Provident Life and Accident Insurance: The Acquisition of Paul Revere SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Provident Life and Accident Insurance: The Acquisition of Paul Revere
Provident Life & Accident Insurance Co. has made an initial bid to acquire a primary competitor, Paul Revere, from conglomerate, Textron. The due diligence process uncovers a significant block of problematic disability insurance policies. Provident is forced to assess the negative impact of this discovery on its initial valuation and revise its bid. In the process, the divergent views of the evolution of these policies by the bidder and seller have to be translated through discounted cash flow analysis into appropriate bid prices. Finally, this DCF analysis, in combination with multiples analysis, is used in negotiations with Textron and public shareholders.
Authors :: Mihir A. Desai, Mark F. Veblen, Frank Williamson
Swot Analysis of "Provident Life and Accident Insurance: The Acquisition of Paul Revere" written by Mihir A. Desai, Mark F. Veblen, Frank Williamson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Provident Textron facing as an external strategic factors. Some of the topics covered in Provident Life and Accident Insurance: The Acquisition of Paul Revere case study are - Strategic Management Strategies, Financial analysis, Financial management, Mergers & acquisitions, Performance measurement and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Provident Life and Accident Insurance: The Acquisition of Paul Revere casestudy better are - – increasing transportation and logistics costs, increasing energy prices, there is backlash against globalization, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models,
there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Provident Life and Accident Insurance: The Acquisition of Paul Revere
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Provident Life and Accident Insurance: The Acquisition of Paul Revere case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Provident Textron, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Provident Textron 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere can be done for the following purposes –
1. Strategic planning using facts provided in Provident Life and Accident Insurance: The Acquisition of Paul Revere case study
2. Improving business portfolio management of Provident Textron
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 Provident Textron
Strengths Provident Life and Accident Insurance: The Acquisition of Paul Revere | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Provident Textron in Provident Life and Accident Insurance: The Acquisition of Paul Revere Harvard Business Review case study are -
Highly skilled collaborators
– Provident Textron 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Provident Textron is present in almost all the verticals within the industry. This has provided firm in Provident Life and Accident Insurance: The Acquisition of Paul Revere 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Provident Textron digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Provident Textron 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.
Innovation driven organization
– Provident Textron is one of the most innovative firm in sector. Manager in Provident Life and Accident Insurance: The Acquisition of Paul Revere Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Provident Textron
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Provident Textron does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Provident Life and Accident Insurance: The Acquisition of Paul Revere 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.
Low bargaining power of suppliers
– Suppliers of Provident Textron in the sector have low bargaining power. Provident Life and Accident Insurance: The Acquisition of Paul Revere has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Provident Textron to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Provident Textron is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Provident Textron 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.
Ability to lead change in Finance & Accounting field
– Provident Textron is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Provident Textron in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Provident Textron 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
– Provident Textron has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Provident Textron 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.
Weaknesses Provident Life and Accident Insurance: The Acquisition of Paul Revere | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Provident Life and Accident Insurance: The Acquisition of Paul Revere are -
Aligning sales with marketing
– It come across in the case study Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere can leverage the sales team experience to cultivate customer relationships as Provident Textron is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Mihir A. Desai, Mark F. Veblen, Frank Williamson suggests that, Provident Textron 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, Provident Textron 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.
No frontier risks strategy
– After analyzing the HBR case study Provident Life and Accident Insurance: The Acquisition of Paul Revere, 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.
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 Provident Textron supply chain. Even after few cautionary changes mentioned in the HBR case study - Provident Life and Accident Insurance: The Acquisition of Paul Revere, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Provident Textron vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Provident Textron has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Provident Textron is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Provident Life and Accident Insurance: The Acquisition of Paul Revere can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Textron 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Provident Textron is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Provident Textron needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Provident Textron to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Provident Textron, firm in the HBR case study Provident Life and Accident Insurance: The Acquisition of Paul Revere needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Provident Textron 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 - Provident Life and Accident Insurance: The Acquisition of Paul Revere should strive to include more intangible value offerings along with its core products and services.
Opportunities Provident Life and Accident Insurance: The Acquisition of Paul Revere | 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere are -
Leveraging digital technologies
– Provident Textron 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.
Buying journey improvements
– Provident Textron can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Provident Life and Accident Insurance: The Acquisition of Paul Revere 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.
Better consumer reach
– The expansion of the 5G network will help Provident Textron to increase its market reach. Provident Textron 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Provident Textron can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Provident Textron 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.
Using analytics as competitive advantage
– Provident Textron 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Provident Textron to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Provident Textron 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.
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 Provident Textron in the consumer business. Now Provident Textron can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Provident Textron has opened avenues for new revenue streams for the organization in the industry. This can help Provident Textron to build a more holistic ecosystem as suggested in the Provident Life and Accident Insurance: The Acquisition of Paul Revere case study. Provident Textron can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Provident Textron 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 Provident Textron to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Provident Textron 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.
Learning at scale
– Online learning technologies has now opened space for Provident Textron 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Provident Textron 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.
Threats Provident Life and Accident Insurance: The Acquisition of Paul Revere External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Provident Life and Accident Insurance: The Acquisition of Paul Revere are -
Shortening product life cycle
– it is one of the major threat that Provident Textron is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Provident Textron 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. Provident Textron can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Provident Life and Accident Insurance: The Acquisition of Paul Revere, Provident Textron 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
– Provident Textron 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.
High dependence on third party suppliers
– Provident Textron 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.
Regulatory challenges
– Provident Textron 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.
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 Provident Textron.
Consumer confidence and its impact on Provident Textron 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. Provident Textron 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.
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. Provident Textron can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Provident Textron with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Provident Textron needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Life and Accident Insurance: The Acquisition of Paul Revere 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 Provident Textron needs to make to build a sustainable competitive advantage.