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 – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, technology disruption, increasing household debt because of falling income levels, geopolitical disruptions, central banks are concerned over increasing inflation, increasing energy prices,
increasing commodity prices, there is backlash against globalization, 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 switching costs
– The high switching costs that ARMOUR Residential REIT Inc Pa Pref 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 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.
Organizational Resilience of ARMOUR Residential REIT Inc Pa Pref
– The covid-19 pandemic has put organizational resilience at the centre of everthing ARMOUR Residential REIT Inc Pa Pref does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Operational resilience
– The operational resilience strategy of ARMOUR Residential REIT Inc Pa Pref comprises – understanding the underlying the factors in the Consumer Financial Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Effective Research and Development (R&D)
– 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.
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.
Superior customer experience
– The customer experience strategy of ARMOUR Residential REIT Inc Pa Pref in Consumer Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of United States, ARMOUR Residential REIT Inc Pa Pref needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Consumer Financial Services industry
– The stress on hiring functional specialists at ARMOUR Residential REIT Inc Pa Pref 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.
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.
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 ARMOUR Residential REIT Inc Pa Pref supply chain. Even after few cautionary changes, ARMOUR Residential REIT Inc Pa Pref is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left ARMOUR Residential REIT Inc Pa Pref vulnerable to further global disruptions in South East Asia.
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.
High operating costs
– Compare to the competitors, ARMOUR Residential REIT Inc Pa Pref has high operating costs in the Consumer Financial Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract ARMOUR Residential REIT Inc Pa Pref lucrative customers.
Slow to strategic competitive environment developments
– As ARMOUR Residential REIT Inc Pa Pref is one of the leading players in the Consumer Financial Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Consumer Financial Services industry in last five years.
High cash cycle compare to competitors
ARMOUR Residential REIT Inc Pa Pref has a high cash cycle compare to other players in the Consumer Financial 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.
Ability to respond to the competition
– As the decision making is very deliberative at ARMOUR Residential REIT Inc Pa Pref, in the dynamic environment of Consumer Financial Services industry it has struggled to respond to the nimble upstart competition. ARMOUR Residential REIT Inc Pa Pref has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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 -
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ARMOUR Residential REIT Inc Pa Pref can use these opportunities to build new business models that can help the communities that ARMOUR Residential REIT Inc Pa Pref operates in. Secondly it can use opportunities from government spending in Consumer Financial Services sector.
Creating value in data economy
– The success of analytics program of ARMOUR Residential REIT Inc Pa Pref has opened avenues for new revenue streams for the organization in Consumer Financial Services industry. This can help ARMOUR Residential REIT Inc Pa Pref to build a more holistic ecosystem for ARMOUR Residential REIT Inc Pa Pref products in the Consumer Financial Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ARMOUR Residential REIT Inc Pa Pref can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Loyalty marketing
– ARMOUR Residential REIT Inc Pa Pref has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 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.
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.
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 -
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. ARMOUR Residential REIT Inc Pa Pref needs to understand the core reasons impacting the Consumer Financial Services industry. This will help it in building a better workplace.
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.
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.
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.
Stagnating economy with rate increase
– ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services industry.
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.
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.
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.
Easy access to finance
– Easy access to finance in Consumer Financial Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. ARMOUR Residential REIT Inc Pa Pref can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
Regulatory challenges
– ARMOUR Residential REIT Inc Pa Pref 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 Consumer Financial Services industry regulations.
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.
