Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Rand Merchant Inv (South Africa)
Based on various researches at Oak Spring University , Rand Merchant Inv is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation,
there is backlash against globalization, increasing commodity prices, etc
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Introduction to SWOT Analysis of Rand Merchant Inv
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Rand Merchant Inv can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rand Merchant Inv, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rand Merchant Inv 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 Rand Merchant Inv can be done for the following purposes –
1. Strategic planning of Rand Merchant Inv
2. Improving business portfolio management of Rand Merchant Inv
3. Assessing feasibility of the new initiative in South Africa
4. Making a Insurance (Miscellaneous) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Rand Merchant Inv
Strengths of Rand Merchant Inv | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Rand Merchant Inv are -
– Rand Merchant Inv is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Insurance (Miscellaneous) industry. The technology infrastructure of South Africa is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
High brand equity
– Rand Merchant Inv has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Rand Merchant Inv to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
- Rand Merchant Inv 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 Rand Merchant Inv is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Rand Merchant Inv emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Rand Merchant Inv is present in almost all the verticals within the Insurance (Miscellaneous) industry. This has provided Rand Merchant Inv 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.
Training and development
– Rand Merchant Inv 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.
– The operational resilience strategy of Rand Merchant Inv comprises – understanding the underlying the factors in the Insurance (Miscellaneous) industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– Rand Merchant Inv has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Rand Merchant Inv staying ahead in the Insurance (Miscellaneous) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Rand Merchant Inv has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Insurance (Miscellaneous) industry. Secondly the value chain collaborators of Rand Merchant Inv have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Rand Merchant Inv is one of the most innovative firm in Insurance (Miscellaneous) sector.
Digital Transformation in Insurance (Miscellaneous) industry
- digital transformation varies from industry to industry. For Rand Merchant Inv digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Rand Merchant Inv 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 Rand Merchant Inv in the Financial sector have low bargaining power. Rand Merchant Inv has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Rand Merchant Inv to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Rand Merchant Inv 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.
Weaknesses of Rand Merchant Inv | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Rand Merchant Inv are -
Increasing silos among functional specialists
– The organizational structure of Rand Merchant Inv is dominated by functional specialists. It is not different from other players in the Insurance (Miscellaneous) industry, but Rand Merchant Inv needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Rand Merchant Inv to focus more on services in the Insurance (Miscellaneous) industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Rand Merchant Inv has a high cash cycle compare to other players in the Insurance (Miscellaneous) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Rand Merchant Inv is just above the Insurance (Miscellaneous) industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
– Compare to the competition, Rand Merchant Inv 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.
Ability to respond to the competition
– As the decision making is very deliberative at Rand Merchant Inv, in the dynamic environment of Insurance (Miscellaneous) industry it has struggled to respond to the nimble upstart competition. Rand Merchant Inv has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Rand Merchant Inv ‘s star products
– The top 2 products and services of Rand Merchant Inv still accounts for major business revenue. This dependence on star products in Insurance (Miscellaneous) industry has resulted into insufficient focus on developing new products, even though Rand Merchant Inv has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Rand Merchant Inv, it seems that company is thinking out the frontier risks that can impact Insurance (Miscellaneous) industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, Rand Merchant Inv has high operating costs in the Insurance (Miscellaneous) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Rand Merchant Inv lucrative customers.
Lack of clear differentiation of Rand Merchant Inv products
– To increase the profitability and margins on the products, Rand Merchant Inv needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Insurance (Miscellaneous) industry
– The stress on hiring functional specialists at Rand Merchant Inv 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.
Need for greater diversity
– Rand Merchant Inv 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.
Rand Merchant Inv Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Rand Merchant Inv are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Rand Merchant Inv 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.
Developing new processes and practices
– Rand Merchant Inv can develop new processes and procedures in Insurance (Miscellaneous) 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.
Creating value in data economy
– The success of analytics program of Rand Merchant Inv has opened avenues for new revenue streams for the organization in Insurance (Miscellaneous) industry. This can help Rand Merchant Inv to build a more holistic ecosystem for Rand Merchant Inv products in the Insurance (Miscellaneous) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Rand Merchant Inv can improve the customer journey of consumers in the Insurance (Miscellaneous) 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.
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. Rand Merchant Inv can explore opportunities that can attract volunteers and are consistent with its mission and vision.
– Rand Merchant Inv 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Rand Merchant Inv 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 Rand Merchant Inv to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Rand Merchant Inv can use these opportunities to build new business models that can help the communities that Rand Merchant Inv operates in. Secondly it can use opportunities from government spending in Insurance (Miscellaneous) sector.
Using analytics as competitive advantage
– Rand Merchant Inv has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Insurance (Miscellaneous) sector. This continuous investment in analytics has enabled Rand Merchant Inv to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rand Merchant Inv to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Rand Merchant Inv 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.
Better consumer reach
– The expansion of the 5G network will help Rand Merchant Inv to increase its market reach. Rand Merchant Inv 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Rand Merchant Inv 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 Rand Merchant Inv to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Rand Merchant Inv in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Insurance (Miscellaneous) industry, and it will provide faster access to the consumers.
Threats Rand Merchant Inv External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Rand Merchant Inv are -
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 Rand Merchant Inv business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Insurance (Miscellaneous) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Rand Merchant Inv 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. Rand Merchant Inv needs to understand the core reasons impacting the Insurance (Miscellaneous) industry. This will help it in building a better workplace.
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. Rand Merchant Inv 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.
Increasing wage structure of Rand Merchant Inv
– 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 Rand Merchant Inv.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Rand Merchant Inv may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Insurance (Miscellaneous) sector.
– 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.
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 Rand Merchant Inv.
– Rand Merchant Inv 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. Rand Merchant Inv can take advantage of this fund but it will also bring new competitors in the Insurance (Miscellaneous) industry.
Shortening product life cycle
– it is one of the major threat that Rand Merchant Inv is facing in Insurance (Miscellaneous) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Rand Merchant Inv 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.
– Rand Merchant Inv needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Insurance (Miscellaneous) industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Rand Merchant Inv in Insurance (Miscellaneous) industry. The Insurance (Miscellaneous) industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Rand Merchant Inv Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Rand Merchant Inv 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 Rand Merchant Inv 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 Rand Merchant Inv 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 Rand Merchant Inv 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 Rand Merchant Inv needs to make to build a sustainable competitive advantage.