SWOT Analysis / TOWS Matrix for Singapore Exchange (Singapore)
Based on various researches at Oak Spring University , Singapore Exchange is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Singapore Exchange
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Singapore Exchange can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Singapore Exchange, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Singapore Exchange 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 Singapore Exchange can be done for the following purposes –
1. Strategic planning of Singapore Exchange
2. Improving business portfolio management of Singapore Exchange
3. Assessing feasibility of the new initiative in Singapore
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Singapore Exchange
Strengths of Singapore Exchange | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Singapore Exchange are -
Effective Research and Development (R&D)
– Singapore Exchange has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Singapore Exchange 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.
Ability to recruit top talent
– Singapore Exchange is one of the leading players in the Investment Services industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Singapore Exchange 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 Singapore Exchange have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Singapore Exchange is one of the most innovative firm in Investment Services sector.
Ability to lead change in Investment Services
– Singapore Exchange is one of the leading players in the Investment Services industry in Singapore. Over the years it has not only transformed the business landscape in the Investment Services industry in Singapore but also across the existing markets. The ability to lead change has enabled Singapore Exchange in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Singapore Exchange 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 Investment Services industry. The technology infrastructure of Singapore 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.
Learning organization
- Singapore Exchange 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 Singapore Exchange is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Singapore Exchange emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Singapore Exchange
– The covid-19 pandemic has put organizational resilience at the centre of everthing Singapore Exchange does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Singapore Exchange in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Singapore Exchange 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.
Digital Transformation in Investment Services industry
- digital transformation varies from industry to industry. For Singapore Exchange digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Singapore Exchange 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.
Low bargaining power of suppliers
– Suppliers of Singapore Exchange in the Financial sector have low bargaining power. Singapore Exchange has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Singapore Exchange to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Singapore Exchange | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Singapore Exchange 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 Singapore Exchange supply chain. Even after few cautionary changes, Singapore Exchange is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Singapore Exchange vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Singapore Exchange has a high cash cycle compare to other players in the Investment Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Singapore Exchange 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Singapore Exchange is slow explore the new channels of communication. These new channels of communication can help Singapore Exchange to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Investment Services industry
– because of the regulatory requirements in Singapore, Singapore Exchange 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.
Slow decision making process
– As mentioned earlier in the report, Singapore Exchange 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. Singapore Exchange 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.
No frontier risks strategy
– From the 10K / annual statement of Singapore Exchange, it seems that company is thinking out the frontier risks that can impact Investment Services 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.
High operating costs
– Compare to the competitors, Singapore Exchange has high operating costs in the Investment Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Singapore Exchange lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Singapore Exchange 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 Investment Services industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Investment Services industry, Singapore Exchange 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.
Skills based hiring in Investment Services industry
– The stress on hiring functional specialists at Singapore Exchange 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.
Singapore Exchange Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Singapore Exchange are -
Better consumer reach
– The expansion of the 5G network will help Singapore Exchange to increase its market reach. Singapore Exchange 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.
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 Singapore Exchange 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.
Building a culture of innovation
– managers at Singapore Exchange 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Singapore Exchange 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 Singapore Exchange to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Singapore Exchange is facing challenges because of the dominance of functional experts in the organization. Singapore Exchange can utilize new technology in the field of Investment Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Singapore Exchange has opened avenues for new revenue streams for the organization in Investment Services industry. This can help Singapore Exchange to build a more holistic ecosystem for Singapore Exchange products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Singapore Exchange can use the latest technology developments to improve its manufacturing and designing process in Investment Services 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.
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 Singapore Exchange in the Investment Services industry. Now Singapore Exchange can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Singapore Exchange can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Singapore Exchange can improve the customer journey of consumers in the Investment Services 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.
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. Singapore Exchange can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Singapore Exchange 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Singapore Exchange 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.
Threats Singapore Exchange External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Singapore Exchange are -
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. Singapore Exchange 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.
Consumer confidence and its impact on Singapore Exchange 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.
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 Singapore Exchange in the Investment Services sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Singapore Exchange is facing in Investment Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Singapore Exchange 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, Singapore Exchange 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 Singapore Exchange prominent markets.
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. Singapore Exchange needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Singapore Exchange 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
– Singapore Exchange 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. Singapore Exchange can take advantage of this fund but it will also bring new competitors in the Investment Services industry.
Technology acceleration in Forth Industrial Revolution
– Singapore Exchange has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, Singapore Exchange needs to keep up with the evolution of technology in the Investment Services 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.
Stagnating economy with rate increase
– Singapore Exchange 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 Investment Services industry.
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.
Weighted SWOT Analysis of Singapore Exchange Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Singapore Exchange 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 Singapore Exchange 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 Singapore Exchange 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 Singapore Exchange 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 Singapore Exchange needs to make to build a sustainable competitive advantage.