SWOT Analysis / TOWS Matrix for Opal Balance (Israel)
Based on various researches at Oak Spring University , Opal Balance is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing energy prices, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Opal Balance can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Opal Balance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Opal Balance 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 Opal Balance can be done for the following purposes –
1. Strategic planning of Opal Balance
2. Improving business portfolio management of Opal Balance
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 Opal Balance
Strengths of Opal Balance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Opal Balance are -
High brand equity
– Opal Balance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Opal Balance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Opal Balance in the Financial sector have low bargaining power. Opal Balance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Opal Balance to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Investment Services industry
– Opal Balance 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 lead change in Investment Services
– Opal Balance 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 Opal Balance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Opal Balance is one of the most innovative firm in Investment Services sector.
Organizational Resilience of Opal Balance
– The covid-19 pandemic has put organizational resilience at the centre of everthing Opal Balance does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Opal Balance has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Opal Balance 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.
Operational resilience
– The operational resilience strategy of Opal Balance 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.
Training and development
– Opal Balance 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.
Sustainable margins compare to other players in Investment Services industry
– Opal Balance has clearly differentiated products in the market place. This has enabled Opal Balance to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped Opal Balance to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Opal Balance 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 Opal Balance have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Opal Balance 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.
Weaknesses of Opal Balance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Opal Balance are -
Lack of clear differentiation of Opal Balance products
– To increase the profitability and margins on the products, Opal Balance needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Investment Services industry
– because of the regulatory requirements in Israel, Opal Balance 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.
High dependence on Opal Balance ‘s star products
– The top 2 products and services of Opal Balance 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 Opal Balance has relatively successful track record of launching new products.
Employees’ less understanding of Opal Balance strategy
– From the outside it seems that the employees of Opal Balance 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.
Low market penetration in new markets
– Outside its home market of Israel, Opal Balance needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Opal Balance 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Opal Balance supply chain. Even after few cautionary changes, Opal Balance is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Opal Balance vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Opal Balance 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.
Increasing silos among functional specialists
– The organizational structure of Opal Balance is dominated by functional specialists. It is not different from other players in the Investment Services industry, but Opal Balance needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Opal Balance to focus more on services in the Investment Services industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Opal Balance 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Opal Balance is slow explore the new channels of communication. These new channels of communication can help Opal Balance to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.
Opal Balance Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Opal Balance are -
Creating value in data economy
– The success of analytics program of Opal Balance has opened avenues for new revenue streams for the organization in Investment Services industry. This can help Opal Balance to build a more holistic ecosystem for Opal Balance products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Opal Balance in the Investment Services industry. Now Opal Balance can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Opal Balance 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 Opal Balance to hire the very best people irrespective of their geographical location.
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. Opal Balance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Opal Balance 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 Opal Balance to build a competitive advantage using analytics. The analytics driven competitive advantage can help Opal Balance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Opal Balance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Opal Balance can use the latest technology developments to improve its manufacturing and designing process in Investment Services 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Opal Balance can use these opportunities to build new business models that can help the communities that Opal Balance operates in. Secondly it can use opportunities from government spending in Investment Services sector.
Developing new processes and practices
– Opal Balance 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Opal Balance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Opal Balance 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.
Building a culture of innovation
– managers at Opal Balance 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Opal Balance is facing challenges because of the dominance of functional experts in the organization. Opal Balance 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.
Threats Opal Balance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Opal Balance are -
High dependence on third party suppliers
– Opal Balance 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Opal Balance 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 Opal Balance prominent markets.
Consumer confidence and its impact on Opal Balance 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.
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 Opal Balance business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Opal Balance 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. Opal Balance can take advantage of this fund but it will also bring new competitors in the Investment Services industry.
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. Opal Balance 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Opal Balance 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.
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. Opal Balance needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Investment Services industry are lowering. It can presents Opal Balance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Investment Services sector.
Increasing wage structure of Opal Balance
– 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 Opal Balance.
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 Opal Balance in the Investment Services sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Opal Balance has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, Opal Balance 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Opal Balance Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Opal Balance 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 Opal Balance 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 Opal Balance 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 Opal Balance 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 Opal Balance needs to make to build a sustainable competitive advantage.