Redefining the AXA Brand SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Redefining the AXA Brand
The case describes how AXA, a global insurance company headquartered in Paris, France, defined and implemented its new brand in May 2008. This is exactly 3 years after CEO Henri de Castries launched the initiative "Ambition 2012" aimed at doubling revenues and tripling underlying earnings between 2004 and 2012 and turning AXA into "the preferred company" in financial protection. In order to become "preferred" among consumers; AXA needed to differentiate itself from its competitors. But, the brand attributes - including the signature "Be Life Confident" - didn't seem to be totally up to it. In 2007-2008, Claude Brunet, AXA's Chief Operating Officer, led a project to investigate and reinforce the brand. He strengthened marketing through the creation of a Group marketing department reporting to him which was responsible for strategic marketing and customer insight, offer and innovation, customer programs and quality of service, distribution, and brand and advertising. The voices of executives, customers and employees were then thoroughly analyzed. This fed the AXA Brand Spirit, a multidisciplinary task force made responsible for proposing action to the management board. The research concluded that the three main core attributes for AXA were "available", "attentive", and "reliable". The AXA Brand Spirit decided AXA ought to "continuously work to prove it is worth trusting". This meant exiting the "land of promise" and settling into a "land of proof". This would be the spirit of the new signature "redefining / standards". The new AXA brand was launched internally on May 27, 2008 with a worldwide online forum in which 55,000 employees participated. Learning objectives: Brand management is more than designing a new logo and creating a new value proposition. The case shows the importance of building emotional momentum within a service organization and using brand management as a catalyst for a deeper cultural change.
Swot Analysis of "Redefining the AXA Brand" written by Stefan Michel, Jean-Pierre Baillot includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Axa Brand facing as an external strategic factors. Some of the topics covered in Redefining the AXA Brand case study are - Strategic Management Strategies, Change management, Customer service, Customers, Motivating people, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Redefining the AXA Brand casestudy better are - – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Redefining the AXA Brand
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Redefining the AXA Brand case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Axa Brand, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Axa Brand 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 Redefining the AXA Brand can be done for the following purposes –
1. Strategic planning using facts provided in Redefining the AXA Brand case study
2. Improving business portfolio management of Axa Brand
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Axa Brand
Strengths Redefining the AXA Brand | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Axa Brand in Redefining the AXA Brand Harvard Business Review case study are -
Learning organization
- Axa Brand 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 Axa Brand is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Redefining the AXA Brand Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Axa Brand 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.
Superior customer experience
– The customer experience strategy of Axa Brand in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Axa Brand 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 Redefining the AXA Brand HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Axa Brand 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 Stefan Michel, Jean-Pierre Baillot 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Redefining the AXA Brand firm has clearly differentiated products in the market place. This has enabled Axa Brand to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Axa Brand to invest into research and development (R&D) and innovation.
Organizational Resilience of Axa Brand
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Axa Brand does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Axa Brand in the sector have low bargaining power. Redefining the AXA Brand has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Axa Brand to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Axa Brand is present in almost all the verticals within the industry. This has provided firm in Redefining the AXA Brand 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.
Effective Research and Development (R&D)
– Axa Brand 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 Redefining the AXA Brand - 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 recruit top talent
– Axa Brand is one of the leading recruiters in the industry. Managers in the Redefining the AXA Brand are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Axa Brand is one of the most innovative firm in sector. Manager in Redefining the AXA Brand Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Redefining the AXA Brand | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Redefining the AXA Brand are -
Interest costs
– Compare to the competition, Axa Brand 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.
Low market penetration in new markets
– Outside its home market of Axa Brand, firm in the HBR case study Redefining the AXA Brand needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Axa Brand 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.
Need for greater diversity
– Axa Brand 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.
Lack of clear differentiation of Axa Brand products
– To increase the profitability and margins on the products, Axa Brand needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Axa Brand is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Axa Brand needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Axa Brand to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Axa Brand 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. Axa Brand 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Redefining the AXA Brand, is just above the industry average. Axa Brand 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.
No frontier risks strategy
– After analyzing the HBR case study Redefining the AXA Brand, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
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 Axa Brand supply chain. Even after few cautionary changes mentioned in the HBR case study - Redefining the AXA Brand, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Axa Brand vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Stefan Michel, Jean-Pierre Baillot suggests that, Axa Brand is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities Redefining the AXA Brand | 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 Redefining the AXA Brand are -
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 Axa Brand in the consumer business. Now Axa Brand can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Axa Brand has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Redefining the AXA Brand - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Axa Brand to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Axa Brand 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, Redefining the AXA Brand, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Axa Brand 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Axa Brand in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Axa Brand can use these opportunities to build new business models that can help the communities that Axa Brand operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Axa Brand can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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. Axa Brand can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Axa Brand 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 Strategy & Execution segment.
Leveraging digital technologies
– Axa Brand 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Axa Brand 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 Axa Brand to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Axa Brand has opened avenues for new revenue streams for the organization in the industry. This can help Axa Brand to build a more holistic ecosystem as suggested in the Redefining the AXA Brand case study. Axa Brand can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Axa Brand 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.
Threats Redefining the AXA Brand External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Redefining the AXA Brand are -
Regulatory challenges
– Axa Brand 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 Strategy & Execution industry regulations.
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 Axa Brand business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Axa Brand with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Axa Brand
– 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 Axa Brand.
Shortening product life cycle
– it is one of the major threat that Axa Brand is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Axa Brand needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Axa Brand 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.
Consumer confidence and its impact on Axa Brand 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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Axa Brand will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Axa Brand 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 Redefining the AXA Brand .
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 Axa Brand.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Axa Brand can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Redefining the AXA Brand 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 Redefining the AXA Brand 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 Redefining the AXA Brand 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 Redefining the AXA Brand 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 Redefining the AXA Brand 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 Axa Brand needs to make to build a sustainable competitive advantage.