Based on various researches at Oak Spring University , Aberdeen Emerging Markets is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization,
supply chains are disrupted by pandemic , geopolitical disruptions, etc
Introduction to SWOT Analysis of Aberdeen Emerging Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Aberdeen Emerging Markets can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aberdeen Emerging Markets, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aberdeen Emerging Markets 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 Aberdeen Emerging Markets can be done for the following purposes –
1. Strategic planning of Aberdeen Emerging Markets
2. Improving business portfolio management of Aberdeen Emerging Markets
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Misc. Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aberdeen Emerging Markets
Strengths of Aberdeen Emerging Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aberdeen Emerging Markets are -
Strong track record of project management in the Misc. Financial Services industry
– Aberdeen Emerging Markets 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
– Aberdeen Emerging Markets is one of the leading players in the Misc. Financial Services 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.
Superior customer experience
– The customer experience strategy of Aberdeen Emerging Markets in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Aberdeen Emerging Markets 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 Misc. Financial Services 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.
High switching costs
– The high switching costs that Aberdeen Emerging Markets 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.
Innovation driven organization
– Aberdeen Emerging Markets is one of the most innovative firm in Misc. Financial Services sector.
Sustainable margins compare to other players in Misc. Financial Services industry
– Aberdeen Emerging Markets has clearly differentiated products in the market place. This has enabled Aberdeen Emerging Markets to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Aberdeen Emerging Markets to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Aberdeen Emerging Markets 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.
Low bargaining power of suppliers
– Suppliers of Aberdeen Emerging Markets in the Financial sector have low bargaining power. Aberdeen Emerging Markets has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Aberdeen Emerging Markets to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Aberdeen Emerging Markets
– The covid-19 pandemic has put organizational resilience at the centre of everthing Aberdeen Emerging Markets does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Aberdeen Emerging Markets has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Aberdeen Emerging Markets to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Aberdeen Emerging Markets has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Aberdeen Emerging Markets 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.
Weaknesses of Aberdeen Emerging Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aberdeen Emerging Markets are -
Compensation and incentives
– The revenue per employee of Aberdeen Emerging Markets is just above the Misc. Financial 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Aberdeen Emerging Markets is slow explore the new channels of communication. These new channels of communication can help Aberdeen Emerging Markets to provide better information regarding Misc. Financial Services products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Aberdeen Emerging Markets 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.
High cash cycle compare to competitors
Aberdeen Emerging Markets has a high cash cycle compare to other players in the Misc. Financial 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 Aberdeen Emerging Markets is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Aberdeen Emerging Markets needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Aberdeen Emerging Markets to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Aberdeen Emerging Markets needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Financial Services industry have deep experience in developing customer relationships. Marketing department at Aberdeen Emerging Markets can leverage the sales team experience to cultivate customer relationships as Aberdeen Emerging Markets is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, Aberdeen Emerging Markets 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.
Low market penetration in new markets
– Outside its home market of United Kingdom, Aberdeen Emerging Markets needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Misc. Financial Services industry
– The stress on hiring functional specialists at Aberdeen Emerging Markets 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.
Need for greater diversity
– Aberdeen Emerging Markets 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.
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 Aberdeen Emerging Markets supply chain. Even after few cautionary changes, Aberdeen Emerging Markets is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Aberdeen Emerging Markets vulnerable to further global disruptions in South East Asia.
Aberdeen Emerging Markets Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Aberdeen Emerging Markets are -
Better consumer reach
– The expansion of the 5G network will help Aberdeen Emerging Markets to increase its market reach. Aberdeen Emerging Markets 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Aberdeen Emerging Markets 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. Aberdeen Emerging Markets 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, Aberdeen Emerging Markets 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 Aberdeen Emerging Markets 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.
Buying journey improvements
– Aberdeen Emerging Markets can improve the customer journey of consumers in the Misc. Financial 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.
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. Aberdeen Emerging Markets can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Aberdeen Emerging Markets 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.
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 Aberdeen Emerging Markets 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 Aberdeen Emerging Markets 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 Misc. Financial Services industry.
Using analytics as competitive advantage
– Aberdeen Emerging Markets has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Financial Services sector. This continuous investment in analytics has enabled Aberdeen Emerging Markets to build a competitive advantage using analytics. The analytics driven competitive advantage can help Aberdeen Emerging Markets to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Misc. Financial Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Aberdeen Emerging Markets in the Misc. Financial Services industry. Now Aberdeen Emerging Markets can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Aberdeen Emerging Markets has opened avenues for new revenue streams for the organization in Misc. Financial Services industry. This can help Aberdeen Emerging Markets to build a more holistic ecosystem for Aberdeen Emerging Markets products in the Misc. Financial Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aberdeen Emerging Markets 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 Aberdeen Emerging Markets to hire the very best people irrespective of their geographical location.
Threats Aberdeen Emerging Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Aberdeen Emerging Markets 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.
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 Aberdeen Emerging Markets in the Misc. Financial Services sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Aberdeen Emerging Markets.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Aberdeen Emerging Markets 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 Aberdeen Emerging Markets prominent markets.
Easy access to finance
– Easy access to finance in Misc. Financial Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aberdeen Emerging Markets can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Aberdeen Emerging Markets 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.
Shortening product life cycle
– it is one of the major threat that Aberdeen Emerging Markets is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Aberdeen Emerging Markets 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 Misc. Financial Services 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 Aberdeen Emerging Markets business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Aberdeen Emerging Markets may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Financial Services sector.
Consumer confidence and its impact on Aberdeen Emerging Markets 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 Misc. Financial Services industry and other sectors.
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. Aberdeen Emerging Markets needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.
Regulatory challenges
– Aberdeen Emerging Markets 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 Misc. Financial Services industry regulations.
Weighted SWOT Analysis of Aberdeen Emerging Markets Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Aberdeen Emerging Markets 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 Aberdeen Emerging Markets 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 Aberdeen Emerging Markets 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 Aberdeen Emerging Markets 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 Aberdeen Emerging Markets needs to make to build a sustainable competitive advantage.
