ITAUUNIBANCO ON (ITUB3) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for ITAUUNIBANCO ON (Brazil)
Based on various researches at Oak Spring University , ITAUUNIBANCO ON is operating in a macro-environment that has been destablized by – there is backlash against globalization, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ITAUUNIBANCO ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ITAUUNIBANCO ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ITAUUNIBANCO ON 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 ITAUUNIBANCO ON can be done for the following purposes –
1. Strategic planning of ITAUUNIBANCO ON
2. Improving business portfolio management of ITAUUNIBANCO ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ITAUUNIBANCO ON
Strengths of ITAUUNIBANCO ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ITAUUNIBANCO ON are -
Diverse revenue streams
– ITAUUNIBANCO ON is present in almost all the verticals within the Regional Banks industry. This has provided ITAUUNIBANCO ON 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.
Strong track record of project management in the Regional Banks industry
– ITAUUNIBANCO ON 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 Regional Banks
– ITAUUNIBANCO ON is one of the leading players in the Regional Banks industry in Brazil. Over the years it has not only transformed the business landscape in the Regional Banks industry in Brazil but also across the existing markets. The ability to lead change has enabled ITAUUNIBANCO ON in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– ITAUUNIBANCO ON has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ITAUUNIBANCO ON 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.
Learning organization
- ITAUUNIBANCO ON 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 ITAUUNIBANCO ON is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ITAUUNIBANCO ON emphasize – knowledge, initiative, and innovation.
Digital Transformation in Regional Banks industry
- digital transformation varies from industry to industry. For ITAUUNIBANCO ON digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ITAUUNIBANCO ON 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.
Innovation driven organization
– ITAUUNIBANCO ON is one of the most innovative firm in Regional Banks sector.
High brand equity
– ITAUUNIBANCO ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ITAUUNIBANCO ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Regional Banks industry
– ITAUUNIBANCO ON has clearly differentiated products in the market place. This has enabled ITAUUNIBANCO ON to fetch slight price premium compare to the competitors in the Regional Banks industry. The sustainable margins have also helped ITAUUNIBANCO ON to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of ITAUUNIBANCO ON in the Financial sector have low bargaining power. ITAUUNIBANCO ON has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ITAUUNIBANCO ON to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– ITAUUNIBANCO ON is one of the leading players in the Regional Banks industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the ITAUUNIBANCO ON 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.
Weaknesses of ITAUUNIBANCO ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ITAUUNIBANCO ON are -
Products dominated business model
– Even though ITAUUNIBANCO ON has some of the most successful models in the Regional Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. ITAUUNIBANCO ON should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, ITAUUNIBANCO ON 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 Regional Banks industry using digital technology.
Need for greater diversity
– ITAUUNIBANCO ON 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.
Low market penetration in new markets
– Outside its home market of Brazil, ITAUUNIBANCO ON needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
ITAUUNIBANCO ON has a high cash cycle compare to other players in the Regional 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.
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 ITAUUNIBANCO ON supply chain. Even after few cautionary changes, ITAUUNIBANCO ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left ITAUUNIBANCO ON vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, ITAUUNIBANCO ON has high operating costs in the Regional Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract ITAUUNIBANCO ON lucrative customers.
High bargaining power of channel partners in Regional Banks industry
– because of the regulatory requirements in Brazil, ITAUUNIBANCO ON 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 Regional Banks industry.
Aligning sales with marketing
– From the outside it seems that ITAUUNIBANCO ON needs to have more collaboration between its sales team and marketing team. Sales professionals in the Regional Banks industry have deep experience in developing customer relationships. Marketing department at ITAUUNIBANCO ON can leverage the sales team experience to cultivate customer relationships as ITAUUNIBANCO ON is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of ITAUUNIBANCO ON, it seems that company is thinking out the frontier risks that can impact Regional 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.
Increasing silos among functional specialists
– The organizational structure of ITAUUNIBANCO ON is dominated by functional specialists. It is not different from other players in the Regional Banks industry, but ITAUUNIBANCO ON needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ITAUUNIBANCO ON to focus more on services in the Regional Banks industry rather than just following the product oriented approach.
ITAUUNIBANCO ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ITAUUNIBANCO ON are -
Leveraging digital technologies
– ITAUUNIBANCO ON 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Regional Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ITAUUNIBANCO ON 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. ITAUUNIBANCO ON 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ITAUUNIBANCO ON can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, ITAUUNIBANCO ON can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help ITAUUNIBANCO ON to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, ITAUUNIBANCO ON 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ITAUUNIBANCO ON can use these opportunities to build new business models that can help the communities that ITAUUNIBANCO ON operates in. Secondly it can use opportunities from government spending in Regional Banks sector.
Use of Bitcoin and other crypto currencies for transactions in Regional Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for ITAUUNIBANCO ON in the Regional Banks industry. Now ITAUUNIBANCO ON can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– ITAUUNIBANCO ON can develop new processes and procedures in Regional 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.
Manufacturing automation
– ITAUUNIBANCO ON can use the latest technology developments to improve its manufacturing and designing process in Regional Banks 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for ITAUUNIBANCO ON in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Regional Banks industry, and it will provide faster access to the consumers.
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 ITAUUNIBANCO ON 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.
Learning at scale
– Online learning technologies has now opened space for ITAUUNIBANCO ON 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.
Building a culture of innovation
– managers at ITAUUNIBANCO ON 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 Regional Banks industry.
Threats ITAUUNIBANCO ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ITAUUNIBANCO ON are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, ITAUUNIBANCO ON may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Regional Banks sector.
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.
Consumer confidence and its impact on ITAUUNIBANCO ON 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 Regional Banks 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 ITAUUNIBANCO ON business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– ITAUUNIBANCO ON has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, ITAUUNIBANCO ON needs to keep up with the evolution of technology in the Regional 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.
Increasing wage structure of ITAUUNIBANCO ON
– 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 ITAUUNIBANCO ON.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents ITAUUNIBANCO ON with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
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 ITAUUNIBANCO ON in the Regional Banks sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ITAUUNIBANCO ON 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 ITAUUNIBANCO ON prominent markets.
Regulatory challenges
– ITAUUNIBANCO ON 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 Regional Banks industry regulations.
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. ITAUUNIBANCO ON 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.
Shortening product life cycle
– it is one of the major threat that ITAUUNIBANCO ON is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of ITAUUNIBANCO ON Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ITAUUNIBANCO ON 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 ITAUUNIBANCO ON 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 ITAUUNIBANCO ON 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 ITAUUNIBANCO ON 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 ITAUUNIBANCO ON needs to make to build a sustainable competitive advantage.