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 - – there is increasing trade war between United States & China, increasing energy prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, technology disruption, 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 -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Insurance Welding digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Insurance Welding 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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Insurance Welding 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.
Operational resilience
– The operational resilience strategy in the Nielsonlar Insurance: Replacing a Life Insurance Plan 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.
Superior customer experience
– The customer experience strategy of Insurance Welding in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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.
Analytics focus
– Insurance Welding 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 Norma Nielson, Larry A. Wood 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.
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.
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 -
Products dominated business model
– Even though Insurance Welding 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 - Nielsonlar Insurance: Replacing a Life Insurance Plan should strive to include more intangible value offerings along with its core products and services.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Insurance Welding has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Nielsonlar Insurance: Replacing a Life Insurance Plan HBR case study mentions - Insurance Welding takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Nielsonlar Insurance: Replacing a Life Insurance Plan 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 Nielsonlar Insurance: Replacing a Life Insurance Plan can leverage the sales team experience to cultivate customer relationships as Insurance Welding is planning to shift buying processes online.
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.
Skills based hiring
– The stress on hiring functional specialists at Insurance Welding 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.
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 Insurance Welding supply chain. Even after few cautionary changes mentioned in the HBR case study - Nielsonlar Insurance: Replacing a Life Insurance Plan, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Insurance Welding vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Nielsonlar Insurance: Replacing a Life Insurance Plan, is just above the industry average. Insurance Welding 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.
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.
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 -
Using analytics as competitive advantage
– Insurance Welding 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 Nielsonlar Insurance: Replacing a Life Insurance Plan - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Insurance Welding to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Insurance Welding can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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.
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. Insurance Welding can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Insurance Welding 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. Insurance Welding 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.
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.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Insurance Welding 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 Insurance Welding to hire the very best people irrespective of their geographical location.
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 -
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.
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.
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.
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 .
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.
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.
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.
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.
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.
High dependence on third party suppliers
– Insurance Welding 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.
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 Insurance Welding.
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. Insurance Welding needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.