SWOT Analysis / TOWS Matrix for PLT Financial Services (Israel)
Based on various researches at Oak Spring University , PLT Financial Services is operating in a macro-environment that has been destablized by – there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, wage bills are increasing, increasing energy prices,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of PLT Financial Services
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PLT Financial Services can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PLT Financial Services, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PLT Financial Services 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 PLT Financial Services can be done for the following purposes –
1. Strategic planning of PLT Financial Services
2. Improving business portfolio management of PLT Financial Services
3. Assessing feasibility of the new initiative in Israel
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PLT Financial Services
Strengths of PLT Financial Services | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PLT Financial Services are -
Digital Transformation in industry
- digital transformation varies from industry to industry. For PLT Financial Services digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. PLT Financial Services 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.
Sustainable margins compare to other players in industry
– PLT Financial Services has clearly differentiated products in the market place. This has enabled PLT Financial Services to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped PLT Financial Services to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– PLT Financial Services has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of PLT Financial Services have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– PLT Financial Services 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 industry. The technology infrastructure of Israel 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.
Learning organization
- PLT Financial Services 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 PLT Financial Services is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PLT Financial Services emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the PLT Financial Services 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.
Diverse revenue streams
– PLT Financial Services is present in almost all the verticals within the industry. This has provided PLT Financial Services 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.
Training and development
– PLT Financial Services has one of the best training and development program in 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.
High switching costs
– The high switching costs that PLT Financial Services 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.
Successful track record of launching new products
– PLT Financial Services has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. PLT Financial Services 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.
Ability to lead change in
– PLT Financial Services is one of the leading players in the industry in Israel. Over the years it has not only transformed the business landscape in the industry in Israel but also across the existing markets. The ability to lead change has enabled PLT Financial Services in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– PLT Financial Services has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PLT Financial Services staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of PLT Financial Services | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PLT Financial Services are -
Slow decision making process
– As mentioned earlier in the report, PLT Financial Services has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. PLT Financial Services 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.
Capital Spending Reduction
– Even during the low interest decade, PLT Financial Services 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 industry using digital technology.
Lack of clear differentiation of PLT Financial Services products
– To increase the profitability and margins on the products, PLT Financial Services needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on PLT Financial Services ‘s star products
– The top 2 products and services of PLT Financial Services still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though PLT Financial Services has relatively successful track record of launching new products.
High bargaining power of channel partners in industry
– because of the regulatory requirements in Israel, PLT Financial Services 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 industry.
Compensation and incentives
– The revenue per employee of PLT Financial Services is just above the 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.
Products dominated business model
– Even though PLT Financial Services has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. PLT Financial Services should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the industry, PLT Financial Services 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 cash cycle compare to competitors
PLT Financial Services has a high cash cycle compare to other players in the 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 PLT Financial Services is dominated by functional specialists. It is not different from other players in the industry, but PLT Financial Services needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PLT Financial Services to focus more on services in the industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As PLT Financial Services is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
PLT Financial Services Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PLT Financial Services are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. PLT Financial Services 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. PLT Financial Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, PLT Financial Services 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 PLT Financial Services has opened avenues for new revenue streams for the organization in industry. This can help PLT Financial Services to build a more holistic ecosystem for PLT Financial Services products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– PLT Financial Services can improve the customer journey of consumers in the 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for PLT Financial Services in the industry. Now PLT Financial Services can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– PLT Financial Services can develop new processes and procedures in 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.
Manufacturing automation
– PLT Financial Services can use the latest technology developments to improve its manufacturing and designing process in 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects PLT Financial Services can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 PLT Financial Services 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.
Building a culture of innovation
– managers at PLT Financial Services 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 industry.
Learning at scale
– Online learning technologies has now opened space for PLT Financial Services 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, PLT Financial Services is facing challenges because of the dominance of functional experts in the organization. PLT Financial Services can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help PLT Financial Services to increase its market reach. PLT Financial Services 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.
Threats PLT Financial Services External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PLT Financial Services are -
Stagnating economy with rate increase
– PLT Financial Services 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 industry.
Regulatory challenges
– PLT Financial Services 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 industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents PLT Financial Services with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– PLT Financial Services 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 wage structure of PLT Financial Services
– 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 PLT Financial Services.
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 PLT Financial Services business can come under increasing regulations regarding data privacy, data security, etc.
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 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. PLT Financial Services needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, PLT Financial Services 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 PLT Financial Services prominent markets.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. PLT Financial Services can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 PLT Financial Services in the sector and impact the bottomline of the organization.
Consumer confidence and its impact on PLT Financial Services 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 industry and other sectors.
Weighted SWOT Analysis of PLT Financial Services Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PLT Financial Services 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 PLT Financial Services 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 PLT Financial Services 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 PLT Financial Services 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 PLT Financial Services needs to make to build a sustainable competitive advantage.