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 – increasing energy prices, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, 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 -
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.
Sustainable margins compare to other players in industry
– Babson Capital Global Short Dura HY has clearly differentiated products in the market place. This has enabled Babson Capital Global Short Dura HY to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Babson Capital Global Short Dura HY to invest into research and development (R&D) and innovation.
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.
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.
Organizational Resilience of Babson Capital Global Short Dura HY
– The covid-19 pandemic has put organizational resilience at the centre of everthing Babson Capital Global Short Dura HY does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Analytics focus
– Babson Capital Global Short Dura HY 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 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.
Effective Research and Development (R&D)
– Babson Capital Global Short Dura HY has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Babson Capital Global Short Dura HY staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Babson Capital Global Short Dura HY has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Babson Capital Global Short Dura HY, it seems that company is thinking out the frontier risks that can impact 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.
High dependence on Babson Capital Global Short Dura HY ‘s star products
– The top 2 products and services of Babson Capital Global Short Dura HY still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Babson Capital Global Short Dura HY has relatively successful track record of launching new products.
Skills based hiring in industry
– The stress on hiring functional specialists at Babson Capital Global Short Dura HY 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 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.
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.
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.
Interest costs
– Compare to the competition, Babson Capital Global Short Dura HY 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 industry, Babson Capital Global Short Dura HY 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.
Low market penetration in new markets
– Outside its home market of United States, Babson Capital Global Short Dura HY needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Babson Capital Global Short Dura HY has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Babson Capital Global Short Dura HY lucrative customers.
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 -
Better consumer reach
– The expansion of the 5G network will help Babson Capital Global Short Dura HY to increase its market reach. Babson Capital Global Short Dura HY 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Babson Capital Global Short Dura HY can use these opportunities to build new business models that can help the communities that Babson Capital Global Short Dura HY operates in. Secondly it can use opportunities from government spending in sector.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Babson Capital Global Short Dura HY in the industry. Now Babson Capital Global Short Dura HY can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Babson Capital Global Short Dura HY can improve the customer journey of consumers in the 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
– Babson Capital Global Short Dura HY 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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Babson Capital Global Short Dura HY 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 Babson Capital Global Short Dura HY to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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 -
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. Babson Capital Global Short Dura HY 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.
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.
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.
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.
Stagnating economy with rate increase
– Babson Capital Global Short Dura HY 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 industry.
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 dependence on third party suppliers
– Babson Capital Global Short Dura HY 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.
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.
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 Babson Capital Global Short Dura HY business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.