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 – there is increasing trade war between United States & China, wage bills are increasing, central banks are concerned over increasing inflation, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
increasing transportation and logistics costs, geopolitical disruptions, 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 -
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.
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.
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.
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.
Innovation driven organization
– U.S. Bancorp DRC is one of the most innovative firm in NA sector.
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.
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.
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.
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.
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.
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.
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.
Products dominated business model
– Even though U.S. Bancorp DRC has some of the most successful models in the NA industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. U.S. Bancorp DRC should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of U.S. Bancorp DRC is dominated by functional specialists. It is not different from other players in the NA industry, but U.S. Bancorp DRC needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help U.S. Bancorp DRC to focus more on services in the NA industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, U.S. Bancorp DRC 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.
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.
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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for U.S. Bancorp DRC in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the NA industry, and it will provide faster access to the consumers.
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.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, U.S. Bancorp DRC can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help U.S. Bancorp DRC to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
Increasing wage structure of U.S. Bancorp DRC
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of U.S. Bancorp DRC.
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.
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.
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.
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.
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.
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.
