Nielsonlar Insurance: Replacing a Life Insurance Plan SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nielsonlar Insurance: Replacing a Life Insurance Plan
In 2003, a financial planner in Calgary started working with the owner of Oilfield Welding Limited to provide employee benefits to the owner and his staff. Initially, the owner wanted to save for retirement by reinvesting all of his surplus earnings back into the business. However, he appreciated the potential creditor-proofing of life insurance and established a small retirement savings opportunity using life insurance. When Oilfield Welding Limited hired a new group administrator, the employee benefits program was put out to bid and the business was moved. Shortly thereafter, the financial planner was notified that the life insurance he had placed on the owner of Oilfield Welding Limited and his wife would be replaced by two new policies as recommended by another advisor. Would it be beneficial for the clients to replace their existing insurance? How should the financial planner proceed? Norma Nielson is affiliated with University of Calgary. Larry Wood is affiliated with University of Calgary.
Swot Analysis of "Nielsonlar Insurance: Replacing a Life Insurance Plan" written by Norma Nielson, Larry A. Wood includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Insurance Welding facing as an external strategic factors. Some of the topics covered in Nielsonlar Insurance: Replacing a Life Insurance Plan case study are - Strategic Management Strategies, Financial management, Personnel policies and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Nielsonlar Insurance: Replacing a Life Insurance Plan casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is backlash against globalization, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Nielsonlar Insurance: Replacing a Life Insurance Plan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nielsonlar Insurance: Replacing a Life Insurance Plan case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Insurance Welding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Insurance Welding 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 Nielsonlar Insurance: Replacing a Life Insurance Plan can be done for the following purposes –
1. Strategic planning using facts provided in Nielsonlar Insurance: Replacing a Life Insurance Plan case study
2. Improving business portfolio management of Insurance Welding
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Insurance Welding
Strengths Nielsonlar Insurance: Replacing a Life Insurance Plan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Insurance Welding in Nielsonlar Insurance: Replacing a Life Insurance Plan Harvard Business Review case study are -
High brand equity
– Insurance Welding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Insurance Welding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Insurance Welding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Insurance Welding 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.
Organizational Resilience of Insurance Welding
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Insurance Welding does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Insurance Welding is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Finance & Accounting industry
– Nielsonlar Insurance: Replacing a Life Insurance Plan firm has clearly differentiated products in the market place. This has enabled Insurance Welding to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Insurance Welding to invest into research and development (R&D) and innovation.
Innovation driven organization
– Insurance Welding is one of the most innovative firm in sector. Manager in Nielsonlar Insurance: Replacing a Life Insurance Plan Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Insurance Welding 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 Nielsonlar Insurance: Replacing a Life Insurance Plan - 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 switching costs
– The high switching costs that Insurance Welding 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.
Training and development
– Insurance Welding has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Insurance Welding in the sector have low bargaining power. Nielsonlar Insurance: Replacing a Life Insurance Plan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Insurance Welding to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Insurance Welding is one of the leading recruiters in the industry. Managers in the Nielsonlar Insurance: Replacing a Life Insurance Plan are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Insurance Welding 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 Insurance Welding is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nielsonlar Insurance: Replacing a Life Insurance Plan Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Nielsonlar Insurance: Replacing a Life Insurance Plan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nielsonlar Insurance: Replacing a Life Insurance Plan are -
Increasing silos among functional specialists
– The organizational structure of Insurance Welding is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Insurance Welding needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Insurance Welding to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Nielsonlar Insurance: Replacing a Life Insurance Plan, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Interest costs
– Compare to the competition, Insurance Welding 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Nielsonlar Insurance: Replacing a Life Insurance Plan, in the dynamic environment Insurance Welding has struggled to respond to the nimble upstart competition. Insurance Welding has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Insurance Welding 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Insurance Welding 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Nielsonlar Insurance: Replacing a Life Insurance Plan, it seems that the employees of Insurance Welding 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.
Need for greater diversity
– Insurance Welding 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.
Low market penetration in new markets
– Outside its home market of Insurance Welding, firm in the HBR case study Nielsonlar Insurance: Replacing a Life Insurance Plan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Insurance Welding is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nielsonlar Insurance: Replacing a Life Insurance Plan can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Insurance Welding 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. Insurance Welding 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.
Opportunities Nielsonlar Insurance: Replacing a Life Insurance Plan | 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 Nielsonlar Insurance: Replacing a Life Insurance Plan are -
Creating value in data economy
– The success of analytics program of Insurance Welding has opened avenues for new revenue streams for the organization in the industry. This can help Insurance Welding to build a more holistic ecosystem as suggested in the Nielsonlar Insurance: Replacing a Life Insurance Plan case study. Insurance Welding can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Insurance Welding can use these opportunities to build new business models that can help the communities that Insurance Welding operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Better consumer reach
– The expansion of the 5G network will help Insurance Welding to increase its market reach. Insurance Welding 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.
Building a culture of innovation
– managers at Insurance Welding 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 Finance & Accounting segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Insurance Welding can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Insurance Welding can develop new processes and procedures in Finance & Accounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Insurance Welding in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Loyalty marketing
– Insurance Welding 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, Insurance Welding is facing challenges because of the dominance of functional experts in the organization. Nielsonlar Insurance: Replacing a Life Insurance Plan 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.
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 Insurance Welding 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Insurance Welding 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.
Buying journey improvements
– Insurance Welding can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nielsonlar Insurance: Replacing a Life Insurance Plan 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Insurance Welding can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Nielsonlar Insurance: Replacing a Life Insurance Plan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nielsonlar Insurance: Replacing a Life Insurance Plan are -
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Insurance Welding can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nielsonlar Insurance: Replacing a Life Insurance Plan, Insurance Welding may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Insurance Welding 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Insurance Welding in the Finance & Accounting industry. The Finance & Accounting 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.
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 Insurance Welding in the Finance & Accounting sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Insurance Welding is facing in Finance & Accounting 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.
Regulatory challenges
– Insurance Welding 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 Finance & Accounting industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Insurance Welding 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
– Insurance Welding has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Insurance Welding needs to keep up with the evolution of technology in the Finance & Accounting 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
– Insurance Welding 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. Insurance Welding can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Consumer confidence and its impact on Insurance Welding 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.
Weighted SWOT Analysis of Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Insurance Welding needs to make to build a sustainable competitive advantage.
