Allianz AG: Becoming a European Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Allianz AG: Becoming a European Company
Focuses on the decision made by leadership at Allianz AG, the German insurance and financial services company, to complete a cross-border merger with the Italian insurance and financial services company, RAS. Allianz, however, could not complete the cross-border merger by remaining a German corporation under the current German statutes. Allianz, however, could conduct the cross-border merger as a European company according to the Statute of the European Community (Societas Europaea, or SE), which was recently passed by the European Union and adopted into German law. Examines the rationale for the decision made by the Allianz supervisory board and the board of management in addition to the process of becoming an SE, including the change in the composition of the supervisory board as a result of the merger and the conversion to an SE.
Swot Analysis of "Allianz AG: Becoming a European Company" written by Jay W. Lorsch, Alexis Chernak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Allianz Se facing as an external strategic factors. Some of the topics covered in Allianz AG: Becoming a European Company case study are - Strategic Management Strategies, International business, Mergers & acquisitions and Global Business.
Some of the macro environment factors that can be used to understand the Allianz AG: Becoming a European Company casestudy better are - – there is backlash against globalization, wage bills are increasing, technology disruption, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, geopolitical disruptions,
increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Allianz AG: Becoming a European Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Allianz AG: Becoming a European Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Allianz Se, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Allianz Se 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 Allianz AG: Becoming a European Company can be done for the following purposes –
1. Strategic planning using facts provided in Allianz AG: Becoming a European Company case study
2. Improving business portfolio management of Allianz Se
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Allianz Se
Strengths Allianz AG: Becoming a European Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Allianz Se in Allianz AG: Becoming a European Company Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Allianz Se in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Allianz Se 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 Jay W. Lorsch, Alexis Chernak 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.
Effective Research and Development (R&D)
– Allianz Se 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 Allianz AG: Becoming a European Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Allianz Se 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 Allianz AG: Becoming a European Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Allianz Se 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.
Strong track record of project management
– Allianz Se is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Allianz Se has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Allianz AG: Becoming a European Company 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.
Ability to recruit top talent
– Allianz Se is one of the leading recruiters in the industry. Managers in the Allianz AG: Becoming a European Company 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
- Allianz Se 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 Allianz Se is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Allianz AG: Becoming a European Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Allianz Se 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.
Successful track record of launching new products
– Allianz Se has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Allianz Se 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Allianz Se digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Allianz Se 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.
Weaknesses Allianz AG: Becoming a European Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Allianz AG: Becoming a European Company are -
Lack of clear differentiation of Allianz Se products
– To increase the profitability and margins on the products, Allianz Se needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Allianz AG: Becoming a European Company, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Slow decision making process
– As mentioned earlier in the report, Allianz Se 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. Allianz Se 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.
Increasing silos among functional specialists
– The organizational structure of Allianz Se is dominated by functional specialists. It is not different from other players in the Global Business segment. Allianz Se needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Allianz Se to focus more on services rather than just following the product 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 Allianz Se supply chain. Even after few cautionary changes mentioned in the HBR case study - Allianz AG: Becoming a European Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Allianz Se vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Allianz Se 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 operating costs
– Compare to the competitors, firm in the HBR case study Allianz AG: Becoming a European Company 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 Allianz Se 's lucrative customers.
Interest costs
– Compare to the competition, Allianz Se 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.
Skills based hiring
– The stress on hiring functional specialists at Allianz Se 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Allianz AG: Becoming a European Company, is just above the industry average. Allianz Se 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Allianz AG: Becoming a European Company 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 Allianz Se has relatively successful track record of launching new products.
Opportunities Allianz AG: Becoming a European Company | 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 Allianz AG: Becoming a European Company are -
Loyalty marketing
– Allianz Se 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Allianz Se in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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. Allianz Se can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Allianz Se in the consumer business. Now Allianz Se can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Allianz Se 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Allianz Se can use these opportunities to build new business models that can help the communities that Allianz Se operates in. Secondly it can use opportunities from government spending in Global Business sector.
Creating value in data economy
– The success of analytics program of Allianz Se has opened avenues for new revenue streams for the organization in the industry. This can help Allianz Se to build a more holistic ecosystem as suggested in the Allianz AG: Becoming a European Company case study. Allianz Se can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Allianz Se can develop new processes and procedures in Global Business 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
– Allianz Se can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Allianz Se can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Allianz Se 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.
Leveraging digital technologies
– Allianz Se 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.
Better consumer reach
– The expansion of the 5G network will help Allianz Se to increase its market reach. Allianz Se 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.
Threats Allianz AG: Becoming a European Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Allianz AG: Becoming a European Company are -
Environmental challenges
– Allianz Se 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. Allianz Se can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Allianz Se 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 Allianz Se
– 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 Allianz Se.
Technology acceleration in Forth Industrial Revolution
– Allianz Se has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Allianz Se needs to keep up with the evolution of technology in the Global Business 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Allianz Se can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Allianz Se 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 Allianz AG: Becoming a European Company .
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.
Stagnating economy with rate increase
– Allianz Se 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.
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 Allianz Se in the Global Business sector and impact the bottomline of the organization.
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. Allianz Se 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.
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. Allianz Se needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Allianz AG: Becoming a European Company, Allianz Se may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Weighted SWOT Analysis of Allianz AG: Becoming a European Company 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 Allianz AG: Becoming a European Company 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 Allianz AG: Becoming a European Company 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 Allianz AG: Becoming a European Company 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 Allianz AG: Becoming a European Company 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 Allianz Se needs to make to build a sustainable competitive advantage.
