Discount (DSCT) SWOT Analysis / TOWS Matrix / MBA Resources
Money Center Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Discount (Israel)
Based on various researches at Oak Spring University , Discount is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing transportation and logistics costs, geopolitical disruptions, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Discount can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Discount, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Discount 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 Discount can be done for the following purposes –
1. Strategic planning of Discount
2. Improving business portfolio management of Discount
3. Assessing feasibility of the new initiative in Israel
4. Making a Money Center Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Discount
Strengths of Discount | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Discount are -
Effective Research and Development (R&D)
– Discount has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Discount staying ahead in the Money Center Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Discount 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 recruit top talent
– Discount is one of the leading players in the Money Center Banks industry in Israel. It is in a position to attract the best talent available in Israel. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Discount in the Financial sector have low bargaining power. Discount has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Discount to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Discount 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 Discount is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Discount emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Discount comprises – understanding the underlying the factors in the Money Center Banks 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 Money Center Banks industry
– Discount has clearly differentiated products in the market place. This has enabled Discount to fetch slight price premium compare to the competitors in the Money Center Banks industry. The sustainable margins have also helped Discount to invest into research and development (R&D) and innovation.
High brand equity
– Discount has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Discount to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Discount has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Discount 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.
Organizational Resilience of Discount
– The covid-19 pandemic has put organizational resilience at the centre of everthing Discount does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Discount are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Money Center Banks industry
- digital transformation varies from industry to industry. For Discount digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Discount 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.
Weaknesses of Discount | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Discount are -
High bargaining power of channel partners in Money Center Banks industry
– because of the regulatory requirements in Israel, Discount 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 Money Center Banks industry.
Lack of clear differentiation of Discount products
– To increase the profitability and margins on the products, Discount needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Discount strategy
– From the outside it seems that the employees of Discount 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.
High operating costs
– Compare to the competitors, Discount has high operating costs in the Money Center Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Discount lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Discount has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Money Center Banks industry over the last five years. Discount 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.
Workers concerns about automation
– As automation is fast increasing in the Money Center Banks industry, Discount 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Discount is slow explore the new channels of communication. These new channels of communication can help Discount to provide better information regarding Money Center Banks products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Discount 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.
Capital Spending Reduction
– Even during the low interest decade, Discount 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 Money Center Banks industry using digital technology.
Products dominated business model
– Even though Discount has some of the most successful models in the Money Center Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Discount should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Israel, Discount needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Discount Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Discount are -
Creating value in data economy
– The success of analytics program of Discount has opened avenues for new revenue streams for the organization in Money Center Banks industry. This can help Discount to build a more holistic ecosystem for Discount products in the Money Center Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Discount 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Money Center Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Discount 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. Discount 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.
Better consumer reach
– The expansion of the 5G network will help Discount to increase its market reach. Discount 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.
Developing new processes and practices
– Discount can develop new processes and procedures in Money Center Banks 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Discount can use these opportunities to build new business models that can help the communities that Discount operates in. Secondly it can use opportunities from government spending in Money Center Banks sector.
Learning at scale
– Online learning technologies has now opened space for Discount 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Money Center Banks industry, but it has also influenced the consumer preferences. Discount can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Discount can use the latest technology developments to improve its manufacturing and designing process in Money Center Banks 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.
Buying journey improvements
– Discount can improve the customer journey of consumers in the Money Center Banks 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.
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 Discount 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Discount 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 Discount to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Discount can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Discount External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Discount are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Discount 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 Discount prominent markets.
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 Discount in the Money Center Banks sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Discount in Money Center Banks industry. The Money Center Banks 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 dependence on third party suppliers
– Discount 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.
Environmental challenges
– Discount 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. Discount can take advantage of this fund but it will also bring new competitors in the Money Center Banks 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 Discount business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Money Center Banks industry are lowering. It can presents Discount with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Money Center Banks sector.
Stagnating economy with rate increase
– Discount 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 Money Center Banks industry.
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. Discount needs to understand the core reasons impacting the Money Center Banks industry. This will help it in building a better workplace.
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. Discount 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.
Shortening product life cycle
– it is one of the major threat that Discount is facing in Money Center Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Money Center Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Discount can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Discount Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Discount 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 Discount 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 Discount 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 Discount 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 Discount needs to make to build a sustainable competitive advantage.
