SWOT Analysis / TOWS Matrix for ICICI Lombard (India)
Based on various researches at Oak Spring University , ICICI Lombard is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ICICI Lombard can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ICICI Lombard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ICICI Lombard 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 ICICI Lombard can be done for the following purposes –
1. Strategic planning of ICICI Lombard
2. Improving business portfolio management of ICICI Lombard
3. Assessing feasibility of the new initiative in India
4. Making a Insurance (Prop. & Casualty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ICICI Lombard
Strengths of ICICI Lombard | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ICICI Lombard are -
Effective Research and Development (R&D)
– ICICI Lombard has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ICICI Lombard staying ahead in the Insurance (Prop. & Casualty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– ICICI Lombard has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ICICI Lombard 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.
Analytics focus
– ICICI Lombard 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 Insurance (Prop. & Casualty) industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Strong track record of project management in the Insurance (Prop. & Casualty) industry
– ICICI Lombard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Insurance (Prop. & Casualty) industry
- digital transformation varies from industry to industry. For ICICI Lombard digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ICICI Lombard 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.
High brand equity
– ICICI Lombard has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ICICI Lombard to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of ICICI Lombard in the Financial sector have low bargaining power. ICICI Lombard has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ICICI Lombard to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of ICICI Lombard
– The covid-19 pandemic has put organizational resilience at the centre of everthing ICICI Lombard does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- ICICI Lombard 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 ICICI Lombard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ICICI Lombard emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– ICICI Lombard has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Prop. & Casualty) industry. Secondly the value chain collaborators of ICICI Lombard have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– ICICI Lombard has one of the best training and development program in Financial industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Insurance (Prop. & Casualty) industry
– ICICI Lombard has clearly differentiated products in the market place. This has enabled ICICI Lombard to fetch slight price premium compare to the competitors in the Insurance (Prop. & Casualty) industry. The sustainable margins have also helped ICICI Lombard to invest into research and development (R&D) and innovation.
Weaknesses of ICICI Lombard | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ICICI Lombard are -
No frontier risks strategy
– From the 10K / annual statement of ICICI Lombard, it seems that company is thinking out the frontier risks that can impact Insurance (Prop. & Casualty) industry. 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.
Products dominated business model
– Even though ICICI Lombard has some of the most successful models in the Insurance (Prop. & Casualty) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. ICICI Lombard should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, ICICI Lombard 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 Insurance (Prop. & Casualty) industry using digital technology.
Compensation and incentives
– The revenue per employee of ICICI Lombard is just above the Insurance (Prop. & Casualty) industry average. It 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 ICICI Lombard ‘s star products
– The top 2 products and services of ICICI Lombard still accounts for major business revenue. This dependence on star products in Insurance (Prop. & Casualty) industry has resulted into insufficient focus on developing new products, even though ICICI Lombard has relatively successful track record of launching new products.
Lack of clear differentiation of ICICI Lombard products
– To increase the profitability and margins on the products, ICICI Lombard needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of ICICI Lombard is dominated by functional specialists. It is not different from other players in the Insurance (Prop. & Casualty) industry, but ICICI Lombard needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ICICI Lombard to focus more on services in the Insurance (Prop. & Casualty) industry rather than just following the product oriented approach.
Skills based hiring in Insurance (Prop. & Casualty) industry
– The stress on hiring functional specialists at ICICI Lombard 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, ICICI Lombard is slow explore the new channels of communication. These new channels of communication can help ICICI Lombard to provide better information regarding Insurance (Prop. & Casualty) products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Insurance (Prop. & Casualty) industry, ICICI Lombard needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– From the outside it seems that ICICI Lombard needs to have more collaboration between its sales team and marketing team. Sales professionals in the Insurance (Prop. & Casualty) industry have deep experience in developing customer relationships. Marketing department at ICICI Lombard can leverage the sales team experience to cultivate customer relationships as ICICI Lombard is planning to shift buying processes online.
ICICI Lombard Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ICICI Lombard are -
Better consumer reach
– The expansion of the 5G network will help ICICI Lombard to increase its market reach. ICICI Lombard 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.
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 ICICI Lombard 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, ICICI Lombard is facing challenges because of the dominance of functional experts in the organization. ICICI Lombard can utilize new technology in the field of Insurance (Prop. & Casualty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ICICI Lombard can use these opportunities to build new business models that can help the communities that ICICI Lombard operates in. Secondly it can use opportunities from government spending in Insurance (Prop. & Casualty) sector.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Prop. & Casualty) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for ICICI Lombard in the Insurance (Prop. & Casualty) industry. Now ICICI Lombard can target international markets with far fewer capital restrictions requirements than the existing system.
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. ICICI Lombard can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, ICICI Lombard 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Insurance (Prop. & Casualty) industry, but it has also influenced the consumer preferences. ICICI Lombard can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for ICICI Lombard 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 ICICI Lombard to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– ICICI Lombard 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, ICICI Lombard 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 ICICI Lombard 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
– ICICI Lombard can develop new processes and procedures in Insurance (Prop. & Casualty) 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.
Buying journey improvements
– ICICI Lombard can improve the customer journey of consumers in the Insurance (Prop. & Casualty) industry by using analytics and artificial intelligence. It 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.
Threats ICICI Lombard External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ICICI Lombard are -
Stagnating economy with rate increase
– ICICI Lombard 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 Insurance (Prop. & Casualty) industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Prop. & Casualty) industry are lowering. It can presents ICICI Lombard with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Prop. & Casualty) sector.
Consumer confidence and its impact on ICICI Lombard 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 Insurance (Prop. & Casualty) industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ICICI Lombard 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 ICICI Lombard prominent markets.
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. ICICI Lombard needs to understand the core reasons impacting the Insurance (Prop. & Casualty) industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– ICICI Lombard has witnessed rapid integration of technology during Covid-19 in the Insurance (Prop. & Casualty) industry. As one of the leading players in the industry, ICICI Lombard needs to keep up with the evolution of technology in the Insurance (Prop. & Casualty) 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, ICICI Lombard may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Insurance (Prop. & Casualty) sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ICICI Lombard in Insurance (Prop. & Casualty) industry. The Insurance (Prop. & Casualty) 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 ICICI Lombard.
Shortening product life cycle
– it is one of the major threat that ICICI Lombard is facing in Insurance (Prop. & Casualty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 ICICI Lombard business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– ICICI Lombard 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. ICICI Lombard can take advantage of this fund but it will also bring new competitors in the Insurance (Prop. & Casualty) industry.
Weighted SWOT Analysis of ICICI Lombard Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ICICI Lombard 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 ICICI Lombard 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 ICICI Lombard 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 ICICI Lombard 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 ICICI Lombard needs to make to build a sustainable competitive advantage.