Kentucky First Federal (KFFB) SWOT Analysis / TOWS Matrix / MBA Resources
Regional Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Kentucky First Federal (United States)
Based on various researches at Oak Spring University , Kentucky First Federal is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions,
wage bills are increasing, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Kentucky First Federal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kentucky First Federal can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kentucky First Federal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kentucky First Federal 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 Kentucky First Federal can be done for the following purposes –
1. Strategic planning of Kentucky First Federal
2. Improving business portfolio management of Kentucky First Federal
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 Kentucky First Federal
Strengths of Kentucky First Federal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kentucky First Federal are -
Cross disciplinary teams
– Horizontal connected teams at the Kentucky First Federal 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.
Innovation driven organization
– Kentucky First Federal is one of the most innovative firm in Regional Banks sector.
Operational resilience
– The operational resilience strategy of Kentucky First Federal 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.
High switching costs
– The high switching costs that Kentucky First Federal 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.
Superior customer experience
– The customer experience strategy of Kentucky First Federal in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Kentucky First Federal in the Financial sector have low bargaining power. Kentucky First Federal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kentucky First Federal to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Regional Banks industry
- digital transformation varies from industry to industry. For Kentucky First Federal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kentucky First Federal 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 Regional Banks industry
– Kentucky First Federal has clearly differentiated products in the market place. This has enabled Kentucky First Federal to fetch slight price premium compare to the competitors in the Regional Banks industry. The sustainable margins have also helped Kentucky First Federal to invest into research and development (R&D) and innovation.
Learning organization
- Kentucky First Federal 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 Kentucky First Federal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kentucky First Federal emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Kentucky First Federal has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kentucky First Federal staying ahead in the Regional Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Kentucky First Federal is present in almost all the verticals within the Regional Banks industry. This has provided Kentucky First Federal 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.
Successful track record of launching new products
– Kentucky First Federal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kentucky First Federal 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 Kentucky First Federal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kentucky First Federal are -
Ability to respond to the competition
– As the decision making is very deliberative at Kentucky First Federal, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. Kentucky First Federal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Kentucky First Federal ‘s star products
– The top 2 products and services of Kentucky First Federal still accounts for major business revenue. This dependence on star products in Regional Banks industry has resulted into insufficient focus on developing new products, even though Kentucky First Federal has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of United States, Kentucky First Federal needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Kentucky First Federal strategy
– From the outside it seems that the employees of Kentucky First Federal 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kentucky First Federal is slow explore the new channels of communication. These new channels of communication can help Kentucky First Federal to provide better information regarding Regional Banks products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Kentucky First Federal is one of the leading players in the Regional Banks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Regional Banks industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Regional Banks industry, Kentucky First Federal 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, Kentucky First Federal 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 Regional Banks industry using digital technology.
High bargaining power of channel partners in Regional Banks industry
– because of the regulatory requirements in United States, Kentucky First Federal 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 Regional Banks industry.
Interest costs
– Compare to the competition, Kentucky First Federal 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.
No frontier risks strategy
– From the 10K / annual statement of Kentucky First Federal, 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.
Kentucky First Federal Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kentucky First Federal are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kentucky First Federal 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 Kentucky First Federal has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Kentucky First Federal to build a more holistic ecosystem for Kentucky First Federal products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Kentucky First Federal 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.
Better consumer reach
– The expansion of the 5G network will help Kentucky First Federal to increase its market reach. Kentucky First Federal 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.
Leveraging digital technologies
– Kentucky First Federal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kentucky First Federal 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 Kentucky First Federal to hire the very best people irrespective of their geographical location.
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. Kentucky First Federal can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kentucky First Federal is facing challenges because of the dominance of functional experts in the organization. Kentucky First Federal can utilize new technology in the field of Regional Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kentucky First Federal 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 Kentucky First Federal to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kentucky First Federal 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.
Building a culture of innovation
– managers at Kentucky First Federal 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.
Manufacturing automation
– Kentucky First Federal 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kentucky First Federal can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Kentucky First Federal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kentucky First Federal 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 Kentucky First Federal in the Regional Banks sector and impact the bottomline of the organization.
Consumer confidence and its impact on Kentucky First Federal 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 Regional Banks industry and other sectors.
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. Kentucky First Federal 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. Kentucky First Federal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Kentucky First Federal 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.
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 Kentucky First Federal business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kentucky First Federal in Regional Banks industry. The Regional Banks 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.
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.
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. Kentucky First Federal needs to understand the core reasons impacting the Regional Banks industry. This will help it in building a better workplace.
Increasing wage structure of Kentucky First Federal
– 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 Kentucky First Federal.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kentucky First Federal 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.
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 Kentucky First Federal.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents Kentucky First Federal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
Weighted SWOT Analysis of Kentucky First Federal Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kentucky First Federal 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 Kentucky First Federal 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 Kentucky First Federal 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 Kentucky First Federal 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 Kentucky First Federal needs to make to build a sustainable competitive advantage.