SUL AMERICA UNT (SULA11) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Accident & Health)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SUL AMERICA UNT (Brazil)
Based on various researches at Oak Spring University , SUL AMERICA UNT is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing energy prices, wage bills are increasing, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SUL AMERICA UNT can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SUL AMERICA UNT, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SUL AMERICA UNT 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 SUL AMERICA UNT can be done for the following purposes –
1. Strategic planning of SUL AMERICA UNT
2. Improving business portfolio management of SUL AMERICA UNT
3. Assessing feasibility of the new initiative in Brazil
4. Making a Insurance (Accident & Health) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SUL AMERICA UNT
Strengths of SUL AMERICA UNT | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SUL AMERICA UNT are -
Sustainable margins compare to other players in Insurance (Accident & Health) industry
– SUL AMERICA UNT has clearly differentiated products in the market place. This has enabled SUL AMERICA UNT to fetch slight price premium compare to the competitors in the Insurance (Accident & Health) industry. The sustainable margins have also helped SUL AMERICA UNT to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– SUL AMERICA UNT has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Accident & Health) industry. Secondly the value chain collaborators of SUL AMERICA UNT have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Insurance (Accident & Health) industry
- digital transformation varies from industry to industry. For SUL AMERICA UNT digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SUL AMERICA UNT 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.
Operational resilience
– The operational resilience strategy of SUL AMERICA UNT comprises – understanding the underlying the factors in the Insurance (Accident & Health) 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.
Successful track record of launching new products
– SUL AMERICA UNT has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SUL AMERICA UNT has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High brand equity
– SUL AMERICA UNT has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SUL AMERICA UNT to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of SUL AMERICA UNT in Insurance (Accident & Health) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Insurance (Accident & Health)
– SUL AMERICA UNT is one of the leading players in the Insurance (Accident & Health) industry in Brazil. Over the years it has not only transformed the business landscape in the Insurance (Accident & Health) industry in Brazil but also across the existing markets. The ability to lead change has enabled SUL AMERICA UNT in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the SUL AMERICA UNT 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.
Low bargaining power of suppliers
– Suppliers of SUL AMERICA UNT in the Financial sector have low bargaining power. SUL AMERICA UNT has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SUL AMERICA UNT to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– SUL AMERICA UNT 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 (Accident & Health) industry. The technology infrastructure of Brazil 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.
Training and development
– SUL AMERICA UNT 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.
Weaknesses of SUL AMERICA UNT | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SUL AMERICA UNT are -
Slow to strategic competitive environment developments
– As SUL AMERICA UNT is one of the leading players in the Insurance (Accident & Health) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Insurance (Accident & Health) industry in last five years.
High operating costs
– Compare to the competitors, SUL AMERICA UNT has high operating costs in the Insurance (Accident & Health) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SUL AMERICA UNT lucrative customers.
High cash cycle compare to competitors
SUL AMERICA UNT has a high cash cycle compare to other players in the Insurance (Accident & Health) 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
– SUL AMERICA UNT 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.
Products dominated business model
– Even though SUL AMERICA UNT has some of the most successful models in the Insurance (Accident & Health) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SUL AMERICA UNT should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of SUL AMERICA UNT is dominated by functional specialists. It is not different from other players in the Insurance (Accident & Health) industry, but SUL AMERICA UNT needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SUL AMERICA UNT to focus more on services in the Insurance (Accident & Health) industry rather than just following the product oriented approach.
High bargaining power of channel partners in Insurance (Accident & Health) industry
– because of the regulatory requirements in Brazil, SUL AMERICA UNT 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 Insurance (Accident & Health) industry.
Slow decision making process
– As mentioned earlier in the report, SUL AMERICA UNT has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Insurance (Accident & Health) industry over the last five years. SUL AMERICA UNT even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring in Insurance (Accident & Health) industry
– The stress on hiring functional specialists at SUL AMERICA UNT 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.
Interest costs
– Compare to the competition, SUL AMERICA UNT 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.
Compensation and incentives
– The revenue per employee of SUL AMERICA UNT is just above the Insurance (Accident & Health) 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.
SUL AMERICA UNT Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SUL AMERICA UNT are -
Loyalty marketing
– SUL AMERICA UNT 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects SUL AMERICA UNT 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
– SUL AMERICA UNT can use the latest technology developments to improve its manufacturing and designing process in Insurance (Accident & Health) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, SUL AMERICA UNT is facing challenges because of the dominance of functional experts in the organization. SUL AMERICA UNT can utilize new technology in the field of Insurance (Accident & Health) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Accident & Health) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SUL AMERICA UNT in the Insurance (Accident & Health) industry. Now SUL AMERICA UNT can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SUL AMERICA UNT can use these opportunities to build new business models that can help the communities that SUL AMERICA UNT operates in. Secondly it can use opportunities from government spending in Insurance (Accident & Health) sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SUL AMERICA UNT 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 SUL AMERICA UNT to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for SUL AMERICA UNT 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, SUL AMERICA UNT 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.
Building a culture of innovation
– managers at SUL AMERICA UNT 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 (Accident & Health) industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for SUL AMERICA UNT 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 (Accident & Health) industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Insurance (Accident & Health) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SUL AMERICA UNT 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. SUL AMERICA UNT 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.
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 SUL AMERICA UNT 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.
Threats SUL AMERICA UNT External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SUL AMERICA UNT are -
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. SUL AMERICA UNT needs to understand the core reasons impacting the Insurance (Accident & Health) industry. This will help it in building a better workplace.
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 SUL AMERICA UNT business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, SUL AMERICA UNT 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 (Accident & Health) sector.
Easy access to finance
– Easy access to finance in Insurance (Accident & Health) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SUL AMERICA UNT can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– SUL AMERICA UNT 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 (Accident & Health) industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SUL AMERICA UNT 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 SUL AMERICA UNT prominent markets.
Environmental challenges
– SUL AMERICA UNT 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. SUL AMERICA UNT can take advantage of this fund but it will also bring new competitors in the Insurance (Accident & Health) industry.
Stagnating economy with rate increase
– SUL AMERICA UNT 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 (Accident & Health) industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for SUL AMERICA UNT in the Insurance (Accident & Health) sector and impact the bottomline of the organization.
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 SUL AMERICA UNT.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SUL AMERICA UNT in Insurance (Accident & Health) industry. The Insurance (Accident & Health) 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.
Technology acceleration in Forth Industrial Revolution
– SUL AMERICA UNT has witnessed rapid integration of technology during Covid-19 in the Insurance (Accident & Health) industry. As one of the leading players in the industry, SUL AMERICA UNT needs to keep up with the evolution of technology in the Insurance (Accident & Health) 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.
High dependence on third party suppliers
– SUL AMERICA UNT 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.
Weighted SWOT Analysis of SUL AMERICA UNT Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SUL AMERICA UNT 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 SUL AMERICA UNT 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 SUL AMERICA UNT 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 SUL AMERICA UNT 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 SUL AMERICA UNT needs to make to build a sustainable competitive advantage.
