Based on various researches at Oak Spring University , Alpha Financial Markets is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing energy prices, geopolitical disruptions,
there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Alpha Financial Markets
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Alpha Financial Markets can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alpha Financial Markets, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alpha Financial 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 Alpha Financial Markets can be done for the following purposes –
1. Strategic planning of Alpha Financial Markets
2. Improving business portfolio management of Alpha Financial Markets
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alpha Financial Markets
Strengths of Alpha Financial Markets | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alpha Financial Markets are -
High brand equity
– Alpha Financial Markets has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alpha Financial Markets to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Alpha Financial Markets
– The covid-19 pandemic has put organizational resilience at the centre of everthing Alpha Financial Markets does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Alpha Financial Markets 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 Alpha Financial Markets is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Alpha Financial Markets emphasize – knowledge, initiative, and innovation.
Ability to lead change in Investment Services
– Alpha Financial Markets is one of the leading players in the Investment Services industry in United Kingdom. Over the years it has not only transformed the business landscape in the Investment Services industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Alpha Financial Markets in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Investment Services industry
– Alpha Financial 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.
Training and development
– Alpha Financial Markets 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.
Effective Research and Development (R&D)
– Alpha Financial Markets has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Alpha Financial Markets 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.
Highly skilled collaborators
– Alpha Financial Markets 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 Alpha Financial Markets have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Alpha Financial Markets in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Alpha Financial Markets is one of the leading players in the Investment 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.
Analytics focus
– Alpha Financial 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 Investment 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.
Sustainable margins compare to other players in Investment Services industry
– Alpha Financial Markets has clearly differentiated products in the market place. This has enabled Alpha Financial Markets to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped Alpha Financial Markets to invest into research and development (R&D) and innovation.
Weaknesses of Alpha Financial Markets | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alpha Financial Markets are -
Interest costs
– Compare to the competition, Alpha Financial 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.
Employees’ less understanding of Alpha Financial Markets strategy
– From the outside it seems that the employees of Alpha Financial Markets 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.
High bargaining power of channel partners in Investment Services industry
– because of the regulatory requirements in United Kingdom, Alpha Financial Markets 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.
Capital Spending Reduction
– Even during the low interest decade, Alpha Financial Markets 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.
Slow decision making process
– As mentioned earlier in the report, Alpha Financial Markets has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Investment Services industry over the last five years. Alpha Financial Markets 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.
Low market penetration in new markets
– Outside its home market of United Kingdom, Alpha Financial Markets needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Alpha Financial Markets products
– To increase the profitability and margins on the products, Alpha Financial Markets needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Investment Services industry
– The stress on hiring functional specialists at Alpha Financial 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.
High operating costs
– Compare to the competitors, Alpha Financial Markets has high operating costs in the Investment Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Alpha Financial Markets lucrative customers.
Compensation and incentives
– The revenue per employee of Alpha Financial Markets 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 cash cycle compare to competitors
Alpha Financial Markets 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.
Alpha Financial Markets Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Alpha Financial Markets are -
Creating value in data economy
– The success of analytics program of Alpha Financial Markets has opened avenues for new revenue streams for the organization in Investment Services industry. This can help Alpha Financial Markets to build a more holistic ecosystem for Alpha Financial Markets products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Alpha Financial Markets 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alpha Financial Markets can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Alpha Financial Markets 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alpha Financial Markets is facing challenges because of the dominance of functional experts in the organization. Alpha Financial Markets 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.
Using analytics as competitive advantage
– Alpha Financial Markets 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 Alpha Financial Markets to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alpha Financial 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 Investment Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Alpha Financial Markets in the Investment Services industry. Now Alpha Financial Markets can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Alpha Financial 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 Alpha Financial 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alpha Financial Markets can use these opportunities to build new business models that can help the communities that Alpha Financial Markets operates in. Secondly it can use opportunities from government spending in Investment Services sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alpha Financial 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 Alpha Financial Markets to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Alpha Financial 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.
Better consumer reach
– The expansion of the 5G network will help Alpha Financial Markets to increase its market reach. Alpha Financial 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.
Threats Alpha Financial Markets External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Alpha Financial Markets are -
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. Alpha Financial Markets can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Investment Services industry are lowering. It can presents Alpha Financial Markets with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Investment Services sector.
Stagnating economy with rate increase
– Alpha Financial 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 Investment Services industry.
Increasing wage structure of Alpha Financial Markets
– 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 Alpha Financial Markets.
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. Alpha Financial Markets 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.
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 Alpha Financial Markets in the Investment Services sector and impact the bottomline of the organization.
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. Alpha Financial Markets needs to understand the core reasons impacting the Investment Services 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.
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 Alpha Financial Markets business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Alpha Financial Markets has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, Alpha Financial Markets 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.
Shortening product life cycle
– it is one of the major threat that Alpha Financial Markets is facing in Investment Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Alpha Financial Markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Alpha Financial 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 Investment Services sector.
Weighted SWOT Analysis of Alpha Financial Markets Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Alpha Financial 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 Alpha Financial 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 Alpha Financial 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 Alpha Financial 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 Alpha Financial Markets needs to make to build a sustainable competitive advantage.