First Trust Specialty Finance Fin (FGB) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Financial Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for First Trust Specialty Finance Fin (United States)
Based on various researches at Oak Spring University , First Trust Specialty Finance Fin is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, geopolitical disruptions,
wage bills are increasing, there is backlash against globalization, etc
Introduction to SWOT Analysis of First Trust Specialty Finance Fin
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that First Trust Specialty Finance Fin can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the First Trust Specialty Finance Fin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin can be done for the following purposes –
1. Strategic planning of First Trust Specialty Finance Fin
2. Improving business portfolio management of First Trust Specialty Finance Fin
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 First Trust Specialty Finance Fin
Strengths of First Trust Specialty Finance Fin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of First Trust Specialty Finance Fin are -
Superior customer experience
– The customer experience strategy of First Trust Specialty Finance Fin in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– First Trust Specialty Finance Fin is one of the leading players in the Misc. Financial Services industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at First Trust Specialty Finance Fin emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the First Trust Specialty Finance Fin 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 switching costs
– The high switching costs that First Trust Specialty Finance Fin 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.
Operational resilience
– The operational resilience strategy of First Trust Specialty Finance Fin 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.
Digital Transformation in Misc. Financial Services industry
- digital transformation varies from industry to industry. For First Trust Specialty Finance Fin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. First Trust Specialty Finance Fin 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.
Sustainable margins compare to other players in Misc. Financial Services industry
– First Trust Specialty Finance Fin has clearly differentiated products in the market place. This has enabled First Trust Specialty Finance Fin to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped First Trust Specialty Finance Fin to invest into research and development (R&D) and innovation.
Organizational Resilience of First Trust Specialty Finance Fin
– The covid-19 pandemic has put organizational resilience at the centre of everthing First Trust Specialty Finance Fin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Misc. Financial Services
– First Trust Specialty Finance Fin is one of the leading players in the Misc. Financial Services industry in United States. Over the years it has not only transformed the business landscape in the Misc. Financial Services industry in United States but also across the existing markets. The ability to lead change has enabled First Trust Specialty Finance Fin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– First Trust Specialty Finance Fin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. First Trust Specialty Finance Fin 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.
Weaknesses of First Trust Specialty Finance Fin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of First Trust Specialty Finance Fin are -
Products dominated business model
– Even though First Trust Specialty Finance Fin 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. First Trust Specialty Finance Fin should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Misc. Financial Services industry
– The stress on hiring functional specialists at First Trust Specialty Finance Fin 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.
Capital Spending Reduction
– Even during the low interest decade, First Trust Specialty Finance Fin 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 Misc. Financial Services industry using digital technology.
High dependence on First Trust Specialty Finance Fin ‘s star products
– The top 2 products and services of First Trust Specialty Finance Fin still accounts for major business revenue. This dependence on star products in Misc. Financial Services industry has resulted into insufficient focus on developing new products, even though First Trust Specialty Finance Fin has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin can leverage the sales team experience to cultivate customer relationships as First Trust Specialty Finance Fin is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, First Trust Specialty Finance Fin is slow explore the new channels of communication. These new channels of communication can help First Trust Specialty Finance Fin 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.
Increasing silos among functional specialists
– The organizational structure of First Trust Specialty Finance Fin is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but First Trust Specialty Finance Fin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help First Trust Specialty Finance Fin to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.
Need for greater diversity
– First Trust Specialty Finance Fin has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee of First Trust Specialty Finance Fin 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.
No frontier risks strategy
– From the 10K / annual statement of First Trust Specialty Finance Fin, 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, First Trust Specialty Finance Fin 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.
First Trust Specialty Finance Fin Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of First Trust Specialty Finance Fin are -
Better consumer reach
– The expansion of the 5G network will help First Trust Specialty Finance Fin to increase its market reach. First Trust Specialty Finance Fin 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.
Buying journey improvements
– First Trust Specialty Finance Fin can improve the customer journey of consumers in the Misc. Financial Services 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.
Developing new processes and practices
– First Trust Specialty Finance Fin can develop new processes and procedures in Misc. Financial Services 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.
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. First Trust Specialty Finance Fin can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– First Trust Specialty Finance Fin 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.
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 First Trust Specialty Finance Fin 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.
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 First Trust Specialty Finance Fin in the Misc. Financial Services industry. Now First Trust Specialty Finance Fin 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, First Trust Specialty Finance Fin is facing challenges because of the dominance of functional experts in the organization. First Trust Specialty Finance Fin 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.
Using analytics as competitive advantage
– First Trust Specialty Finance Fin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Financial Services sector. This continuous investment in analytics has enabled First Trust Specialty Finance Fin to build a competitive advantage using analytics. The analytics driven competitive advantage can help First Trust Specialty Finance Fin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, First Trust Specialty Finance Fin can use these opportunities to build new business models that can help the communities that First Trust Specialty Finance Fin operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.
Learning at scale
– Online learning technologies has now opened space for First Trust Specialty Finance Fin 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, First Trust Specialty Finance Fin 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.
Threats First Trust Specialty Finance Fin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of First Trust Specialty Finance Fin are -
Easy access to finance
– Easy access to finance in Misc. Financial Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. First Trust Specialty Finance Fin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 First Trust Specialty Finance Fin in the Misc. Financial Services sector and impact the bottomline of the organization.
High dependence on third party suppliers
– First Trust Specialty Finance Fin 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.
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. First Trust Specialty Finance Fin 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, First Trust Specialty Finance Fin 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.
Stagnating economy with rate increase
– First Trust Specialty Finance Fin 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents First Trust Specialty Finance Fin 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.
Regulatory challenges
– First Trust Specialty Finance Fin 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.
Shortening product life cycle
– it is one of the major threat that First Trust Specialty Finance Fin is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 First Trust Specialty Finance Fin business can come under increasing regulations regarding data privacy, data security, etc.
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 First Trust Specialty Finance Fin.
Consumer confidence and its impact on First Trust Specialty Finance Fin 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 Misc. Financial Services industry and other sectors.
Weighted SWOT Analysis of First Trust Specialty Finance Fin Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin 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 First Trust Specialty Finance Fin needs to make to build a sustainable competitive advantage.
