PennantPark Floating Rate Capital (PFLT) SWOT Analysis / TOWS Matrix / MBA Resources
Investment Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for PennantPark Floating Rate Capital (Israel)
Based on various researches at Oak Spring University , PennantPark Floating Rate Capital is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, wage bills are increasing, central banks are concerned over increasing inflation, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc
Introduction to SWOT Analysis of PennantPark Floating Rate Capital
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PennantPark Floating Rate Capital can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PennantPark Floating Rate Capital, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital can be done for the following purposes –
1. Strategic planning of PennantPark Floating Rate Capital
2. Improving business portfolio management of PennantPark Floating Rate Capital
3. Assessing feasibility of the new initiative in Israel
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PennantPark Floating Rate Capital
Strengths of PennantPark Floating Rate Capital | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PennantPark Floating Rate Capital are -
Strong track record of project management in the Investment Services industry
– PennantPark Floating Rate Capital is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– PennantPark Floating Rate Capital is one of the leading players in the Investment Services 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.
Innovation driven organization
– PennantPark Floating Rate Capital is one of the most innovative firm in Investment Services sector.
Ability to lead change in Investment Services
– PennantPark Floating Rate Capital is one of the leading players in the Investment Services industry in Israel. Over the years it has not only transformed the business landscape in the Investment Services industry in Israel but also across the existing markets. The ability to lead change has enabled PennantPark Floating Rate Capital in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– PennantPark Floating Rate Capital has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PennantPark Floating Rate Capital 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.
Low bargaining power of suppliers
– Suppliers of PennantPark Floating Rate Capital in the Financial sector have low bargaining power. PennantPark Floating Rate Capital has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PennantPark Floating Rate Capital to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– PennantPark Floating Rate Capital has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled PennantPark Floating Rate Capital to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of PennantPark Floating Rate Capital in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– PennantPark Floating Rate Capital is present in almost all the verticals within the Investment Services industry. This has provided PennantPark Floating Rate Capital 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.
Effective Research and Development (R&D)
– PennantPark Floating Rate Capital has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PennantPark Floating Rate Capital 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.
Learning organization
- PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PennantPark Floating Rate Capital emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of PennantPark Floating Rate Capital | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PennantPark Floating Rate Capital are -
High dependence on PennantPark Floating Rate Capital ‘s star products
– The top 2 products and services of PennantPark Floating Rate Capital still accounts for major business revenue. This dependence on star products in Investment Services industry has resulted into insufficient focus on developing new products, even though PennantPark Floating Rate Capital has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of PennantPark Floating Rate Capital is dominated by functional specialists. It is not different from other players in the Investment Services industry, but PennantPark Floating Rate Capital needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PennantPark Floating Rate Capital to focus more on services in the Investment Services industry rather than just following the product oriented approach.
High cash cycle compare to competitors
PennantPark Floating Rate Capital 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.
Low market penetration in new markets
– Outside its home market of Israel, PennantPark Floating Rate Capital needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of PennantPark Floating Rate Capital is just above the Investment Services 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 bargaining power of channel partners in Investment Services industry
– because of the regulatory requirements in Israel, PennantPark Floating Rate Capital 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.
Interest costs
– Compare to the competition, PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital products
– To increase the profitability and margins on the products, PennantPark Floating Rate Capital needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, PennantPark Floating Rate Capital is slow explore the new channels of communication. These new channels of communication can help PennantPark Floating Rate Capital to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of PennantPark Floating Rate Capital, it seems that company is thinking out the frontier risks that can impact Investment Services industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, PennantPark Floating Rate Capital 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.
PennantPark Floating Rate Capital Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PennantPark Floating Rate Capital are -
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. PennantPark Floating Rate Capital can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital in the Investment Services industry. Now PennantPark Floating Rate Capital can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PennantPark Floating Rate Capital can use these opportunities to build new business models that can help the communities that PennantPark Floating Rate Capital operates in. Secondly it can use opportunities from government spending in Investment Services sector.
Buying journey improvements
– PennantPark Floating Rate Capital 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, PennantPark Floating Rate Capital can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help PennantPark Floating Rate Capital to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for PennantPark Floating Rate Capital 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.
Loyalty marketing
– PennantPark Floating Rate Capital 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, PennantPark Floating Rate Capital 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
– PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital to build a competitive advantage using analytics. The analytics driven competitive advantage can help PennantPark Floating Rate Capital to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help PennantPark Floating Rate Capital to increase its market reach. PennantPark Floating Rate Capital 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.
Creating value in data economy
– The success of analytics program of PennantPark Floating Rate Capital has opened avenues for new revenue streams for the organization in Investment Services industry. This can help PennantPark Floating Rate Capital to build a more holistic ecosystem for PennantPark Floating Rate Capital products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– PennantPark Floating Rate Capital can develop new processes and procedures in Investment Services 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.
Threats PennantPark Floating Rate Capital External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PennantPark Floating Rate Capital 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.
High dependence on third party suppliers
– PennantPark Floating Rate Capital 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.
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. PennantPark Floating Rate Capital 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.
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
– PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital in the Investment Services sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– PennantPark Floating Rate Capital 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.
Technology acceleration in Forth Industrial Revolution
– PennantPark Floating Rate Capital has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, PennantPark Floating Rate Capital 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.
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. PennantPark Floating Rate Capital needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.
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. PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital
– 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 PennantPark Floating Rate Capital.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Investment Services industry are lowering. It can presents PennantPark Floating Rate Capital with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the 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 PennantPark Floating Rate Capital 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.
Weighted SWOT Analysis of PennantPark Floating Rate Capital Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital 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 PennantPark Floating Rate Capital needs to make to build a sustainable competitive advantage.
