UBI Banca (0LBN) SWOT Analysis / TOWS Matrix / MBA Resources
S&Ls/Savings Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for UBI Banca (United Kingdom)
Based on various researches at Oak Spring University , UBI Banca is operating in a macro-environment that has been destablized by – technology disruption, increasing household debt because of falling income levels, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies,
increasing government debt because of Covid-19 spendings, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that UBI Banca can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the UBI Banca, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which UBI Banca 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 UBI Banca can be done for the following purposes –
1. Strategic planning of UBI Banca
2. Improving business portfolio management of UBI Banca
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a S&Ls/Savings Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of UBI Banca
Strengths of UBI Banca | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of UBI Banca are -
Innovation driven organization
– UBI Banca is one of the most innovative firm in S&Ls/Savings Banks sector.
Highly skilled collaborators
– UBI Banca has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive S&Ls/Savings Banks industry. Secondly the value chain collaborators of UBI Banca have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in S&Ls/Savings Banks industry
– UBI Banca has clearly differentiated products in the market place. This has enabled UBI Banca to fetch slight price premium compare to the competitors in the S&Ls/Savings Banks industry. The sustainable margins have also helped UBI Banca to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of UBI Banca in the Financial sector have low bargaining power. UBI Banca has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps UBI Banca to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the UBI Banca 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.
High switching costs
– The high switching costs that UBI Banca 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.
Ability to recruit top talent
– UBI Banca is one of the leading players in the S&Ls/Savings Banks industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of UBI Banca
– The covid-19 pandemic has put organizational resilience at the centre of everthing UBI Banca does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of UBI Banca comprises – understanding the underlying the factors in the S&Ls/Savings 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.
Diverse revenue streams
– UBI Banca is present in almost all the verticals within the S&Ls/Savings Banks industry. This has provided UBI Banca 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)
– UBI Banca has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – UBI Banca staying ahead in the S&Ls/Savings Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– UBI Banca 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 S&Ls/Savings Banks industry. The technology infrastructure of United Kingdom 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.
Weaknesses of UBI Banca | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of UBI Banca are -
Skills based hiring in S&Ls/Savings Banks industry
– The stress on hiring functional specialists at UBI Banca has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– From the 10K / annual statement of UBI Banca, it seems that company is thinking out the frontier risks that can impact S&Ls/Savings Banks 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.
Low market penetration in new markets
– Outside its home market of United Kingdom, UBI Banca needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
UBI Banca has a high cash cycle compare to other players in the S&Ls/Savings Banks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– UBI Banca has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of UBI Banca is dominated by functional specialists. It is not different from other players in the S&Ls/Savings Banks industry, but UBI Banca needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help UBI Banca to focus more on services in the S&Ls/Savings Banks industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As UBI Banca is one of the leading players in the S&Ls/Savings Banks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the S&Ls/Savings Banks industry in last five years.
High operating costs
– Compare to the competitors, UBI Banca has high operating costs in the S&Ls/Savings Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract UBI Banca lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, UBI Banca is slow explore the new channels of communication. These new channels of communication can help UBI Banca to provide better information regarding S&Ls/Savings Banks 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 S&Ls/Savings Banks industry, UBI Banca 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.
Ability to respond to the competition
– As the decision making is very deliberative at UBI Banca, in the dynamic environment of S&Ls/Savings Banks industry it has struggled to respond to the nimble upstart competition. UBI Banca has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
UBI Banca Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of UBI Banca are -
Use of Bitcoin and other crypto currencies for transactions in S&Ls/Savings Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for UBI Banca in the S&Ls/Savings Banks industry. Now UBI Banca can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help UBI Banca to increase its market reach. UBI Banca 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for UBI Banca in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the S&Ls/Savings Banks industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for UBI Banca 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 UBI Banca to hire the very best people irrespective of their geographical location.
Loyalty marketing
– UBI Banca 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the S&Ls/Savings Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. UBI Banca 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. UBI Banca 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.
Developing new processes and practices
– UBI Banca can develop new processes and procedures in S&Ls/Savings 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.
Using analytics as competitive advantage
– UBI Banca has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in S&Ls/Savings Banks sector. This continuous investment in analytics has enabled UBI Banca to build a competitive advantage using analytics. The analytics driven competitive advantage can help UBI Banca to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, UBI Banca is facing challenges because of the dominance of functional experts in the organization. UBI Banca can utilize new technology in the field of S&Ls/Savings Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– UBI Banca can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects UBI Banca can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, UBI Banca 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.
Learning at scale
– Online learning technologies has now opened space for UBI Banca 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.
Threats UBI Banca External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of UBI Banca 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.
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 UBI Banca business can come under increasing regulations regarding data privacy, data security, etc.
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. UBI Banca needs to understand the core reasons impacting the S&Ls/Savings 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. UBI Banca 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 acceleration in Forth Industrial Revolution
– UBI Banca has witnessed rapid integration of technology during Covid-19 in the S&Ls/Savings Banks industry. As one of the leading players in the industry, UBI Banca needs to keep up with the evolution of technology in the S&Ls/Savings Banks 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.
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.
Shortening product life cycle
– it is one of the major threat that UBI Banca is facing in S&Ls/Savings Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– UBI Banca 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 S&Ls/Savings Banks industry.
Environmental challenges
– UBI Banca 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. UBI Banca can take advantage of this fund but it will also bring new competitors in the S&Ls/Savings Banks industry.
High dependence on third party suppliers
– UBI Banca 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, UBI Banca 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 UBI Banca prominent markets.
Easy access to finance
– Easy access to finance in S&Ls/Savings Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. UBI Banca can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on UBI Banca 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 S&Ls/Savings Banks industry and other sectors.
Weighted SWOT Analysis of UBI Banca Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at UBI Banca 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 UBI Banca 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 UBI Banca 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 UBI Banca 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 UBI Banca needs to make to build a sustainable competitive advantage.