SWOT Analysis / TOWS Matrix for Contango Asset (Australia)
Based on various researches at Oak Spring University , Contango Asset is operating in a macro-environment that has been destablized by – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Contango Asset can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Contango Asset, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Contango Asset 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 Contango Asset can be done for the following purposes –
1. Strategic planning of Contango Asset
2. Improving business portfolio management of Contango Asset
3. Assessing feasibility of the new initiative in Australia
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Contango Asset
Strengths of Contango Asset | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Contango Asset are -
Organizational Resilience of Contango Asset
– The covid-19 pandemic has put organizational resilience at the centre of everthing Contango Asset does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Contango Asset has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Investment Services industry. Secondly the value chain collaborators of Contango Asset have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Contango Asset in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Contango Asset is one of the leading players in the Investment Services industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management in the Investment Services industry
– Contango Asset is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Contango Asset 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 Contango Asset is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Contango Asset emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Contango Asset comprises – understanding the underlying the factors in the Investment Services 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.
Sustainable margins compare to other players in Investment Services industry
– Contango Asset has clearly differentiated products in the market place. This has enabled Contango Asset to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped Contango Asset to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Contango Asset is present in almost all the verticals within the Investment Services industry. This has provided Contango Asset 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.
Training and development
– Contango Asset 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.
Ability to lead change in Investment Services
– Contango Asset is one of the leading players in the Investment Services industry in Australia. Over the years it has not only transformed the business landscape in the Investment Services industry in Australia but also across the existing markets. The ability to lead change has enabled Contango Asset in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Contango Asset in the Financial sector have low bargaining power. Contango Asset has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Contango Asset to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Contango Asset | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Contango Asset are -
High operating costs
– Compare to the competitors, Contango Asset has high operating costs in the Investment Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Contango Asset lucrative customers.
Slow to strategic competitive environment developments
– As Contango Asset is one of the leading players in the Investment Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Investment Services industry in last five years.
Products dominated business model
– Even though Contango Asset has some of the most successful models in the Investment Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Contango Asset should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Contango Asset needs to have more collaboration between its sales team and marketing team. Sales professionals in the Investment Services industry have deep experience in developing customer relationships. Marketing department at Contango Asset can leverage the sales team experience to cultivate customer relationships as Contango Asset is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Contango Asset is dominated by functional specialists. It is not different from other players in the Investment Services industry, but Contango Asset needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Contango Asset to focus more on services in the Investment Services industry 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 Contango Asset supply chain. Even after few cautionary changes, Contango Asset is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Contango Asset vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Contango Asset strategy
– From the outside it seems that the employees of Contango Asset don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring in Investment Services industry
– The stress on hiring functional specialists at Contango Asset 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.
Lack of clear differentiation of Contango Asset products
– To increase the profitability and margins on the products, Contango Asset needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Investment Services industry
– because of the regulatory requirements in Australia, Contango Asset 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 Investment Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at Contango Asset, in the dynamic environment of Investment Services industry it has struggled to respond to the nimble upstart competition. Contango Asset has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Contango Asset Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Contango Asset are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Contango Asset can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Investment Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Contango Asset in the Investment Services industry. Now Contango Asset can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Contango Asset 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Contango Asset can use these opportunities to build new business models that can help the communities that Contango Asset operates in. Secondly it can use opportunities from government spending in Investment Services sector.
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 Contango Asset to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Contango Asset 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, Contango Asset 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.
Using analytics as competitive advantage
– Contango Asset has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Investment Services sector. This continuous investment in analytics has enabled Contango Asset to build a competitive advantage using analytics. The analytics driven competitive advantage can help Contango Asset to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Investment Services industry, but it has also influenced the consumer preferences. Contango Asset can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Contango Asset in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Investment Services industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Contango Asset is facing challenges because of the dominance of functional experts in the organization. Contango Asset can utilize new technology in the field of Investment Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Investment Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Contango Asset 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. Contango Asset 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.
Creating value in data economy
– The success of analytics program of Contango Asset has opened avenues for new revenue streams for the organization in Investment Services industry. This can help Contango Asset to build a more holistic ecosystem for Contango Asset products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Contango Asset External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Contango Asset are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Contango Asset 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 Contango Asset prominent markets.
Increasing wage structure of Contango Asset
– 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 Contango Asset.
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 Contango Asset.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Contango Asset in Investment Services industry. The Investment Services 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Investment Services industry are lowering. It can presents Contango Asset with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Investment Services sector.
Consumer confidence and its impact on Contango Asset 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 Investment Services industry and other sectors.
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.
Regulatory challenges
– Contango Asset 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 Investment Services industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Contango Asset may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Investment Services sector.
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 Contango Asset in the Investment Services 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. Contango Asset 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 Investment Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Contango Asset can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Weighted SWOT Analysis of Contango Asset Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Contango Asset 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 Contango Asset 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 Contango Asset 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 Contango Asset 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 Contango Asset needs to make to build a sustainable competitive advantage.