K N Kenanga (KNNK) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for K N Kenanga (Malaysia)

Based on various researches at Oak Spring University , K N Kenanga is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing energy prices, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, etc

---

---

---

---

Introduction to SWOT Analysis of K N Kenanga

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that K N Kenanga can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the K N Kenanga, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which K N Kenanga 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 K N Kenanga can be done for the following purposes –
1. Strategic planning of K N Kenanga
2. Improving business portfolio management of K N Kenanga
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of K N Kenanga

---

Strengths of K N Kenanga | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of K N Kenanga are -

High switching costs

– The high switching costs that K N Kenanga 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.

Operational resilience

– The operational resilience strategy of K N Kenanga comprises – understanding the underlying the factors in the Investment Services 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.

Innovation driven organization

– K N Kenanga is one of the most innovative firm in Investment Services sector.

Cross disciplinary teams

– Horizontal connected teams at the K N Kenanga 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.

High brand equity

– K N Kenanga has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled K N Kenanga to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– K N Kenanga is present in almost all the verticals within the Investment Services industry. This has provided K N Kenanga 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 Investment Services industry

– K N Kenanga is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– K N Kenanga 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 K N Kenanga have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– K N Kenanga has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – K N Kenanga 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.

Training and development

– K N Kenanga 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 lead change in Investment Services

– K N Kenanga is one of the leading players in the Investment Services industry in Malaysia. Over the years it has not only transformed the business landscape in the Investment Services industry in Malaysia but also across the existing markets. The ability to lead change has enabled K N Kenanga in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Superior customer experience

– The customer experience strategy of K N Kenanga in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

---

---

Weaknesses of K N Kenanga | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of K N Kenanga are -

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 K N Kenanga supply chain. Even after few cautionary changes, K N Kenanga is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left K N Kenanga vulnerable to further global disruptions in South East Asia.

Employees’ less understanding of K N Kenanga strategy

– From the outside it seems that the employees of K N Kenanga 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 Malaysia, K N Kenanga 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.

Increasing silos among functional specialists

– The organizational structure of K N Kenanga is dominated by functional specialists. It is not different from other players in the Investment Services industry, but K N Kenanga needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help K N Kenanga to focus more on services in the Investment Services industry rather than just following the product oriented approach.

Skills based hiring in Investment Services industry

– The stress on hiring functional specialists at K N Kenanga 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.

Aligning sales with marketing

– From the outside it seems that K N Kenanga needs to have more collaboration between its sales team and marketing team. Sales professionals in the Investment Services industry have deep experience in developing customer relationships. Marketing department at K N Kenanga can leverage the sales team experience to cultivate customer relationships as K N Kenanga is planning to shift buying processes online.

Slow to strategic competitive environment developments

– As K N Kenanga is one of the leading players in the Investment Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Investment Services industry in last five years.

High dependence on K N Kenanga ‘s star products

– The top 2 products and services of K N Kenanga still accounts for major business revenue. This dependence on star products in Investment Services industry has resulted into insufficient focus on developing new products, even though K N Kenanga has relatively successful track record of launching new products.

Interest costs

– Compare to the competition, K N Kenanga 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.

Slow decision making process

– As mentioned earlier in the report, K N Kenanga 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. K N Kenanga 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, K N Kenanga is slow explore the new channels of communication. These new channels of communication can help K N Kenanga to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.

---

K N Kenanga Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of K N Kenanga are -

Building a culture of innovation

– managers at K N Kenanga 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 Investment Services industry.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Investment Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. K N Kenanga 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. K N Kenanga 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.

Developing new processes and practices

– K N Kenanga 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for K N Kenanga in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Investment Services industry, and it will provide faster access to the consumers.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for K N Kenanga 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 K N Kenanga to hire the very best people irrespective of their geographical location.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Investment Services industry, but it has also influenced the consumer preferences. K N Kenanga can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for K N Kenanga 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.

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 K N Kenanga in the Investment Services industry. Now K N Kenanga 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 K N Kenanga has opened avenues for new revenue streams for the organization in Investment Services industry. This can help K N Kenanga to build a more holistic ecosystem for K N Kenanga products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, K N Kenanga can use these opportunities to build new business models that can help the communities that K N Kenanga operates in. Secondly it can use opportunities from government spending in Investment Services sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, K N Kenanga 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 K N Kenanga to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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 K N Kenanga 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.

Loyalty marketing

– K N Kenanga 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.

---

Threats K N Kenanga External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of K N Kenanga 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.

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. K N Kenanga can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. K N Kenanga needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.

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 K N Kenanga in the Investment Services sector and impact the bottomline of the organization.

Environmental challenges

– K N Kenanga 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. K N Kenanga can take advantage of this fund but it will also bring new competitors in the Investment Services industry.

Consumer confidence and its impact on K N Kenanga 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 Investment Services industry and other sectors.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for K N Kenanga in Investment Services industry. The Investment Services 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, K N Kenanga 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 K N Kenanga prominent markets.

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 K N Kenanga business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of K N Kenanga

– 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 K N Kenanga.

Shortening product life cycle

– it is one of the major threat that K N Kenanga is facing in Investment Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Regulatory challenges

– K N Kenanga 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 Investment Services industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, K N Kenanga 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 K N Kenanga Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at K N Kenanga 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 K N Kenanga 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 K N Kenanga 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 K N Kenanga 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 K N Kenanga needs to make to build a sustainable competitive advantage.

--- ---