IRB Brasil Resseguros (IRBR3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for IRB Brasil Resseguros (Brazil)

Based on various researches at Oak Spring University , IRB Brasil Resseguros is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing commodity prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, there is backlash against globalization, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, technology disruption, talent flight as more people leaving formal jobs, etc

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Introduction to SWOT Analysis of IRB Brasil Resseguros

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that IRB Brasil Resseguros can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the IRB Brasil Resseguros, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which IRB Brasil Resseguros 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of IRB Brasil Resseguros can be done for the following purposes –
1. Strategic planning of IRB Brasil Resseguros
2. Improving business portfolio management of IRB Brasil Resseguros
3. Assessing feasibility of the new initiative in Brazil
4. Making a Insurance (Life) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of IRB Brasil Resseguros

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Strengths of IRB Brasil Resseguros | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of IRB Brasil Resseguros are -

Sustainable margins compare to other players in Insurance (Life) industry

– IRB Brasil Resseguros has clearly differentiated products in the market place. This has enabled IRB Brasil Resseguros to fetch slight price premium compare to the competitors in the Insurance (Life) industry. The sustainable margins have also helped IRB Brasil Resseguros to invest into research and development (R&D) and innovation.

Diverse revenue streams

– IRB Brasil Resseguros is present in almost all the verticals within the Insurance (Life) industry. This has provided IRB Brasil Resseguros 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.

High switching costs

– The high switching costs that IRB Brasil Resseguros 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.

Superior customer experience

– The customer experience strategy of IRB Brasil Resseguros in Insurance (Life) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– IRB Brasil Resseguros has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. IRB Brasil Resseguros 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.

Low bargaining power of suppliers

– Suppliers of IRB Brasil Resseguros in the Financial sector have low bargaining power. IRB Brasil Resseguros has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps IRB Brasil Resseguros to manage not only supply disruptions but also source products at highly competitive prices.

Operational resilience

– The operational resilience strategy of IRB Brasil Resseguros comprises – understanding the underlying the factors in the Insurance (Life) 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.

Ability to recruit top talent

– IRB Brasil Resseguros is one of the leading players in the Insurance (Life) 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.

High brand equity

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

Organizational Resilience of IRB Brasil Resseguros

– The covid-19 pandemic has put organizational resilience at the centre of everthing IRB Brasil Resseguros does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Training and development

– IRB Brasil Resseguros 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.

Highly skilled collaborators

– IRB Brasil Resseguros has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Life) industry. Secondly the value chain collaborators of IRB Brasil Resseguros have helped the firm to develop new products and bring them quickly to the marketplace.

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Weaknesses of IRB Brasil Resseguros | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of IRB Brasil Resseguros are -

Workers concerns about automation

– As automation is fast increasing in the Insurance (Life) industry, IRB Brasil Resseguros 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.

Lack of clear differentiation of IRB Brasil Resseguros products

– To increase the profitability and margins on the products, IRB Brasil Resseguros needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– IRB Brasil Resseguros 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.

Skills based hiring in Insurance (Life) industry

– The stress on hiring functional specialists at IRB Brasil Resseguros 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 cash cycle compare to competitors

IRB Brasil Resseguros has a high cash cycle compare to other players in the Insurance (Life) 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 Brazil, IRB Brasil Resseguros needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to strategic competitive environment developments

– As IRB Brasil Resseguros is one of the leading players in the Insurance (Life) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Insurance (Life) industry in last five years.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, IRB Brasil Resseguros is slow explore the new channels of communication. These new channels of communication can help IRB Brasil Resseguros to provide better information regarding Insurance (Life) products and services. It can also build an online community to further reach out to potential customers.

Products dominated business model

– Even though IRB Brasil Resseguros has some of the most successful models in the Insurance (Life) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. IRB Brasil Resseguros should strive to include more intangible value offerings along with its core products and services.

High dependence on IRB Brasil Resseguros ‘s star products

– The top 2 products and services of IRB Brasil Resseguros still accounts for major business revenue. This dependence on star products in Insurance (Life) industry has resulted into insufficient focus on developing new products, even though IRB Brasil Resseguros has relatively successful track record of launching new products.

Compensation and incentives

– The revenue per employee of IRB Brasil Resseguros is just above the Insurance (Life) 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.

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IRB Brasil Resseguros Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of IRB Brasil Resseguros are -

Use of Bitcoin and other crypto currencies for transactions in Insurance (Life) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for IRB Brasil Resseguros in the Insurance (Life) industry. Now IRB Brasil Resseguros can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at IRB Brasil Resseguros 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 (Life) industry.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, IRB Brasil Resseguros can use these opportunities to build new business models that can help the communities that IRB Brasil Resseguros operates in. Secondly it can use opportunities from government spending in Insurance (Life) sector.

Buying journey improvements

– IRB Brasil Resseguros can improve the customer journey of consumers in the Insurance (Life) industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Insurance (Life) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. IRB Brasil Resseguros 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. IRB Brasil Resseguros 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.

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. IRB Brasil Resseguros can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Creating value in data economy

– The success of analytics program of IRB Brasil Resseguros has opened avenues for new revenue streams for the organization in Insurance (Life) industry. This can help IRB Brasil Resseguros to build a more holistic ecosystem for IRB Brasil Resseguros products in the Insurance (Life) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Better consumer reach

– The expansion of the 5G network will help IRB Brasil Resseguros to increase its market reach. IRB Brasil Resseguros 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Insurance (Life) industry, but it has also influenced the consumer preferences. IRB Brasil Resseguros can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

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

Loyalty marketing

– IRB Brasil Resseguros 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.

Using analytics as competitive advantage

– IRB Brasil Resseguros has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Insurance (Life) sector. This continuous investment in analytics has enabled IRB Brasil Resseguros to build a competitive advantage using analytics. The analytics driven competitive advantage can help IRB Brasil Resseguros to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Harnessing reconfiguration of the global supply chains

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

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Threats IRB Brasil Resseguros External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of IRB Brasil Resseguros are -

High dependence on third party suppliers

– IRB Brasil Resseguros 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.

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 IRB Brasil Resseguros business can come under increasing regulations regarding data privacy, data security, etc.

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.

Environmental challenges

– IRB Brasil Resseguros 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. IRB Brasil Resseguros can take advantage of this fund but it will also bring new competitors in the Insurance (Life) industry.

Regulatory challenges

– IRB Brasil Resseguros 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 (Life) industry regulations.

Technology acceleration in Forth Industrial Revolution

– IRB Brasil Resseguros has witnessed rapid integration of technology during Covid-19 in the Insurance (Life) industry. As one of the leading players in the industry, IRB Brasil Resseguros needs to keep up with the evolution of technology in the Insurance (Life) 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.

Consumer confidence and its impact on IRB Brasil Resseguros 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 Insurance (Life) 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 IRB Brasil Resseguros in Insurance (Life) industry. The Insurance (Life) 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Insurance (Life) industry are lowering. It can presents IRB Brasil Resseguros with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Life) sector.

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. IRB Brasil Resseguros 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 IRB Brasil Resseguros is facing in Insurance (Life) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Easy access to finance

– Easy access to finance in Insurance (Life) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. IRB Brasil Resseguros can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 IRB Brasil Resseguros.

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Weighted SWOT Analysis of IRB Brasil Resseguros Template, Example

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

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