SWOT Analysis / TOWS Matrix for Goosehead Insurance (United States)
Based on various researches at Oak Spring University , Goosehead Insurance is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, technology disruption, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
there is backlash against globalization, geopolitical disruptions, etc
Introduction to SWOT Analysis of Goosehead Insurance
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Goosehead Insurance can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Goosehead Insurance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goosehead Insurance 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 Goosehead Insurance can be done for the following purposes –
1. Strategic planning of Goosehead Insurance
2. Improving business portfolio management of Goosehead Insurance
3. Assessing feasibility of the new initiative in United States
4. Making a Insurance (Miscellaneous) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Goosehead Insurance
Strengths of Goosehead Insurance | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Goosehead Insurance are -
Ability to lead change in Insurance (Miscellaneous)
– Goosehead Insurance is one of the leading players in the Insurance (Miscellaneous) industry in United States. Over the years it has not only transformed the business landscape in the Insurance (Miscellaneous) industry in United States but also across the existing markets. The ability to lead change has enabled Goosehead Insurance in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Insurance (Miscellaneous) industry
– Goosehead Insurance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Goosehead Insurance in the Financial sector have low bargaining power. Goosehead Insurance has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Goosehead Insurance to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Goosehead Insurance 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.
Diverse revenue streams
– Goosehead Insurance is present in almost all the verticals within the Insurance (Miscellaneous) industry. This has provided Goosehead Insurance 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.
Ability to recruit top talent
– Goosehead Insurance is one of the leading players in the Insurance (Miscellaneous) 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.
Operational resilience
– The operational resilience strategy of Goosehead Insurance comprises – understanding the underlying the factors in the Insurance (Miscellaneous) 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.
Superior customer experience
– The customer experience strategy of Goosehead Insurance in Insurance (Miscellaneous) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Goosehead Insurance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Goosehead Insurance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Goosehead Insurance is one of the most innovative firm in Insurance (Miscellaneous) sector.
High switching costs
– The high switching costs that Goosehead Insurance 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.
Successful track record of launching new products
– Goosehead Insurance has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Goosehead Insurance 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 Goosehead Insurance | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Goosehead Insurance are -
Lack of clear differentiation of Goosehead Insurance products
– To increase the profitability and margins on the products, Goosehead Insurance needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Insurance (Miscellaneous) industry
– The stress on hiring functional specialists at Goosehead Insurance has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on Goosehead Insurance ‘s star products
– The top 2 products and services of Goosehead Insurance still accounts for major business revenue. This dependence on star products in Insurance (Miscellaneous) industry has resulted into insufficient focus on developing new products, even though Goosehead Insurance has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Insurance (Miscellaneous) industry, Goosehead Insurance 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.
Capital Spending Reduction
– Even during the low interest decade, Goosehead Insurance 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 Insurance (Miscellaneous) industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Goosehead Insurance is slow explore the new channels of communication. These new channels of communication can help Goosehead Insurance to provide better information regarding Insurance (Miscellaneous) products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of United States, Goosehead Insurance needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Goosehead Insurance has a high cash cycle compare to other players in the Insurance (Miscellaneous) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Goosehead Insurance 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 Goosehead Insurance, it seems that company is thinking out the frontier risks that can impact Insurance (Miscellaneous) 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.
Products dominated business model
– Even though Goosehead Insurance has some of the most successful models in the Insurance (Miscellaneous) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Goosehead Insurance should strive to include more intangible value offerings along with its core products and services.
Goosehead Insurance Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Goosehead Insurance are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Goosehead Insurance can use these opportunities to build new business models that can help the communities that Goosehead Insurance operates in. Secondly it can use opportunities from government spending in Insurance (Miscellaneous) sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Goosehead Insurance in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Insurance (Miscellaneous) industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Goosehead Insurance 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.
Leveraging digital technologies
– Goosehead Insurance 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.
Better consumer reach
– The expansion of the 5G network will help Goosehead Insurance to increase its market reach. Goosehead Insurance 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.
Learning at scale
– Online learning technologies has now opened space for Goosehead Insurance 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Goosehead Insurance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Goosehead Insurance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Insurance (Miscellaneous) industry, but it has also influenced the consumer preferences. Goosehead Insurance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Goosehead Insurance can improve the customer journey of consumers in the Insurance (Miscellaneous) 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Insurance (Miscellaneous) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Goosehead Insurance 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. Goosehead Insurance 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, Goosehead Insurance is facing challenges because of the dominance of functional experts in the organization. Goosehead Insurance can utilize new technology in the field of Insurance (Miscellaneous) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Goosehead Insurance 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.
Threats Goosehead Insurance External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Goosehead Insurance are -
Environmental challenges
– Goosehead Insurance 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. Goosehead Insurance can take advantage of this fund but it will also bring new competitors in the Insurance (Miscellaneous) industry.
Consumer confidence and its impact on Goosehead Insurance 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 Insurance (Miscellaneous) industry and other sectors.
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 Goosehead Insurance in the Insurance (Miscellaneous) sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Goosehead Insurance 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 Insurance (Miscellaneous) industry.
High dependence on third party suppliers
– Goosehead Insurance 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Goosehead Insurance in Insurance (Miscellaneous) industry. The Insurance (Miscellaneous) 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.
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.
Regulatory challenges
– Goosehead Insurance 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 Insurance (Miscellaneous) industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Goosehead Insurance 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 Goosehead Insurance prominent markets.
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 Goosehead Insurance business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Goosehead Insurance is facing in Insurance (Miscellaneous) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Goosehead Insurance has witnessed rapid integration of technology during Covid-19 in the Insurance (Miscellaneous) industry. As one of the leading players in the industry, Goosehead Insurance needs to keep up with the evolution of technology in the Insurance (Miscellaneous) 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Miscellaneous) industry are lowering. It can presents Goosehead Insurance with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Miscellaneous) sector.
Weighted SWOT Analysis of Goosehead Insurance Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Goosehead Insurance 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 Goosehead Insurance 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 Goosehead Insurance 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 Goosehead Insurance 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 Goosehead Insurance needs to make to build a sustainable competitive advantage.
