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 - – challanges to central banks by blockchain based private currencies, wage bills are increasing, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, 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 -
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.
Highly skilled collaborators
– Insurance Welding 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 Nielsonlar Insurance: Replacing a Life Insurance Plan HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Diverse revenue streams
– Insurance Welding is present in almost all the verticals within the industry. This has provided firm in Nielsonlar Insurance: Replacing a Life Insurance Plan 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.
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.
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.
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.
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.
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.
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.
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 -
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Norma Nielson, Larry A. Wood suggests that, Insurance Welding 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.
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.
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.
Lack of clear differentiation of Insurance Welding products
– To increase the profitability and margins on the products, Insurance Welding needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
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.
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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Insurance Welding 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, Nielsonlar Insurance: Replacing a Life Insurance Plan, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– 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.
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.
Learning at scale
– Online learning technologies has now opened space for Insurance Welding 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.
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.
Leveraging digital technologies
– Insurance Welding 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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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. Insurance Welding 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.
Increasing wage structure of Insurance Welding
– 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 Insurance Welding.
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.
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.
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 Insurance Welding business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 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.
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.
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.
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.
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.
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.
