First Mid Illinois Bancshares (FMBH) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for First Mid Illinois Bancshares (United States)
Based on various researches at Oak Spring University , First Mid Illinois Bancshares is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is backlash against globalization,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of First Mid Illinois Bancshares
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that First Mid Illinois Bancshares can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the First Mid Illinois Bancshares, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which First Mid Illinois Bancshares 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 Mid Illinois Bancshares can be done for the following purposes –
1. Strategic planning of First Mid Illinois Bancshares
2. Improving business portfolio management of First Mid Illinois Bancshares
3. Assessing feasibility of the new initiative in United States
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of First Mid Illinois Bancshares
Strengths of First Mid Illinois Bancshares | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of First Mid Illinois Bancshares are -
Successful track record of launching new products
– First Mid Illinois Bancshares has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. First Mid Illinois Bancshares 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.
Innovation driven organization
– First Mid Illinois Bancshares is one of the most innovative firm in Regional Banks sector.
Training and development
– First Mid Illinois Bancshares 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.
Low bargaining power of suppliers
– Suppliers of First Mid Illinois Bancshares in the Financial sector have low bargaining power. First Mid Illinois Bancshares has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps First Mid Illinois Bancshares to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Regional Banks industry
– First Mid Illinois Bancshares has clearly differentiated products in the market place. This has enabled First Mid Illinois Bancshares to fetch slight price premium compare to the competitors in the Regional Banks industry. The sustainable margins have also helped First Mid Illinois Bancshares to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of First Mid Illinois Bancshares in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- First Mid Illinois Bancshares 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 Mid Illinois Bancshares is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at First Mid Illinois Bancshares emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– First Mid Illinois Bancshares has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Regional Banks industry. Secondly the value chain collaborators of First Mid Illinois Bancshares have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of First Mid Illinois Bancshares comprises – understanding the underlying the factors in the Regional Banks 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 Regional Banks industry
– First Mid Illinois Bancshares is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Regional Banks industry
- digital transformation varies from industry to industry. For First Mid Illinois Bancshares digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. First Mid Illinois Bancshares 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
– First Mid Illinois Bancshares has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled First Mid Illinois Bancshares to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of First Mid Illinois Bancshares | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of First Mid Illinois Bancshares are -
Ability to respond to the competition
– As the decision making is very deliberative at First Mid Illinois Bancshares, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. First Mid Illinois Bancshares has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that First Mid Illinois Bancshares needs to have more collaboration between its sales team and marketing team. Sales professionals in the Regional Banks industry have deep experience in developing customer relationships. Marketing department at First Mid Illinois Bancshares can leverage the sales team experience to cultivate customer relationships as First Mid Illinois Bancshares is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of United States, First Mid Illinois Bancshares needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though First Mid Illinois Bancshares has some of the most successful models in the Regional Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. First Mid Illinois Bancshares should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of First Mid Illinois Bancshares strategy
– From the outside it seems that the employees of First Mid Illinois Bancshares 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.
Interest costs
– Compare to the competition, First Mid Illinois Bancshares 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.
Need for greater diversity
– First Mid Illinois Bancshares 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.
No frontier risks strategy
– From the 10K / annual statement of First Mid Illinois Bancshares, it seems that company is thinking out the frontier risks that can impact Regional Banks 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 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 First Mid Illinois Bancshares supply chain. Even after few cautionary changes, First Mid Illinois Bancshares is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left First Mid Illinois Bancshares vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of First Mid Illinois Bancshares is just above the Regional Banks 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 Regional Banks industry, First Mid Illinois Bancshares 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 Mid Illinois Bancshares Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of First Mid Illinois Bancshares are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Regional Banks industry, but it has also influenced the consumer preferences. First Mid Illinois Bancshares can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for First Mid Illinois Bancshares 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for First Mid Illinois Bancshares in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Regional Banks industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of First Mid Illinois Bancshares has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help First Mid Illinois Bancshares to build a more holistic ecosystem for First Mid Illinois Bancshares products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, First Mid Illinois Bancshares 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 First Mid Illinois Bancshares to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for First Mid Illinois Bancshares 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 Mid Illinois Bancshares 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 Mid Illinois Bancshares 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects First Mid Illinois Bancshares can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at First Mid Illinois Bancshares 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 Regional Banks industry.
Developing new processes and practices
– First Mid Illinois Bancshares can develop new processes and procedures in Regional Banks 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.
Using analytics as competitive advantage
– First Mid Illinois Bancshares has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Regional Banks sector. This continuous investment in analytics has enabled First Mid Illinois Bancshares to build a competitive advantage using analytics. The analytics driven competitive advantage can help First Mid Illinois Bancshares to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– First Mid Illinois Bancshares can improve the customer journey of consumers in the Regional Banks 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.
Manufacturing automation
– First Mid Illinois Bancshares can use the latest technology developments to improve its manufacturing and designing process in Regional Banks 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.
Threats First Mid Illinois Bancshares External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of First Mid Illinois Bancshares 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. First Mid Illinois Bancshares 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.
Easy access to finance
– Easy access to finance in Regional Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. First Mid Illinois Bancshares can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– First Mid Illinois Bancshares 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. First Mid Illinois Bancshares can take advantage of this fund but it will also bring new competitors in the Regional Banks industry.
Increasing wage structure of First Mid Illinois Bancshares
– 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 First Mid Illinois Bancshares.
Regulatory challenges
– First Mid Illinois Bancshares 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 Regional Banks industry regulations.
Technology acceleration in Forth Industrial Revolution
– First Mid Illinois Bancshares has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, First Mid Illinois Bancshares needs to keep up with the evolution of technology in the Regional Banks 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.
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.
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 Mid Illinois Bancshares business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Mid Illinois Bancshares in the Regional Banks sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents First Mid Illinois Bancshares with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
Stagnating economy with rate increase
– First Mid Illinois Bancshares 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 Regional Banks industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, First Mid Illinois Bancshares may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Regional Banks sector.
Weighted SWOT Analysis of First Mid Illinois Bancshares Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at First Mid Illinois Bancshares 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 Mid Illinois Bancshares 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 Mid Illinois Bancshares 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 Mid Illinois Bancshares 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 Mid Illinois Bancshares needs to make to build a sustainable competitive advantage.