Life and Immediate Annuities - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Annuities Retirees has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Annuities Retirees to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Annuities Retirees has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in New York Life and Immediate Annuities 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.
High switching costs
– The high switching costs that Annuities Retirees 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.
Ability to lead change in Sales & Marketing field
– Annuities Retirees 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 Annuities Retirees in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Annuities Retirees is one of the most innovative firm in sector. Manager in New York Life and Immediate Annuities 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
– Annuities Retirees has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Annuities Retirees 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.
Learning organization
- Annuities Retirees 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 Annuities Retirees is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in New York Life and Immediate Annuities Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Annuities Retirees is one of the leading recruiters in the industry. Managers in the New York Life and Immediate Annuities are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses New York Life and Immediate Annuities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New York Life and Immediate Annuities are -
High operating costs
– Compare to the competitors, firm in the HBR case study New York Life and Immediate Annuities has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Annuities Retirees 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study New York Life and Immediate Annuities, is just above the industry average. Annuities Retirees 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.
Lack of clear differentiation of Annuities Retirees products
– To increase the profitability and margins on the products, Annuities Retirees needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Annuities Retirees 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. Annuities Retirees 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.
Need for greater diversity
– Annuities Retirees 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.
Aligning sales with marketing
– It come across in the case study New York Life and Immediate Annuities that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case New York Life and Immediate Annuities can leverage the sales team experience to cultivate customer relationships as Annuities Retirees is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study New York Life and Immediate Annuities, it seems that the employees of Annuities Retirees 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.
High cash cycle compare to competitors
Annuities Retirees 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 New York Life and Immediate Annuities 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 Annuities Retirees has relatively successful track record of launching new products.
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 Annuities Retirees supply chain. Even after few cautionary changes mentioned in the HBR case study - New York Life and Immediate Annuities, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Annuities Retirees vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Annuities Retirees 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.
Opportunities New York Life and Immediate Annuities | 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 New York Life and Immediate Annuities are -
Creating value in data economy
– The success of analytics program of Annuities Retirees has opened avenues for new revenue streams for the organization in the industry. This can help Annuities Retirees to build a more holistic ecosystem as suggested in the New York Life and Immediate Annuities case study. Annuities Retirees can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Annuities Retirees can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Annuities Retirees in the consumer business. Now Annuities Retirees can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Annuities Retirees 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 Sales & Marketing segment.
Learning at scale
– Online learning technologies has now opened space for Annuities Retirees 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.
Manufacturing automation
– Annuities Retirees can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Buying journey improvements
– Annuities Retirees can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. New York Life and Immediate Annuities 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Annuities Retirees in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Annuities Retirees to increase its market reach. Annuities Retirees 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Annuities Retirees 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.
Loyalty marketing
– Annuities Retirees 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Annuities Retirees is facing challenges because of the dominance of functional experts in the organization. New York Life and Immediate Annuities 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 Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Annuities Retirees 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. Annuities Retirees 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.
Threats New York Life and Immediate Annuities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study New York Life and Immediate Annuities are -
Shortening product life cycle
– it is one of the major threat that Annuities Retirees is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Annuities Retirees 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 New York Life and Immediate Annuities .
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 Annuities Retirees in the Sales & Marketing industry. The Sales & Marketing 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.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Annuities Retirees can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Annuities Retirees in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Annuities Retirees
– 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 Annuities Retirees.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study New York Life and Immediate Annuities, Annuities Retirees may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Annuities Retirees with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Annuities Retirees has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Annuities Retirees needs to keep up with the evolution of technology in the Sales & Marketing 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.
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 Annuities Retirees.
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. Annuities Retirees needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of New York Life and Immediate Annuities 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 New York Life and Immediate Annuities 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 New York Life and Immediate Annuities 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 New York Life and Immediate Annuities 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 New York Life and Immediate Annuities 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 Annuities Retirees needs to make to build a sustainable competitive advantage.