SWOT Analysis / TOWS Matrix for ITAUUNIBANCOPN EB N1 (Brazil)
Based on various researches at Oak Spring University , ITAUUNIBANCOPN EB N1 is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, geopolitical disruptions,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of ITAUUNIBANCOPN EB N1
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ITAUUNIBANCOPN EB N1 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ITAUUNIBANCOPN EB N1, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 can be done for the following purposes –
1. Strategic planning of ITAUUNIBANCOPN EB N1
2. Improving business portfolio management of ITAUUNIBANCOPN EB N1
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 ITAUUNIBANCOPN EB N1
Strengths of ITAUUNIBANCOPN EB N1 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ITAUUNIBANCOPN EB N1 are -
Training and development
– ITAUUNIBANCOPN EB N1 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.
Ability to recruit top talent
– ITAUUNIBANCOPN EB N1 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.
Innovation driven organization
– ITAUUNIBANCOPN EB N1 is one of the most innovative firm in Regional Banks sector.
Operational resilience
– The operational resilience strategy of ITAUUNIBANCOPN EB N1 comprises – understanding the underlying the factors in the Regional 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.
Highly skilled collaborators
– ITAUUNIBANCOPN EB N1 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Regional Banks industry. Secondly the value chain collaborators of ITAUUNIBANCOPN EB N1 have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Regional Banks
– ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 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 Regional Banks industry
– ITAUUNIBANCOPN EB N1 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that ITAUUNIBANCOPN EB N1 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
– ITAUUNIBANCOPN EB N1 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ITAUUNIBANCOPN EB N1 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.
High brand equity
– ITAUUNIBANCOPN EB N1 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ITAUUNIBANCOPN EB N1 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of ITAUUNIBANCOPN EB N1
– The covid-19 pandemic has put organizational resilience at the centre of everthing ITAUUNIBANCOPN EB N1 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– ITAUUNIBANCOPN EB N1 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ITAUUNIBANCOPN EB N1 staying ahead in the Regional Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of ITAUUNIBANCOPN EB N1 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ITAUUNIBANCOPN EB N1 are -
Employees’ less understanding of ITAUUNIBANCOPN EB N1 strategy
– From the outside it seems that the employees of ITAUUNIBANCOPN EB N1 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.
Interest costs
– Compare to the competition, ITAUUNIBANCOPN EB N1 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.
Ability to respond to the competition
– As the decision making is very deliberative at ITAUUNIBANCOPN EB N1, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. ITAUUNIBANCOPN EB N1 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of ITAUUNIBANCOPN EB N1 is dominated by functional specialists. It is not different from other players in the Regional Banks industry, but ITAUUNIBANCOPN EB N1 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ITAUUNIBANCOPN EB N1 to focus more on services in the Regional Banks industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Brazil, ITAUUNIBANCOPN EB N1 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Regional Banks industry
– because of the regulatory requirements in Brazil, ITAUUNIBANCOPN EB N1 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.
Lack of clear differentiation of ITAUUNIBANCOPN EB N1 products
– To increase the profitability and margins on the products, ITAUUNIBANCOPN EB N1 needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 can leverage the sales team experience to cultivate customer relationships as ITAUUNIBANCOPN EB N1 is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, ITAUUNIBANCOPN EB N1 has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Regional Banks industry over the last five years. ITAUUNIBANCOPN EB N1 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.
Skills based hiring in Regional Banks industry
– The stress on hiring functional specialists at ITAUUNIBANCOPN EB N1 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.
Compensation and incentives
– The revenue per employee of ITAUUNIBANCOPN EB N1 is just above the Regional Banks 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.
ITAUUNIBANCOPN EB N1 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ITAUUNIBANCOPN EB N1 are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ITAUUNIBANCOPN EB N1 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help ITAUUNIBANCOPN EB N1 to increase its market reach. ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 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.
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. ITAUUNIBANCOPN EB N1 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. ITAUUNIBANCOPN EB N1 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.
Loyalty marketing
– ITAUUNIBANCOPN EB N1 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.
Building a culture of innovation
– managers at ITAUUNIBANCOPN EB N1 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.
Leveraging digital technologies
– ITAUUNIBANCOPN EB N1 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.
Developing new processes and practices
– ITAUUNIBANCOPN EB N1 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 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.
Creating value in data economy
– The success of analytics program of ITAUUNIBANCOPN EB N1 has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help ITAUUNIBANCOPN EB N1 to build a more holistic ecosystem for ITAUUNIBANCOPN EB N1 products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– ITAUUNIBANCOPN EB N1 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Regional Banks sector. This continuous investment in analytics has enabled ITAUUNIBANCOPN EB N1 to build a competitive advantage using analytics. The analytics driven competitive advantage can help ITAUUNIBANCOPN EB N1 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. ITAUUNIBANCOPN EB N1 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats ITAUUNIBANCOPN EB N1 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ITAUUNIBANCOPN EB N1 are -
Consumer confidence and its impact on ITAUUNIBANCOPN EB N1 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.
High dependence on third party suppliers
– ITAUUNIBANCOPN EB N1 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 prominent markets.
Environmental challenges
– ITAUUNIBANCOPN EB N1 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. ITAUUNIBANCOPN EB N1 can take advantage of this fund but it will also bring new competitors in the Regional Banks industry.
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 ITAUUNIBANCOPN EB N1 in the Regional Banks sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents ITAUUNIBANCOPN EB N1 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
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 ITAUUNIBANCOPN EB N1 business can come under increasing regulations regarding data privacy, data security, etc.
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 ITAUUNIBANCOPN EB N1 is facing in Regional Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of ITAUUNIBANCOPN EB N1
– 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 ITAUUNIBANCOPN EB N1.
Easy access to finance
– Easy access to finance in Regional Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. ITAUUNIBANCOPN EB N1 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ITAUUNIBANCOPN EB N1 in Regional Banks industry. The Regional Banks industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of ITAUUNIBANCOPN EB N1 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 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 ITAUUNIBANCOPN EB N1 needs to make to build a sustainable competitive advantage.
