Syarikat Takaful (TAKA) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Miscellaneous)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Syarikat Takaful (Malaysia)
Based on various researches at Oak Spring University , Syarikat Takaful is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing commodity prices,
cloud computing is disrupting traditional business models, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Syarikat Takaful can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Syarikat Takaful, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Syarikat Takaful 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 Syarikat Takaful can be done for the following purposes –
1. Strategic planning of Syarikat Takaful
2. Improving business portfolio management of Syarikat Takaful
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Insurance (Miscellaneous) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Syarikat Takaful
Strengths of Syarikat Takaful | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Syarikat Takaful are -
Analytics focus
– Syarikat Takaful 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 Insurance (Miscellaneous) industry. The technology infrastructure of Malaysia 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 brand equity
– Syarikat Takaful has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Syarikat Takaful to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Syarikat Takaful has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Miscellaneous) industry. Secondly the value chain collaborators of Syarikat Takaful have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Syarikat Takaful 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.
Cross disciplinary teams
– Horizontal connected teams at the Syarikat Takaful 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.
Diverse revenue streams
– Syarikat Takaful is present in almost all the verticals within the Insurance (Miscellaneous) industry. This has provided Syarikat Takaful 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)
– Syarikat Takaful has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Syarikat Takaful staying ahead in the Insurance (Miscellaneous) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Syarikat Takaful has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Syarikat Takaful 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.
Operational resilience
– The operational resilience strategy of Syarikat Takaful comprises – understanding the underlying the factors in the Insurance (Miscellaneous) 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.
Superior customer experience
– The customer experience strategy of Syarikat Takaful in Insurance (Miscellaneous) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Insurance (Miscellaneous) industry
- digital transformation varies from industry to industry. For Syarikat Takaful digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Syarikat Takaful 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.
Sustainable margins compare to other players in Insurance (Miscellaneous) industry
– Syarikat Takaful has clearly differentiated products in the market place. This has enabled Syarikat Takaful to fetch slight price premium compare to the competitors in the Insurance (Miscellaneous) industry. The sustainable margins have also helped Syarikat Takaful to invest into research and development (R&D) and innovation.
Weaknesses of Syarikat Takaful | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Syarikat Takaful are -
High cash cycle compare to competitors
Syarikat Takaful has a high cash cycle compare to other players in the Insurance (Miscellaneous) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Malaysia, Syarikat Takaful needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Syarikat Takaful 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.
Lack of clear differentiation of Syarikat Takaful products
– To increase the profitability and margins on the products, Syarikat Takaful 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 Syarikat Takaful needs to have more collaboration between its sales team and marketing team. Sales professionals in the Insurance (Miscellaneous) industry have deep experience in developing customer relationships. Marketing department at Syarikat Takaful can leverage the sales team experience to cultivate customer relationships as Syarikat Takaful is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Syarikat Takaful has high operating costs in the Insurance (Miscellaneous) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Syarikat Takaful lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Syarikat Takaful is dominated by functional specialists. It is not different from other players in the Insurance (Miscellaneous) industry, but Syarikat Takaful needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Syarikat Takaful to focus more on services in the Insurance (Miscellaneous) industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Syarikat Takaful, it seems that company is thinking out the frontier risks that can impact Insurance (Miscellaneous) 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.
Workers concerns about automation
– As automation is fast increasing in the Insurance (Miscellaneous) industry, Syarikat Takaful 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.
Compensation and incentives
– The revenue per employee of Syarikat Takaful is just above the Insurance (Miscellaneous) 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, Syarikat Takaful is slow explore the new channels of communication. These new channels of communication can help Syarikat Takaful to provide better information regarding Insurance (Miscellaneous) products and services. It can also build an online community to further reach out to potential customers.
Syarikat Takaful Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Syarikat Takaful are -
Creating value in data economy
– The success of analytics program of Syarikat Takaful has opened avenues for new revenue streams for the organization in Insurance (Miscellaneous) industry. This can help Syarikat Takaful to build a more holistic ecosystem for Syarikat Takaful products in the Insurance (Miscellaneous) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Syarikat Takaful 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 Insurance (Miscellaneous) industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Syarikat Takaful can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Syarikat Takaful can use the latest technology developments to improve its manufacturing and designing process in Insurance (Miscellaneous) 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 Syarikat Takaful in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Insurance (Miscellaneous) industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Syarikat Takaful can use these opportunities to build new business models that can help the communities that Syarikat Takaful operates in. Secondly it can use opportunities from government spending in Insurance (Miscellaneous) sector.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Miscellaneous) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Syarikat Takaful in the Insurance (Miscellaneous) industry. Now Syarikat Takaful can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Syarikat Takaful 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 Syarikat Takaful to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Syarikat Takaful 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 Syarikat Takaful 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, Syarikat Takaful 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 Syarikat Takaful to increase its market reach. Syarikat Takaful 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.
Loyalty marketing
– Syarikat Takaful 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.
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. Syarikat Takaful can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Syarikat Takaful External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Syarikat Takaful 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Miscellaneous) industry are lowering. It can presents Syarikat Takaful with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Miscellaneous) sector.
Stagnating economy with rate increase
– Syarikat Takaful 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 Insurance (Miscellaneous) industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Syarikat Takaful 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 Syarikat Takaful prominent markets.
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 Syarikat Takaful in the Insurance (Miscellaneous) sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Syarikat Takaful may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Insurance (Miscellaneous) sector.
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. Syarikat Takaful needs to understand the core reasons impacting the Insurance (Miscellaneous) industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Syarikat Takaful 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.
Environmental challenges
– Syarikat Takaful 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. Syarikat Takaful can take advantage of this fund but it will also bring new competitors in the Insurance (Miscellaneous) industry.
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. Syarikat Takaful 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
– Syarikat Takaful has witnessed rapid integration of technology during Covid-19 in the Insurance (Miscellaneous) industry. As one of the leading players in the industry, Syarikat Takaful needs to keep up with the evolution of technology in the Insurance (Miscellaneous) 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.
Regulatory challenges
– Syarikat Takaful 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 Insurance (Miscellaneous) industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Syarikat Takaful in Insurance (Miscellaneous) industry. The Insurance (Miscellaneous) 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 Syarikat Takaful Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Syarikat Takaful 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 Syarikat Takaful 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 Syarikat Takaful 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 Syarikat Takaful 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 Syarikat Takaful needs to make to build a sustainable competitive advantage.