Based on various researches at Oak Spring University , MFS Investment Grade Muni Trust is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of MFS Investment Grade Muni Trust
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MFS Investment Grade Muni Trust can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MFS Investment Grade Muni Trust, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust can be done for the following purposes –
1. Strategic planning of MFS Investment Grade Muni Trust
2. Improving business portfolio management of MFS Investment Grade Muni Trust
3. Assessing feasibility of the new initiative in United States
4. Making a Misc. Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MFS Investment Grade Muni Trust
Strengths of MFS Investment Grade Muni Trust | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MFS Investment Grade Muni Trust are -
Innovation driven organization
– MFS Investment Grade Muni Trust is one of the most innovative firm in Misc. Financial Services sector.
Digital Transformation in Misc. Financial Services industry
- digital transformation varies from industry to industry. For MFS Investment Grade Muni Trust digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. MFS Investment Grade Muni Trust 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.
Highly skilled collaborators
– MFS Investment Grade Muni Trust has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Financial Services industry. Secondly the value chain collaborators of MFS Investment Grade Muni Trust have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– MFS Investment Grade Muni Trust has one of the best training and development program in Financial 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.
Effective Research and Development (R&D)
– MFS Investment Grade Muni Trust has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – MFS Investment Grade Muni Trust staying ahead in the Misc. Financial Services 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 MFS Investment Grade Muni Trust 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
– MFS Investment Grade Muni Trust has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. MFS Investment Grade Muni Trust 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.
Operational resilience
– The operational resilience strategy of MFS Investment Grade Muni Trust comprises – understanding the underlying the factors in the Misc. Financial Services 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.
High switching costs
– The high switching costs that MFS Investment Grade Muni Trust 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.
Learning organization
- MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at MFS Investment Grade Muni Trust emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of MFS Investment Grade Muni Trust in the Financial sector have low bargaining power. MFS Investment Grade Muni Trust has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps MFS Investment Grade Muni Trust to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Misc. Financial Services industry
– MFS Investment Grade Muni Trust has clearly differentiated products in the market place. This has enabled MFS Investment Grade Muni Trust to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped MFS Investment Grade Muni Trust to invest into research and development (R&D) and innovation.
Weaknesses of MFS Investment Grade Muni Trust | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MFS Investment Grade Muni Trust are -
Compensation and incentives
– The revenue per employee of MFS Investment Grade Muni Trust is just above the Misc. Financial Services 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, MFS Investment Grade Muni Trust 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 Misc. Financial Services industry
– The stress on hiring functional specialists at MFS Investment Grade Muni Trust 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 cash cycle compare to competitors
MFS Investment Grade Muni Trust has a high cash cycle compare to other players in the Misc. Financial Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of MFS Investment Grade Muni Trust is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but MFS Investment Grade Muni Trust needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help MFS Investment Grade Muni Trust to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.
Lack of clear differentiation of MFS Investment Grade Muni Trust products
– To increase the profitability and margins on the products, MFS Investment Grade Muni Trust needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As MFS Investment Grade Muni Trust is one of the leading players in the Misc. Financial Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Financial Services industry in last five years.
Products dominated business model
– Even though MFS Investment Grade Muni Trust has some of the most successful models in the Misc. Financial Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. MFS Investment Grade Muni Trust should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that MFS Investment Grade Muni Trust needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Financial Services industry have deep experience in developing customer relationships. Marketing department at MFS Investment Grade Muni Trust can leverage the sales team experience to cultivate customer relationships as MFS Investment Grade Muni Trust is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of MFS Investment Grade Muni Trust, it seems that company is thinking out the frontier risks that can impact Misc. Financial Services 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MFS Investment Grade Muni Trust is slow explore the new channels of communication. These new channels of communication can help MFS Investment Grade Muni Trust to provide better information regarding Misc. Financial Services products and services. It can also build an online community to further reach out to potential customers.
MFS Investment Grade Muni Trust Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MFS Investment Grade Muni Trust are -
Manufacturing automation
– MFS Investment Grade Muni Trust can use the latest technology developments to improve its manufacturing and designing process in Misc. Financial Services 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. MFS Investment Grade Muni Trust can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for MFS Investment Grade Muni Trust in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Financial Services industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for MFS Investment Grade Muni Trust 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Financial Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for MFS Investment Grade Muni Trust in the Misc. Financial Services industry. Now MFS Investment Grade Muni Trust can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, MFS Investment Grade Muni Trust is facing challenges because of the dominance of functional experts in the organization. MFS Investment Grade Muni Trust can utilize new technology in the field of Misc. Financial Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, MFS Investment Grade Muni Trust 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust has opened avenues for new revenue streams for the organization in Misc. Financial Services industry. This can help MFS Investment Grade Muni Trust to build a more holistic ecosystem for MFS Investment Grade Muni Trust products in the Misc. Financial Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 MFS Investment Grade Muni Trust 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.
Loyalty marketing
– MFS Investment Grade Muni Trust 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Financial Services industry, but it has also influenced the consumer preferences. MFS Investment Grade Muni Trust can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats MFS Investment Grade Muni Trust External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MFS Investment Grade Muni Trust are -
Environmental challenges
– MFS Investment Grade Muni Trust 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. MFS Investment Grade Muni Trust can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
High dependence on third party suppliers
– MFS Investment Grade Muni Trust 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust prominent markets.
Technology acceleration in Forth Industrial Revolution
– MFS Investment Grade Muni Trust has witnessed rapid integration of technology during Covid-19 in the Misc. Financial Services industry. As one of the leading players in the industry, MFS Investment Grade Muni Trust needs to keep up with the evolution of technology in the Misc. Financial Services 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.
Stagnating economy with rate increase
– MFS Investment Grade Muni Trust 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 Misc. Financial Services industry.
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. MFS Investment Grade Muni Trust needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.
Regulatory challenges
– MFS Investment Grade Muni Trust 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 Misc. Financial Services industry regulations.
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.
Increasing wage structure of MFS Investment Grade Muni Trust
– 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 MFS Investment Grade Muni Trust.
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. MFS Investment Grade Muni Trust 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents MFS Investment Grade Muni Trust with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Financial Services sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, MFS Investment Grade Muni Trust may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Financial Services 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.
Weighted SWOT Analysis of MFS Investment Grade Muni Trust Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust 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 MFS Investment Grade Muni Trust needs to make to build a sustainable competitive advantage.