SWOT Analysis / TOWS Matrix for SBI FinTech DRC (South Korea)
Based on various researches at Oak Spring University , SBI FinTech DRC is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, there is backlash against globalization, challanges to central banks by blockchain based private currencies, technology disruption, increasing energy prices,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SBI FinTech DRC can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SBI FinTech DRC, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SBI FinTech DRC 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 SBI FinTech DRC can be done for the following purposes –
1. Strategic planning of SBI FinTech DRC
2. Improving business portfolio management of SBI FinTech DRC
3. Assessing feasibility of the new initiative in South Korea
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SBI FinTech DRC
Strengths of SBI FinTech DRC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SBI FinTech DRC are -
Successful track record of launching new products
– SBI FinTech DRC has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SBI FinTech DRC 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.
Ability to lead change in Business Services
– SBI FinTech DRC is one of the leading players in the Business Services industry in South Korea. Over the years it has not only transformed the business landscape in the Business Services industry in South Korea but also across the existing markets. The ability to lead change has enabled SBI FinTech DRC in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Business Services industry
– SBI FinTech DRC has clearly differentiated products in the market place. This has enabled SBI FinTech DRC to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped SBI FinTech DRC to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the SBI FinTech DRC 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.
Training and development
– SBI FinTech DRC has one of the best training and development program in Services 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.
Effective Research and Development (R&D)
– SBI FinTech DRC has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SBI FinTech DRC staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– SBI FinTech DRC is one of the most innovative firm in Business Services sector.
Low bargaining power of suppliers
– Suppliers of SBI FinTech DRC in the Services sector have low bargaining power. SBI FinTech DRC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SBI FinTech DRC to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– SBI FinTech DRC is one of the leading players in the Business Services industry in South Korea. It is in a position to attract the best talent available in South Korea. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– SBI FinTech DRC has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of SBI FinTech DRC have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– SBI FinTech DRC is present in almost all the verticals within the Business Services industry. This has provided SBI FinTech DRC 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.
Analytics focus
– SBI FinTech DRC 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 Business Services industry. The technology infrastructure of South Korea 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.
Weaknesses of SBI FinTech DRC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SBI FinTech DRC are -
No frontier risks strategy
– From the 10K / annual statement of SBI FinTech DRC, it seems that company is thinking out the frontier risks that can impact Business 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 cash cycle compare to competitors
SBI FinTech DRC has a high cash cycle compare to other players in the Business 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.
Increasing silos among functional specialists
– The organizational structure of SBI FinTech DRC is dominated by functional specialists. It is not different from other players in the Business Services industry, but SBI FinTech DRC needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SBI FinTech DRC to focus more on services in the Business Services industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, SBI FinTech DRC has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. SBI FinTech DRC 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.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in South Korea, SBI FinTech DRC 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 Business Services industry.
Need for greater diversity
– SBI FinTech DRC 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.
Low market penetration in new markets
– Outside its home market of South Korea, SBI FinTech DRC needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at SBI FinTech DRC, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. SBI FinTech DRC has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As SBI FinTech DRC is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, SBI FinTech DRC 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 Business Services industry using digital technology.
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 SBI FinTech DRC supply chain. Even after few cautionary changes, SBI FinTech DRC is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SBI FinTech DRC vulnerable to further global disruptions in South East Asia.
SBI FinTech DRC Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SBI FinTech DRC are -
Buying journey improvements
– SBI FinTech DRC can improve the customer journey of consumers in the Business 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SBI FinTech DRC 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 SBI FinTech DRC to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– SBI FinTech DRC can develop new processes and procedures in Business Services industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SBI FinTech DRC can use these opportunities to build new business models that can help the communities that SBI FinTech DRC operates in. Secondly it can use opportunities from government spending in Business Services sector.
Building a culture of innovation
– managers at SBI FinTech DRC 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 Business Services industry.
Learning at scale
– Online learning technologies has now opened space for SBI FinTech DRC 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.
Loyalty marketing
– SBI FinTech DRC 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 SBI FinTech DRC can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. SBI FinTech DRC can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– SBI FinTech DRC 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.
Better consumer reach
– The expansion of the 5G network will help SBI FinTech DRC to increase its market reach. SBI FinTech DRC 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.
Manufacturing automation
– SBI FinTech DRC can use the latest technology developments to improve its manufacturing and designing process in Business 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Business Services industry, but it has also influenced the consumer preferences. SBI FinTech DRC can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats SBI FinTech DRC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SBI FinTech DRC are -
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SBI FinTech DRC can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that SBI FinTech DRC is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, SBI FinTech DRC may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SBI FinTech DRC in Business Services industry. The Business 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.
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 SBI FinTech DRC in the Business Services sector and impact the bottomline of the organization.
Environmental challenges
– SBI FinTech DRC 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. SBI FinTech DRC can take advantage of this fund but it will also bring new competitors in the Business 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.
Stagnating economy with rate increase
– SBI FinTech DRC 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 Business Services industry.
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. SBI FinTech DRC needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SBI FinTech DRC 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 SBI FinTech DRC prominent markets.
Consumer confidence and its impact on SBI FinTech DRC 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 Business Services industry and other sectors.
High dependence on third party suppliers
– SBI FinTech DRC 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.
Increasing wage structure of SBI FinTech DRC
– 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 SBI FinTech DRC.
Weighted SWOT Analysis of SBI FinTech DRC Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SBI FinTech DRC 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 SBI FinTech DRC 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 SBI FinTech DRC 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 SBI FinTech DRC 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 SBI FinTech DRC needs to make to build a sustainable competitive advantage.