V L S Finance Ltd (VLSF) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for V L S Finance Ltd (India)

Based on various researches at Oak Spring University , V L S Finance Ltd is operating in a macro-environment that has been destablized by – there is backlash against globalization, central banks are concerned over increasing inflation, geopolitical disruptions, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing energy prices, etc

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Introduction to SWOT Analysis of V L S Finance Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that V L S Finance Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the V L S Finance Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which V L S Finance Ltd 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of V L S Finance Ltd can be done for the following purposes –
1. Strategic planning of V L S Finance Ltd
2. Improving business portfolio management of V L S Finance Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of V L S Finance Ltd

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Strengths of V L S Finance Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of V L S Finance Ltd are -

Ability to lead change in Investment Services

– V L S Finance Ltd is one of the leading players in the Investment Services industry in India. Over the years it has not only transformed the business landscape in the Investment Services industry in India but also across the existing markets. The ability to lead change has enabled V L S Finance Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Operational resilience

– The operational resilience strategy of V L S Finance Ltd 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.

Innovation driven organization

– V L S Finance Ltd is one of the most innovative firm in Investment Services sector.

Analytics focus

– V L S Finance Ltd 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 Investment Services 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.

Low bargaining power of suppliers

– Suppliers of V L S Finance Ltd in the Financial sector have low bargaining power. V L S Finance Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps V L S Finance Ltd to manage not only supply disruptions but also source products at highly competitive prices.

Effective Research and Development (R&D)

– V L S Finance Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – V L S Finance Ltd staying ahead in the Investment Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of V L S Finance Ltd in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Training and development

– V L S Finance Ltd 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.

Strong track record of project management in the Investment Services industry

– V L S Finance Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Organizational Resilience of V L S Finance Ltd

– The covid-19 pandemic has put organizational resilience at the centre of everthing V L S Finance Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Ability to recruit top talent

– V L S Finance Ltd is one of the leading players in the Investment Services industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.

Sustainable margins compare to other players in Investment Services industry

– V L S Finance Ltd has clearly differentiated products in the market place. This has enabled V L S Finance Ltd to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped V L S Finance Ltd to invest into research and development (R&D) and innovation.

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Weaknesses of V L S Finance Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of V L S Finance Ltd are -

Interest costs

– Compare to the competition, V L S Finance Ltd 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.

Lack of clear differentiation of V L S Finance Ltd products

– To increase the profitability and margins on the products, V L S Finance Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.

Workers concerns about automation

– As automation is fast increasing in the Investment Services industry, V L S Finance Ltd 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.

Slow decision making process

– As mentioned earlier in the report, V L S Finance Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Investment Services industry over the last five years. V L S Finance Ltd 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.

Aligning sales with marketing

– From the outside it seems that V L S Finance Ltd 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 V L S Finance Ltd can leverage the sales team experience to cultivate customer relationships as V L S Finance Ltd is planning to shift buying processes online.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, V L S Finance Ltd is slow explore the new channels of communication. These new channels of communication can help V L S Finance Ltd to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.

Increasing silos among functional specialists

– The organizational structure of V L S Finance Ltd is dominated by functional specialists. It is not different from other players in the Investment Services industry, but V L S Finance Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help V L S Finance Ltd to focus more on services in the Investment Services industry rather than just following the product oriented approach.

Slow to strategic competitive environment developments

– As V L S Finance Ltd 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.

Capital Spending Reduction

– Even during the low interest decade, V L S Finance Ltd 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 Investment Services industry using digital technology.

High cash cycle compare to competitors

V L S Finance Ltd has a high cash cycle compare to other players in the Investment Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Products dominated business model

– Even though V L S Finance Ltd 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. V L S Finance Ltd should strive to include more intangible value offerings along with its core products and services.

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V L S Finance Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of V L S Finance Ltd are -

Buying journey improvements

– V L S Finance Ltd can improve the customer journey of consumers in the Investment Services 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.

Better consumer reach

– The expansion of the 5G network will help V L S Finance Ltd to increase its market reach. V L S Finance Ltd 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, V L S Finance Ltd can use these opportunities to build new business models that can help the communities that V L S Finance Ltd operates in. Secondly it can use opportunities from government spending in Investment Services sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for V L S Finance Ltd 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, V L S Finance Ltd 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.

Creating value in data economy

– The success of analytics program of V L S Finance Ltd has opened avenues for new revenue streams for the organization in Investment Services industry. This can help V L S Finance Ltd to build a more holistic ecosystem for V L S Finance Ltd products in the Investment Services industry by providing – 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 V L S Finance Ltd 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 V L S Finance Ltd to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, V L S Finance Ltd is facing challenges because of the dominance of functional experts in the organization. V L S Finance Ltd 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.

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. V L S Finance Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Loyalty marketing

– V L S Finance Ltd 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.

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. V L S Finance Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at V L S Finance Ltd 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 Investment Services industry.

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. V L S Finance Ltd 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. V L S Finance Ltd 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.

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Threats V L S Finance Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of V L S Finance Ltd are -

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.

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 V L S Finance Ltd business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that V L S Finance Ltd is facing in Investment Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– V L S Finance Ltd has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, V L S Finance Ltd needs to keep up with the evolution of technology in the Investment Services 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.

Consumer confidence and its impact on V L S Finance Ltd 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.

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 V L S Finance Ltd.

Regulatory challenges

– V L S Finance Ltd 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.

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 V L S Finance Ltd in the Investment Services sector and impact the bottomline of the organization.

Environmental challenges

– V L S Finance Ltd 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. V L S Finance Ltd can take advantage of this fund but it will also bring new competitors in the Investment Services industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, V L S Finance Ltd 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for V L S Finance Ltd 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.

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. V L S Finance Ltd needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– V L S Finance Ltd 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 Investment Services industry.

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Weighted SWOT Analysis of V L S Finance Ltd Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at V L S Finance Ltd 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 V L S Finance Ltd 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 V L S Finance Ltd 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 V L S Finance Ltd 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 V L S Finance Ltd needs to make to build a sustainable competitive advantage.

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