Babson Capital Global Short Dura HY (BGH) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Babson Capital Global Short Dura HY (United States)
Based on various researches at Oak Spring University , Babson Capital Global Short Dura HY is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing commodity prices, cloud computing is disrupting traditional business models, there is backlash against globalization,
technology disruption, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Babson Capital Global Short Dura HY
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Babson Capital Global Short Dura HY can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Babson Capital Global Short Dura HY, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY can be done for the following purposes –
1. Strategic planning of Babson Capital Global Short Dura HY
2. Improving business portfolio management of Babson Capital Global Short Dura HY
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Babson Capital Global Short Dura HY
Strengths of Babson Capital Global Short Dura HY | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Babson Capital Global Short Dura HY are -
Low bargaining power of suppliers
– Suppliers of Babson Capital Global Short Dura HY in the sector have low bargaining power. Babson Capital Global Short Dura HY has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Babson Capital Global Short Dura HY to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Babson Capital Global Short Dura HY in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Babson Capital Global Short Dura HY digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Babson Capital Global Short Dura HY 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.
High brand equity
– Babson Capital Global Short Dura HY has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Babson Capital Global Short Dura HY to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Babson Capital Global Short Dura HY is present in almost all the verticals within the industry. This has provided Babson Capital Global Short Dura HY 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.
Cross disciplinary teams
– Horizontal connected teams at the Babson Capital Global Short Dura HY 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
– Babson Capital Global Short Dura HY has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Babson Capital Global Short Dura HY 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.
Highly skilled collaborators
– Babson Capital Global Short Dura HY has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Babson Capital Global Short Dura HY have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Babson Capital Global Short Dura HY comprises – understanding the underlying the factors in the 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.
Strong track record of project management in the industry
– Babson Capital Global Short Dura HY is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Babson Capital Global Short Dura HY 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.
Training and development
– Babson Capital Global Short Dura HY has one of the best training and development program in 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.
Weaknesses of Babson Capital Global Short Dura HY | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Babson Capital Global Short Dura HY are -
Slow to strategic competitive environment developments
– As Babson Capital Global Short Dura HY is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– From the outside it seems that Babson Capital Global Short Dura HY needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Babson Capital Global Short Dura HY can leverage the sales team experience to cultivate customer relationships as Babson Capital Global Short Dura HY is planning to shift buying processes online.
High cash cycle compare to competitors
Babson Capital Global Short Dura HY has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Babson Capital Global Short Dura HY strategy
– From the outside it seems that the employees of Babson Capital Global Short Dura HY 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.
Ability to respond to the competition
– As the decision making is very deliberative at Babson Capital Global Short Dura HY, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Babson Capital Global Short Dura HY has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Babson Capital Global Short Dura HY has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Babson Capital Global Short Dura HY should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Babson Capital Global Short Dura HY is dominated by functional specialists. It is not different from other players in the industry, but Babson Capital Global Short Dura HY needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Babson Capital Global Short Dura HY to focus more on services in the industry rather than just following the product oriented approach.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Babson Capital Global Short Dura HY 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 industry.
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 Babson Capital Global Short Dura HY supply chain. Even after few cautionary changes, Babson Capital Global Short Dura HY is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Babson Capital Global Short Dura HY vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Babson Capital Global Short Dura HY products
– To increase the profitability and margins on the products, Babson Capital Global Short Dura HY needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Babson Capital Global Short Dura HY is just above the 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.
Babson Capital Global Short Dura HY Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Babson Capital Global Short Dura HY are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Babson Capital Global Short Dura HY can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Babson Capital Global Short Dura HY in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Babson Capital Global Short Dura HY is facing challenges because of the dominance of functional experts in the organization. Babson Capital Global Short Dura HY can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Babson Capital Global Short Dura HY can use the latest technology developments to improve its manufacturing and designing process in 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.
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. Babson Capital Global Short Dura HY can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Babson Capital Global Short Dura HY can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Babson Capital Global Short Dura HY 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.
Creating value in data economy
– The success of analytics program of Babson Capital Global Short Dura HY has opened avenues for new revenue streams for the organization in industry. This can help Babson Capital Global Short Dura HY to build a more holistic ecosystem for Babson Capital Global Short Dura HY products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Babson Capital Global Short Dura HY has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Babson Capital Global Short Dura HY to build a competitive advantage using analytics. The analytics driven competitive advantage can help Babson Capital Global Short Dura HY to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Babson Capital Global Short Dura HY 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 industry.
Developing new processes and practices
– Babson Capital Global Short Dura HY can develop new processes and procedures in 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 industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Babson Capital Global Short Dura HY 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. Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Babson Capital Global Short Dura HY 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. Babson Capital Global Short Dura HY needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Babson Capital Global Short Dura HY with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Babson Capital Global Short Dura HY is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Babson Capital Global Short Dura HY may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
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.
Environmental challenges
– Babson Capital Global Short Dura HY 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. Babson Capital Global Short Dura HY can take advantage of this fund but it will also bring new competitors in the industry.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Babson Capital Global Short Dura HY can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Babson Capital Global Short Dura HY
– 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 Babson Capital Global Short Dura HY.
Consumer confidence and its impact on Babson Capital Global Short Dura HY 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 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 Babson Capital Global Short Dura HY in industry. The 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 Babson Capital Global Short Dura HY.
Technology acceleration in Forth Industrial Revolution
– Babson Capital Global Short Dura HY has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Babson Capital Global Short Dura HY needs to keep up with the evolution of technology in the 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY prominent markets.
Weighted SWOT Analysis of Babson Capital Global Short Dura HY Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY needs to make to build a sustainable competitive advantage.
