Fifth Street Asset (FSAM) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Fifth Street Asset (United States)

Based on various researches at Oak Spring University , Fifth Street Asset is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, geopolitical disruptions, etc

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Introduction to SWOT Analysis of Fifth Street Asset

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fifth Street Asset can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fifth Street Asset, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fifth Street Asset 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Fifth Street Asset can be done for the following purposes –
1. Strategic planning of Fifth Street Asset
2. Improving business portfolio management of Fifth Street Asset
3. Assessing feasibility of the new initiative in United States
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fifth Street Asset

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Strengths of Fifth Street Asset | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Fifth Street Asset are -

Training and development

– Fifth Street Asset 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 Fifth Street Asset in the Financial sector have low bargaining power. Fifth Street Asset has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fifth Street Asset to manage not only supply disruptions but also source products at highly competitive prices.

Highly skilled collaborators

– Fifth Street Asset has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Investment Services industry. Secondly the value chain collaborators of Fifth Street Asset have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Fifth Street Asset is present in almost all the verticals within the Investment Services industry. This has provided Fifth Street Asset 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.

Digital Transformation in Investment Services industry

- digital transformation varies from industry to industry. For Fifth Street Asset digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fifth Street Asset 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 switching costs

– The high switching costs that Fifth Street Asset 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.

Analytics focus

– Fifth Street Asset 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 Investment Services 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.

Ability to lead change in Investment Services

– Fifth Street Asset is one of the leading players in the Investment Services industry in United States. Over the years it has not only transformed the business landscape in the Investment Services industry in United States but also across the existing markets. The ability to lead change has enabled Fifth Street Asset in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Sustainable margins compare to other players in Investment Services industry

– Fifth Street Asset has clearly differentiated products in the market place. This has enabled Fifth Street Asset to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped Fifth Street Asset to invest into research and development (R&D) and innovation.

High brand equity

– Fifth Street Asset has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fifth Street Asset to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Successful track record of launching new products

– Fifth Street Asset has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fifth Street Asset 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.

Ability to recruit top talent

– Fifth Street Asset is one of the leading players in the Investment 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.

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Weaknesses of Fifth Street Asset | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Fifth Street Asset are -

High dependence on Fifth Street Asset ‘s star products

– The top 2 products and services of Fifth Street Asset still accounts for major business revenue. This dependence on star products in Investment Services industry has resulted into insufficient focus on developing new products, even though Fifth Street Asset has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, Fifth Street Asset has high operating costs in the Investment Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fifth Street Asset lucrative customers.

Low market penetration in new markets

– Outside its home market of United States, Fifth Street Asset needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High bargaining power of channel partners in Investment Services industry

– because of the regulatory requirements in United States, Fifth Street Asset is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Investment Services industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fifth Street Asset is slow explore the new channels of communication. These new channels of communication can help Fifth Street Asset to provide better information regarding Investment Services products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Fifth Street Asset strategy

– From the outside it seems that the employees of Fifth Street Asset 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 Fifth Street Asset is one of the leading players in the Investment Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Investment Services industry in last five years.

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 Fifth Street Asset supply chain. Even after few cautionary changes, Fifth Street Asset is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fifth Street Asset vulnerable to further global disruptions in South East Asia.

Products dominated business model

– Even though Fifth Street Asset has some of the most successful models in the Investment Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Fifth Street Asset should strive to include more intangible value offerings along with its core products and services.

Ability to respond to the competition

– As the decision making is very deliberative at Fifth Street Asset, in the dynamic environment of Investment Services industry it has struggled to respond to the nimble upstart competition. Fifth Street Asset 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 Fifth Street Asset needs to have more collaboration between its sales team and marketing team. Sales professionals in the Investment Services industry have deep experience in developing customer relationships. Marketing department at Fifth Street Asset can leverage the sales team experience to cultivate customer relationships as Fifth Street Asset is planning to shift buying processes online.

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Fifth Street Asset Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Fifth Street Asset are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Investment Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fifth Street Asset 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. Fifth Street Asset 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Fifth Street Asset is facing challenges because of the dominance of functional experts in the organization. Fifth Street Asset can utilize new technology in the field of Investment Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Use of Bitcoin and other crypto currencies for transactions in Investment Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fifth Street Asset in the Investment Services industry. Now Fifth Street Asset can target international markets with far fewer capital restrictions requirements than the existing system.

Learning at scale

– Online learning technologies has now opened space for Fifth Street Asset 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.

Using analytics as competitive advantage

– Fifth Street Asset has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Investment Services sector. This continuous investment in analytics has enabled Fifth Street Asset to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fifth Street Asset to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Fifth Street Asset in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Investment Services industry, and it will provide faster access to the consumers.

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. Fifth Street Asset can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Low interest rates

– Even though inflation is raising its head in most developed economies, Fifth Street Asset 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.

Developing new processes and practices

– Fifth Street Asset can develop new processes and procedures in Investment 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fifth Street Asset 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 Fifth Street Asset to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Fifth Street Asset can improve the customer journey of consumers in the Investment 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.

Building a culture of innovation

– managers at Fifth Street Asset 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 Investment Services industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Fifth Street Asset can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats Fifth Street Asset External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Fifth Street Asset are -

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 Fifth Street Asset in the Investment Services sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Fifth Street Asset in Investment Services industry. The Investment Services 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.

High dependence on third party suppliers

– Fifth Street Asset 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.

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 Fifth Street Asset business can come under increasing regulations regarding data privacy, data security, etc.

Easy access to finance

– Easy access to finance in Investment Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fifth Street Asset can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Fifth Street Asset may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Investment Services sector.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Increasing wage structure of Fifth Street Asset

– 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 Fifth Street Asset.

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. Fifth Street Asset needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Fifth Street Asset 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 Fifth Street Asset prominent markets.

Environmental challenges

– Fifth Street Asset 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. Fifth Street Asset can take advantage of this fund but it will also bring new competitors in the Investment Services industry.

Technology acceleration in Forth Industrial Revolution

– Fifth Street Asset has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, Fifth Street Asset needs to keep up with the evolution of technology in the Investment 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.

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 Fifth Street Asset.

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Weighted SWOT Analysis of Fifth Street Asset Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fifth Street Asset 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 Fifth Street Asset 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 Fifth Street Asset 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 Fifth Street Asset 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 Fifth Street Asset needs to make to build a sustainable competitive advantage.

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