Victoria Insurance Tbk PT (VINS) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Prop. & Casualty)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Victoria Insurance Tbk PT (Indonesia)
Based on various researches at Oak Spring University , Victoria Insurance Tbk PT is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Victoria Insurance Tbk PT
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Victoria Insurance Tbk PT can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Victoria Insurance Tbk PT, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT can be done for the following purposes –
1. Strategic planning of Victoria Insurance Tbk PT
2. Improving business portfolio management of Victoria Insurance Tbk PT
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Insurance (Prop. & Casualty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Victoria Insurance Tbk PT
Strengths of Victoria Insurance Tbk PT | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Victoria Insurance Tbk PT are -
Learning organization
- Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Victoria Insurance Tbk PT emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Victoria Insurance Tbk PT has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Victoria Insurance Tbk PT 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.
Sustainable margins compare to other players in Insurance (Prop. & Casualty) industry
– Victoria Insurance Tbk PT has clearly differentiated products in the market place. This has enabled Victoria Insurance Tbk PT to fetch slight price premium compare to the competitors in the Insurance (Prop. & Casualty) industry. The sustainable margins have also helped Victoria Insurance Tbk PT to invest into research and development (R&D) and innovation.
Analytics focus
– Victoria Insurance Tbk PT 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 Indonesia 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.
Effective Research and Development (R&D)
– Victoria Insurance Tbk PT has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Victoria Insurance Tbk PT 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.
High switching costs
– The high switching costs that Victoria Insurance Tbk PT 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.
Digital Transformation in Insurance (Prop. & Casualty) industry
- digital transformation varies from industry to industry. For Victoria Insurance Tbk PT digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Victoria Insurance Tbk PT 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.
Highly skilled collaborators
– Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Victoria Insurance Tbk PT in the Financial sector have low bargaining power. Victoria Insurance Tbk PT has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Victoria Insurance Tbk PT to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Insurance (Prop. & Casualty)
– Victoria Insurance Tbk PT is one of the leading players in the Insurance (Prop. & Casualty) industry in Indonesia. Over the years it has not only transformed the business landscape in the Insurance (Prop. & Casualty) industry in Indonesia but also across the existing markets. The ability to lead change has enabled Victoria Insurance Tbk PT in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Victoria Insurance Tbk PT in Insurance (Prop. & Casualty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Victoria Insurance Tbk PT is one of the most innovative firm in Insurance (Prop. & Casualty) sector.
Weaknesses of Victoria Insurance Tbk PT | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Victoria Insurance Tbk PT are -
High bargaining power of channel partners in Insurance (Prop. & Casualty) industry
– because of the regulatory requirements in Indonesia, Victoria Insurance Tbk PT 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 Insurance (Prop. & Casualty) industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Victoria Insurance Tbk PT is slow explore the new channels of communication. These new channels of communication can help Victoria Insurance Tbk PT 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, Victoria Insurance Tbk PT 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.
High operating costs
– Compare to the competitors, Victoria Insurance Tbk PT has high operating costs in the Insurance (Prop. & Casualty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Victoria Insurance Tbk PT lucrative customers.
Compensation and incentives
– The revenue per employee of Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT ‘s star products
– The top 2 products and services of Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Victoria Insurance Tbk PT is one of the leading players in the Insurance (Prop. & Casualty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Insurance (Prop. & Casualty) industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Victoria Insurance Tbk PT is dominated by functional specialists. It is not different from other players in the Insurance (Prop. & Casualty) industry, but Victoria Insurance Tbk PT needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Victoria Insurance Tbk PT to focus more on services in the Insurance (Prop. & Casualty) industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Victoria Insurance Tbk PT has a high cash cycle compare to other players in the Insurance (Prop. & Casualty) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Indonesia, Victoria Insurance Tbk PT needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Victoria Insurance Tbk PT 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.
Victoria Insurance Tbk PT Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Victoria Insurance Tbk PT are -
Creating value in data economy
– The success of analytics program of Victoria Insurance Tbk PT has opened avenues for new revenue streams for the organization in Insurance (Prop. & Casualty) industry. This can help Victoria Insurance Tbk PT to build a more holistic ecosystem for Victoria Insurance Tbk PT products in the Insurance (Prop. & Casualty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Victoria Insurance Tbk PT can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Victoria Insurance Tbk PT is facing challenges because of the dominance of functional experts in the organization. Victoria Insurance Tbk PT 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.
Building a culture of innovation
– managers at Victoria Insurance Tbk PT 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 Insurance (Prop. & Casualty) industry.
Manufacturing automation
– Victoria Insurance Tbk PT can use the latest technology developments to improve its manufacturing and designing process in Insurance (Prop. & Casualty) sector. 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.
Developing new processes and practices
– Victoria Insurance Tbk PT 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Victoria Insurance Tbk PT 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. Victoria Insurance Tbk PT can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Victoria Insurance Tbk PT can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Victoria Insurance Tbk PT 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.
Learning at scale
– Online learning technologies has now opened space for Victoria Insurance Tbk PT 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Victoria Insurance Tbk PT in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Insurance (Prop. & Casualty) industry, and it will provide faster access to the consumers.
Threats Victoria Insurance Tbk PT External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Victoria Insurance Tbk PT are -
Technology acceleration in Forth Industrial Revolution
– Victoria Insurance Tbk PT has witnessed rapid integration of technology during Covid-19 in the Insurance (Prop. & Casualty) industry. As one of the leading players in the industry, Victoria Insurance Tbk PT 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.
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. Victoria Insurance Tbk PT needs to understand the core reasons impacting the Insurance (Prop. & Casualty) industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Victoria Insurance Tbk PT 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.
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 Victoria Insurance Tbk PT business can come under increasing regulations regarding data privacy, data security, etc.
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 Victoria Insurance Tbk PT in the Insurance (Prop. & Casualty) sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Insurance (Prop. & Casualty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Victoria Insurance Tbk PT can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Victoria Insurance Tbk PT
– 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 Victoria Insurance Tbk PT.
Regulatory challenges
– Victoria Insurance Tbk PT 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 Insurance (Prop. & Casualty) industry regulations.
High dependence on third party suppliers
– Victoria Insurance Tbk PT 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.
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 Victoria Insurance Tbk PT.
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.
Environmental challenges
– Victoria Insurance Tbk PT 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. Victoria Insurance Tbk PT can take advantage of this fund but it will also bring new competitors in the Insurance (Prop. & Casualty) industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Victoria Insurance Tbk PT 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.
Weighted SWOT Analysis of Victoria Insurance Tbk PT Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT 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 Victoria Insurance Tbk PT needs to make to build a sustainable competitive advantage.
