U.S. Bancorp DRC (USBC34) SWOT Analysis / TOWS Matrix / MBA Resources
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Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for U.S. Bancorp DRC (Brazil)
Based on various researches at Oak Spring University , U.S. Bancorp DRC is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, wage bills are increasing,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that U.S. Bancorp DRC can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the U.S. Bancorp DRC, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which U.S. Bancorp DRC operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of U.S. Bancorp DRC can be done for the following purposes –
1. Strategic planning of U.S. Bancorp DRC
2. Improving business portfolio management of U.S. Bancorp DRC
3. Assessing feasibility of the new initiative in Brazil
4. Making a NA sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of U.S. Bancorp DRC
Strengths of U.S. Bancorp DRC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of U.S. Bancorp DRC are -
Highly skilled collaborators
– U.S. Bancorp DRC has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive NA industry. Secondly the value chain collaborators of U.S. Bancorp DRC have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of U.S. Bancorp DRC comprises – understanding the underlying the factors in the NA 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)
– U.S. Bancorp DRC has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – U.S. Bancorp DRC staying ahead in the NA industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the U.S. Bancorp DRC are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Superior customer experience
– The customer experience strategy of U.S. Bancorp DRC in NA industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– U.S. Bancorp DRC has one of the best training and development program in NA 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.
Organizational Resilience of U.S. Bancorp DRC
– The covid-19 pandemic has put organizational resilience at the centre of everthing U.S. Bancorp DRC does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in NA
– U.S. Bancorp DRC is one of the leading players in the NA industry in Brazil. Over the years it has not only transformed the business landscape in the NA industry in Brazil but also across the existing markets. The ability to lead change has enabled U.S. Bancorp DRC in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– U.S. Bancorp DRC is one of the leading players in the NA industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– U.S. Bancorp DRC is present in almost all the verticals within the NA industry. This has provided U.S. Bancorp DRC a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– U.S. Bancorp DRC has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled U.S. Bancorp DRC to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- U.S. Bancorp DRC 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 U.S. Bancorp DRC is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at U.S. Bancorp DRC emphasize – knowledge, initiative, and innovation.
Weaknesses of U.S. Bancorp DRC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of U.S. Bancorp DRC are -
Slow to strategic competitive environment developments
– As U.S. Bancorp DRC is one of the leading players in the NA industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the NA industry in last five years.
Employees’ less understanding of U.S. Bancorp DRC strategy
– From the outside it seems that the employees of U.S. Bancorp DRC 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.
Lack of clear differentiation of U.S. Bancorp DRC products
– To increase the profitability and margins on the products, U.S. Bancorp DRC needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Brazil, U.S. Bancorp DRC needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at U.S. Bancorp DRC, in the dynamic environment of NA industry it has struggled to respond to the nimble upstart competition. U.S. Bancorp DRC has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 U.S. Bancorp DRC supply chain. Even after few cautionary changes, U.S. Bancorp DRC is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left U.S. Bancorp DRC vulnerable to further global disruptions in South East Asia.
Skills based hiring in NA industry
– The stress on hiring functional specialists at U.S. Bancorp DRC 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.
No frontier risks strategy
– From the 10K / annual statement of U.S. Bancorp DRC, it seems that company is thinking out the frontier risks that can impact NA 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, U.S. Bancorp DRC has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the NA industry over the last five years. U.S. Bancorp DRC even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on U.S. Bancorp DRC ‘s star products
– The top 2 products and services of U.S. Bancorp DRC still accounts for major business revenue. This dependence on star products in NA industry has resulted into insufficient focus on developing new products, even though U.S. Bancorp DRC has relatively successful track record of launching new products.
Need for greater diversity
– U.S. Bancorp DRC has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
U.S. Bancorp DRC Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of U.S. Bancorp DRC are -
Learning at scale
– Online learning technologies has now opened space for U.S. Bancorp DRC to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– U.S. Bancorp DRC can improve the customer journey of consumers in the NA 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.
Leveraging digital technologies
– U.S. Bancorp DRC can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in NA industry, but it has also influenced the consumer preferences. U.S. Bancorp DRC can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 U.S. Bancorp DRC 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.
Use of Bitcoin and other crypto currencies for transactions in NA industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for U.S. Bancorp DRC in the NA industry. Now U.S. Bancorp DRC can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, U.S. Bancorp DRC can use these opportunities to build new business models that can help the communities that U.S. Bancorp DRC operates in. Secondly it can use opportunities from government spending in NA sector.
Developing new processes and practices
– U.S. Bancorp DRC can develop new processes and procedures in NA 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 U.S. Bancorp DRC can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the NA industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. U.S. Bancorp DRC 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. U.S. Bancorp DRC 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.
Building a culture of innovation
– managers at U.S. Bancorp DRC can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the NA industry.
Manufacturing automation
– U.S. Bancorp DRC can use the latest technology developments to improve its manufacturing and designing process in NA 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.
Better consumer reach
– The expansion of the 5G network will help U.S. Bancorp DRC to increase its market reach. U.S. Bancorp DRC will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats U.S. Bancorp DRC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of U.S. Bancorp DRC are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, U.S. Bancorp DRC may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of NA 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 U.S. Bancorp DRC business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– U.S. Bancorp DRC 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 NA industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to NA industry are lowering. It can presents U.S. Bancorp DRC with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the NA sector.
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.
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. U.S. Bancorp DRC needs to understand the core reasons impacting the NA industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– U.S. Bancorp DRC has witnessed rapid integration of technology during Covid-19 in the NA industry. As one of the leading players in the industry, U.S. Bancorp DRC needs to keep up with the evolution of technology in the NA 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.
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 U.S. Bancorp DRC in the NA sector and impact the bottomline of the organization.
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 U.S. Bancorp DRC demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in NA industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for U.S. Bancorp DRC in NA industry. The NA 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 U.S. Bancorp DRC.
Stagnating economy with rate increase
– U.S. Bancorp DRC can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the NA industry.
Weighted SWOT Analysis of U.S. Bancorp DRC Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at U.S. Bancorp DRC needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of U.S. Bancorp DRC is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of U.S. Bancorp DRC is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of U.S. Bancorp DRC to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that U.S. Bancorp DRC needs to make to build a sustainable competitive advantage.