Based on various researches at Oak Spring University , AmTrust Financial Services ELKS 1 is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is backlash against globalization, there is increasing trade war between United States & China, increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of AmTrust Financial Services ELKS 1
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that AmTrust Financial Services ELKS 1 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the AmTrust Financial Services ELKS 1, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 can be done for the following purposes –
1. Strategic planning of AmTrust Financial Services ELKS 1
2. Improving business portfolio management of AmTrust Financial Services ELKS 1
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of AmTrust Financial Services ELKS 1
Strengths of AmTrust Financial Services ELKS 1 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of AmTrust Financial Services ELKS 1 are -
Successful track record of launching new products
– AmTrust Financial Services ELKS 1 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. AmTrust Financial Services ELKS 1 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
– AmTrust Financial Services ELKS 1 is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled AmTrust Financial Services ELKS 1 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of AmTrust Financial Services ELKS 1 in the sector have low bargaining power. AmTrust Financial Services ELKS 1 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps AmTrust Financial Services ELKS 1 to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– AmTrust Financial Services ELKS 1 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of AmTrust Financial Services ELKS 1 have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– AmTrust Financial Services ELKS 1 is present in almost all the verticals within the industry. This has provided AmTrust Financial Services ELKS 1 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.
High switching costs
– The high switching costs that AmTrust Financial Services ELKS 1 has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Digital Transformation in industry
- digital transformation varies from industry to industry. For AmTrust Financial Services ELKS 1 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. AmTrust Financial Services ELKS 1 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.
Organizational Resilience of AmTrust Financial Services ELKS 1
– The covid-19 pandemic has put organizational resilience at the centre of everthing AmTrust Financial Services ELKS 1 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of AmTrust Financial Services ELKS 1 comprises – understanding the underlying the factors in the 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.
Training and development
– AmTrust Financial Services ELKS 1 has one of the best training and development program in 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.
Innovation driven organization
– AmTrust Financial Services ELKS 1 is one of the most innovative firm in sector.
High brand equity
– AmTrust Financial Services ELKS 1 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled AmTrust Financial Services ELKS 1 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of AmTrust Financial Services ELKS 1 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AmTrust Financial Services ELKS 1 are -
Capital Spending Reduction
– Even during the low interest decade, AmTrust Financial Services ELKS 1 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 industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, AmTrust Financial Services ELKS 1 is slow explore the new channels of communication. These new channels of communication can help AmTrust Financial Services ELKS 1 to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, AmTrust Financial Services ELKS 1 has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract AmTrust Financial Services ELKS 1 lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, AmTrust Financial Services ELKS 1 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of AmTrust Financial Services ELKS 1, it seems that company is thinking out the frontier risks that can impact 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.
Slow decision making process
– As mentioned earlier in the report, AmTrust Financial Services ELKS 1 has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. AmTrust Financial Services ELKS 1 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.
Need for greater diversity
– AmTrust Financial Services ELKS 1 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.
Skills based hiring in industry
– The stress on hiring functional specialists at AmTrust Financial Services ELKS 1 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 cash cycle compare to competitors
AmTrust Financial Services ELKS 1 has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, AmTrust Financial Services ELKS 1 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.
Increasing silos among functional specialists
– The organizational structure of AmTrust Financial Services ELKS 1 is dominated by functional specialists. It is not different from other players in the industry, but AmTrust Financial Services ELKS 1 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help AmTrust Financial Services ELKS 1 to focus more on services in the industry rather than just following the product oriented approach.
AmTrust Financial Services ELKS 1 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of AmTrust Financial Services ELKS 1 are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for AmTrust Financial Services ELKS 1 in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for AmTrust Financial Services ELKS 1 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, AmTrust Financial Services ELKS 1 can use these opportunities to build new business models that can help the communities that AmTrust Financial Services ELKS 1 operates in. Secondly it can use opportunities from government spending in sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, AmTrust Financial Services ELKS 1 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for AmTrust Financial Services ELKS 1 in the industry. Now AmTrust Financial Services ELKS 1 can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help AmTrust Financial Services ELKS 1 to increase its market reach. AmTrust Financial Services ELKS 1 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.
Using analytics as competitive advantage
– AmTrust Financial Services ELKS 1 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled AmTrust Financial Services ELKS 1 to build a competitive advantage using analytics. The analytics driven competitive advantage can help AmTrust Financial Services ELKS 1 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 AmTrust Financial Services ELKS 1 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.
Manufacturing automation
– AmTrust Financial Services ELKS 1 can use the latest technology developments to improve its manufacturing and designing process in 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 industry, but it has also influenced the consumer preferences. AmTrust Financial Services ELKS 1 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at AmTrust Financial Services ELKS 1 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 industry.
Loyalty marketing
– AmTrust Financial Services ELKS 1 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats AmTrust Financial Services ELKS 1 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of AmTrust Financial Services ELKS 1 are -
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. AmTrust Financial Services ELKS 1 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– AmTrust Financial Services ELKS 1 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. AmTrust Financial Services ELKS 1 can take advantage of this fund but it will also bring new competitors in the 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for AmTrust Financial Services ELKS 1 in industry. The 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.
High dependence on third party suppliers
– AmTrust Financial Services ELKS 1 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.
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. AmTrust Financial Services ELKS 1 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.
Regulatory challenges
– AmTrust Financial Services ELKS 1 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 industry regulations.
Shortening product life cycle
– it is one of the major threat that AmTrust Financial Services ELKS 1 is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on AmTrust Financial Services ELKS 1 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 industry and other sectors.
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 AmTrust Financial Services ELKS 1 business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of AmTrust Financial Services ELKS 1
– 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 AmTrust Financial Services ELKS 1.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 prominent markets.
Weighted SWOT Analysis of AmTrust Financial Services ELKS 1 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 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 AmTrust Financial Services ELKS 1 needs to make to build a sustainable competitive advantage.