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 inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, technology disruption,
cloud computing is disrupting traditional business models, increasing commodity prices, 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 -
Digital Transformation in NA industry
- digital transformation varies from industry to industry. For U.S. Bancorp DRC digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. U.S. Bancorp DRC has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Analytics focus
– U.S. Bancorp DRC 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 NA industry. The technology infrastructure of Brazil is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– 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.
Strong track record of project management in the NA industry
– U.S. Bancorp DRC is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Successful track record of launching new products
– U.S. Bancorp DRC has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. U.S. Bancorp DRC 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.
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.
Low bargaining power of suppliers
– Suppliers of U.S. Bancorp DRC in the NA sector have low bargaining power. U.S. Bancorp DRC has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps U.S. Bancorp DRC to manage not only supply disruptions but also source products at highly competitive prices.
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.
High switching costs
– The high switching costs that U.S. Bancorp DRC 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.
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.
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 -
Compensation and incentives
– The revenue per employee of U.S. Bancorp DRC is just above the NA 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 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.
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 operating costs
– Compare to the competitors, U.S. Bancorp DRC has high operating costs in the NA industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract U.S. Bancorp DRC lucrative customers.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the NA industry, U.S. Bancorp DRC needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, U.S. Bancorp DRC is slow explore the new channels of communication. These new channels of communication can help U.S. Bancorp DRC to provide better information regarding NA products and services. It can also build an online community to further reach out to potential customers.
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.
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 -
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.
Creating value in data economy
– The success of analytics program of U.S. Bancorp DRC has opened avenues for new revenue streams for the organization in NA industry. This can help U.S. Bancorp DRC to build a more holistic ecosystem for U.S. Bancorp DRC products in the NA industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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.
Loyalty marketing
– U.S. Bancorp DRC 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.
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.
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.
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. U.S. Bancorp DRC can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, U.S. Bancorp DRC 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.
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.
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 -
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.
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.
Environmental challenges
– U.S. Bancorp DRC 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. U.S. Bancorp DRC can take advantage of this fund but it will also bring new competitors in the NA industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, U.S. Bancorp DRC 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 U.S. Bancorp DRC prominent markets.
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.
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. U.S. Bancorp DRC 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.
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.
Shortening product life cycle
– it is one of the major threat that U.S. Bancorp DRC is facing in NA sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.
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.
High dependence on third party suppliers
– U.S. Bancorp DRC 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.
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.
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.
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.