Incar Financial Service (211050) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Incar Financial Service (South Korea)

Based on various researches at Oak Spring University , Incar Financial Service is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing household debt because of falling income levels, technology disruption, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing commodity prices, etc

---

---

---

---

Introduction to SWOT Analysis of Incar Financial Service

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Incar Financial Service can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Incar Financial Service, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Incar Financial Service 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 Incar Financial Service can be done for the following purposes –
1. Strategic planning of Incar Financial Service
2. Improving business portfolio management of Incar Financial Service
3. Assessing feasibility of the new initiative in South Korea
4. Making a Insurance (Life) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Incar Financial Service

---

Strengths of Incar Financial Service | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Incar Financial Service are -

High brand equity

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

Training and development

– Incar Financial Service 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.

Digital Transformation in Insurance (Life) industry

- digital transformation varies from industry to industry. For Incar Financial Service digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Incar Financial Service 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.

Analytics focus

– Incar Financial Service 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 (Life) 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.

Effective Research and Development (R&D)

– Incar Financial Service has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Incar Financial Service staying ahead in the Insurance (Life) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Operational resilience

– The operational resilience strategy of Incar Financial Service comprises – understanding the underlying the factors in the Insurance (Life) industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

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

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

Ability to lead change in Insurance (Life)

– Incar Financial Service is one of the leading players in the Insurance (Life) industry in South Korea. Over the years it has not only transformed the business landscape in the Insurance (Life) industry in South Korea but also across the existing markets. The ability to lead change has enabled Incar Financial Service in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

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

Cross disciplinary teams

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

Diverse revenue streams

– Incar Financial Service is present in almost all the verticals within the Insurance (Life) industry. This has provided Incar Financial Service 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.

---

---

Weaknesses of Incar Financial Service | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Incar Financial Service are -

Slow decision making process

– As mentioned earlier in the report, Incar Financial Service 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 (Life) industry over the last five years. Incar Financial Service 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.

Slow to harness new channels of communication

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

Interest costs

– Compare to the competition, Incar Financial Service 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.

Skills based hiring in Insurance (Life) industry

– The stress on hiring functional specialists at Incar Financial Service has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

High 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 Incar Financial Service supply chain. Even after few cautionary changes, Incar Financial Service is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Incar Financial Service vulnerable to further global disruptions in South East Asia.

High bargaining power of channel partners in Insurance (Life) industry

– because of the regulatory requirements in South Korea, Incar Financial Service 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 (Life) industry.

Capital Spending Reduction

– Even during the low interest decade, Incar Financial Service 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 Insurance (Life) industry using digital technology.

Ability to respond to the competition

– As the decision making is very deliberative at Incar Financial Service, in the dynamic environment of Insurance (Life) industry it has struggled to respond to the nimble upstart competition. Incar Financial Service has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Need for greater diversity

– Incar Financial Service 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.

Workers concerns about automation

– As automation is fast increasing in the Insurance (Life) industry, Incar Financial Service 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.

Slow to strategic competitive environment developments

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

---

Incar Financial Service Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Incar Financial Service are -

Creating value in data economy

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

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

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

Leveraging digital technologies

– Incar Financial Service 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.

Buying journey improvements

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

Low interest rates

– Even though inflation is raising its head in most developed economies, Incar Financial Service 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.

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. Incar Financial Service can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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 Incar Financial Service 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.

Loyalty marketing

– Incar Financial Service 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.

Changes in consumer behavior post Covid-19

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

Increase in government spending

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

Finding new ways to collaborate

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

Using analytics as competitive advantage

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

Redefining models of collaboration and team work

– As explained in the weaknesses section, Incar Financial Service is facing challenges because of the dominance of functional experts in the organization. Incar Financial Service can utilize new technology in the field of Insurance (Life) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

---

Threats Incar Financial Service External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Incar Financial Service are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Incar Financial Service 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 (Life) sector.

Increasing wage structure of Incar Financial Service

– 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 Incar Financial Service.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Incar Financial Service in Insurance (Life) industry. The Insurance (Life) industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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 Incar Financial Service.

Regulatory challenges

– Incar Financial Service needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Insurance (Life) industry regulations.

Shortening product life cycle

– it is one of the major threat that Incar Financial Service is facing in Insurance (Life) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Incar Financial Service in the Insurance (Life) sector and impact the bottomline of the organization.

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. Incar Financial Service 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.

High dependence on third party suppliers

– Incar Financial Service 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.

Easy access to finance

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

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

Environmental challenges

– Incar Financial Service 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. Incar Financial Service can take advantage of this fund but it will also bring new competitors in the Insurance (Life) industry.

Stagnating economy with rate increase

– Incar Financial Service 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 (Life) industry.

---

Weighted SWOT Analysis of Incar Financial Service Template, Example

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

--- ---