ARMOUR Residential REIT Inc Pa Pref (ARR_pa) SWOT Analysis / TOWS Matrix / MBA Resources
Consumer Financial Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for ARMOUR Residential REIT Inc Pa Pref (United States)
Based on various researches at Oak Spring University , ARMOUR Residential REIT Inc Pa Pref is operating in a macro-environment that has been destablized by – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing energy prices,
increasing transportation and logistics costs, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of ARMOUR Residential REIT Inc Pa Pref
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ARMOUR Residential REIT Inc Pa Pref can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ARMOUR Residential REIT Inc Pa Pref, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref can be done for the following purposes –
1. Strategic planning of ARMOUR Residential REIT Inc Pa Pref
2. Improving business portfolio management of ARMOUR Residential REIT Inc Pa Pref
3. Assessing feasibility of the new initiative in United States
4. Making a Consumer Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ARMOUR Residential REIT Inc Pa Pref
Strengths of ARMOUR Residential REIT Inc Pa Pref | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ARMOUR Residential REIT Inc Pa Pref are -
High brand equity
– ARMOUR Residential REIT Inc Pa Pref has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ARMOUR Residential REIT Inc Pa Pref to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– ARMOUR Residential REIT Inc Pa Pref is one of the leading players in the Consumer Financial Services industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ARMOUR Residential REIT Inc Pa Pref emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– ARMOUR Residential REIT Inc Pa Pref is one of the most innovative firm in Consumer Financial Services sector.
Low bargaining power of suppliers
– Suppliers of ARMOUR Residential REIT Inc Pa Pref in the Financial sector have low bargaining power. ARMOUR Residential REIT Inc Pa Pref has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ARMOUR Residential REIT Inc Pa Pref to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– ARMOUR Residential REIT Inc Pa Pref has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ARMOUR Residential REIT Inc Pa Pref 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.
Analytics focus
– ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services industry. The technology infrastructure of United States 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.
Cross disciplinary teams
– Horizontal connected teams at the ARMOUR Residential REIT Inc Pa Pref 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.
Digital Transformation in Consumer Financial Services industry
- digital transformation varies from industry to industry. For ARMOUR Residential REIT Inc Pa Pref digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ARMOUR Residential REIT Inc Pa Pref 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.
Effective Research and Development (R&D)
– ARMOUR Residential REIT Inc Pa Pref has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ARMOUR Residential REIT Inc Pa Pref staying ahead in the Consumer Financial Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Consumer Financial Services industry
– ARMOUR Residential REIT Inc Pa Pref has clearly differentiated products in the market place. This has enabled ARMOUR Residential REIT Inc Pa Pref to fetch slight price premium compare to the competitors in the Consumer Financial Services industry. The sustainable margins have also helped ARMOUR Residential REIT Inc Pa Pref to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– ARMOUR Residential REIT Inc Pa Pref has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Consumer Financial Services industry. Secondly the value chain collaborators of ARMOUR Residential REIT Inc Pa Pref have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of ARMOUR Residential REIT Inc Pa Pref | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ARMOUR Residential REIT Inc Pa Pref are -
Increasing silos among functional specialists
– The organizational structure of ARMOUR Residential REIT Inc Pa Pref is dominated by functional specialists. It is not different from other players in the Consumer Financial Services industry, but ARMOUR Residential REIT Inc Pa Pref needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ARMOUR Residential REIT Inc Pa Pref to focus more on services in the Consumer Financial Services industry rather than just following the product oriented approach.
Lack of clear differentiation of ARMOUR Residential REIT Inc Pa Pref products
– To increase the profitability and margins on the products, ARMOUR Residential REIT Inc Pa Pref needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services 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, ARMOUR Residential REIT Inc Pa Pref is slow explore the new channels of communication. These new channels of communication can help ARMOUR Residential REIT Inc Pa Pref to provide better information regarding Consumer Financial Services products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, ARMOUR Residential REIT Inc Pa Pref 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.
Need for greater diversity
– ARMOUR Residential REIT Inc Pa Pref 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.
Employees’ less understanding of ARMOUR Residential REIT Inc Pa Pref strategy
– From the outside it seems that the employees of ARMOUR Residential REIT Inc Pa Pref don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners in Consumer Financial Services industry
– because of the regulatory requirements in United States, ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services industry.
Compensation and incentives
– The revenue per employee of ARMOUR Residential REIT Inc Pa Pref is just above the Consumer Financial Services 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.
Slow decision making process
– As mentioned earlier in the report, ARMOUR Residential REIT Inc Pa Pref has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Consumer Financial Services industry over the last five years. ARMOUR Residential REIT Inc Pa Pref 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.
Workers concerns about automation
– As automation is fast increasing in the Consumer Financial Services industry, ARMOUR Residential REIT Inc Pa Pref 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.
ARMOUR Residential REIT Inc Pa Pref Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ARMOUR Residential REIT Inc Pa Pref are -
Using analytics as competitive advantage
– ARMOUR Residential REIT Inc Pa Pref has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Consumer Financial Services sector. This continuous investment in analytics has enabled ARMOUR Residential REIT Inc Pa Pref to build a competitive advantage using analytics. The analytics driven competitive advantage can help ARMOUR Residential REIT Inc Pa Pref to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Consumer Financial Services industry, but it has also influenced the consumer preferences. ARMOUR Residential REIT Inc Pa Pref can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref to increase its market reach. ARMOUR Residential REIT Inc Pa Pref 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, ARMOUR Residential REIT Inc Pa Pref 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
– ARMOUR Residential REIT Inc Pa Pref can develop new processes and procedures in Consumer Financial 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Consumer Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ARMOUR Residential REIT Inc Pa Pref 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. ARMOUR Residential REIT Inc Pa Pref 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.
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. ARMOUR Residential REIT Inc Pa Pref can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Consumer Financial Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for ARMOUR Residential REIT Inc Pa Pref in the Consumer Financial Services industry. Now ARMOUR Residential REIT Inc Pa Pref can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for ARMOUR Residential REIT Inc Pa Pref 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.
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 ARMOUR Residential REIT Inc Pa Pref 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.
Building a culture of innovation
– managers at ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services industry.
Threats ARMOUR Residential REIT Inc Pa Pref External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ARMOUR Residential REIT Inc Pa Pref are -
Shortening product life cycle
– it is one of the major threat that ARMOUR Residential REIT Inc Pa Pref is facing in Consumer Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services industry and other sectors.
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. ARMOUR Residential REIT Inc Pa Pref 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ARMOUR Residential REIT Inc Pa Pref in Consumer Financial Services industry. The Consumer Financial 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.
Environmental challenges
– ARMOUR Residential REIT Inc Pa Pref 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. ARMOUR Residential REIT Inc Pa Pref can take advantage of this fund but it will also bring new competitors in the Consumer Financial Services industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, ARMOUR Residential REIT Inc Pa Pref may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Consumer Financial Services sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Consumer Financial Services industry are lowering. It can presents ARMOUR Residential REIT Inc Pa Pref with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Consumer Financial Services sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref prominent markets.
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 ARMOUR Residential REIT Inc Pa Pref business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– ARMOUR Residential REIT Inc Pa Pref has witnessed rapid integration of technology during Covid-19 in the Consumer Financial Services industry. As one of the leading players in the industry, ARMOUR Residential REIT Inc Pa Pref needs to keep up with the evolution of technology in the Consumer Financial Services sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– ARMOUR Residential REIT Inc Pa Pref 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.
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 ARMOUR Residential REIT Inc Pa Pref in the Consumer Financial Services sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of ARMOUR Residential REIT Inc Pa Pref Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref 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 ARMOUR Residential REIT Inc Pa Pref needs to make to build a sustainable competitive advantage.