MS&AD Insurance Group Holdings PK (MSADY) SWOT Analysis / TOWS Matrix / MBA Resources
Insurance (Prop. & Casualty)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for MS&AD Insurance Group Holdings PK (United States)
Based on various researches at Oak Spring University , MS&AD Insurance Group Holdings PK is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, geopolitical disruptions, technology disruption, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of MS&AD Insurance Group Holdings PK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MS&AD Insurance Group Holdings PK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MS&AD Insurance Group Holdings PK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK can be done for the following purposes –
1. Strategic planning of MS&AD Insurance Group Holdings PK
2. Improving business portfolio management of MS&AD Insurance Group Holdings PK
3. Assessing feasibility of the new initiative in United States
4. Making a Insurance (Prop. & Casualty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MS&AD Insurance Group Holdings PK
Strengths of MS&AD Insurance Group Holdings PK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MS&AD Insurance Group Holdings PK are -
Organizational Resilience of MS&AD Insurance Group Holdings PK
– The covid-19 pandemic has put organizational resilience at the centre of everthing MS&AD Insurance Group Holdings PK does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Insurance (Prop. & Casualty) industry
- digital transformation varies from industry to industry. For MS&AD Insurance Group Holdings PK digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. MS&AD Insurance Group Holdings PK 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.
Cross disciplinary teams
– Horizontal connected teams at the MS&AD Insurance Group Holdings PK 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.
Superior customer experience
– The customer experience strategy of MS&AD Insurance Group Holdings PK in Insurance (Prop. & Casualty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that MS&AD Insurance Group Holdings PK has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy of MS&AD Insurance Group Holdings PK comprises – understanding the underlying the factors in the Insurance (Prop. & Casualty) 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.
Training and development
– MS&AD Insurance Group Holdings PK 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.
Ability to lead change in Insurance (Prop. & Casualty)
– MS&AD Insurance Group Holdings PK is one of the leading players in the Insurance (Prop. & Casualty) industry in United States. Over the years it has not only transformed the business landscape in the Insurance (Prop. & Casualty) industry in United States but also across the existing markets. The ability to lead change has enabled MS&AD Insurance Group Holdings PK 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 Insurance (Prop. & Casualty) industry
– MS&AD Insurance Group Holdings PK has clearly differentiated products in the market place. This has enabled MS&AD Insurance Group Holdings PK to fetch slight price premium compare to the competitors in the Insurance (Prop. & Casualty) industry. The sustainable margins have also helped MS&AD Insurance Group Holdings PK to invest into research and development (R&D) and innovation.
Strong track record of project management in the Insurance (Prop. & Casualty) industry
– MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK in the Financial sector have low bargaining power. MS&AD Insurance Group Holdings PK has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps MS&AD Insurance Group Holdings PK to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– MS&AD Insurance Group Holdings PK 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 Insurance (Prop. & Casualty) 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.
Weaknesses of MS&AD Insurance Group Holdings PK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MS&AD Insurance Group Holdings PK are -
High operating costs
– Compare to the competitors, MS&AD Insurance Group Holdings PK has high operating costs in the Insurance (Prop. & Casualty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract MS&AD Insurance Group Holdings PK lucrative customers.
Need for greater diversity
– MS&AD Insurance Group Holdings PK 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.
Ability to respond to the competition
– As the decision making is very deliberative at MS&AD Insurance Group Holdings PK, in the dynamic environment of Insurance (Prop. & Casualty) industry it has struggled to respond to the nimble upstart competition. MS&AD Insurance Group Holdings PK has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of MS&AD Insurance Group Holdings PK, it seems that company is thinking out the frontier risks that can impact Insurance (Prop. & Casualty) 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MS&AD Insurance Group Holdings PK is slow explore the new channels of communication. These new channels of communication can help MS&AD Insurance Group Holdings PK to provide better information regarding Insurance (Prop. & Casualty) products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Insurance (Prop. & Casualty) industry, MS&AD Insurance Group Holdings PK 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.
Low market penetration in new markets
– Outside its home market of United States, MS&AD Insurance Group Holdings PK needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though MS&AD Insurance Group Holdings PK has some of the most successful models in the Insurance (Prop. & Casualty) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. MS&AD Insurance Group Holdings PK should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, MS&AD Insurance Group Holdings PK has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Insurance (Prop. & Casualty) industry over the last five years. MS&AD Insurance Group Holdings PK even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, MS&AD Insurance Group Holdings PK 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 (Prop. & Casualty) industry using digital technology.
Slow to strategic competitive environment developments
– As MS&AD Insurance Group Holdings PK is one of the leading players in the Insurance (Prop. & Casualty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Insurance (Prop. & Casualty) industry in last five years.
MS&AD Insurance Group Holdings PK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MS&AD Insurance Group Holdings PK are -
Loyalty marketing
– MS&AD Insurance Group Holdings PK 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Insurance (Prop. & Casualty) industry, but it has also influenced the consumer preferences. MS&AD Insurance Group Holdings PK 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
– MS&AD Insurance Group Holdings PK can improve the customer journey of consumers in the Insurance (Prop. & Casualty) 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.
Creating value in data economy
– The success of analytics program of MS&AD Insurance Group Holdings PK has opened avenues for new revenue streams for the organization in Insurance (Prop. & Casualty) industry. This can help MS&AD Insurance Group Holdings PK to build a more holistic ecosystem for MS&AD Insurance Group Holdings PK products in the Insurance (Prop. & Casualty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, MS&AD Insurance Group Holdings PK can use these opportunities to build new business models that can help the communities that MS&AD Insurance Group Holdings PK operates in. Secondly it can use opportunities from government spending in Insurance (Prop. & Casualty) sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Insurance (Prop. & Casualty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. MS&AD Insurance Group Holdings PK 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. MS&AD Insurance Group Holdings PK 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, MS&AD Insurance Group Holdings PK 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.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Prop. & Casualty) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for MS&AD Insurance Group Holdings PK in the Insurance (Prop. & Casualty) industry. Now MS&AD Insurance Group Holdings PK can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– MS&AD Insurance Group Holdings PK can develop new processes and procedures in Insurance (Prop. & Casualty) 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 MS&AD Insurance Group Holdings PK to increase its market reach. MS&AD Insurance Group Holdings PK 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.
Using analytics as competitive advantage
– MS&AD Insurance Group Holdings PK has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Insurance (Prop. & Casualty) sector. This continuous investment in analytics has enabled MS&AD Insurance Group Holdings PK to build a competitive advantage using analytics. The analytics driven competitive advantage can help MS&AD Insurance Group Holdings PK to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– MS&AD Insurance Group Holdings PK can use the latest technology developments to improve its manufacturing and designing process in Insurance (Prop. & Casualty) 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 MS&AD Insurance Group Holdings PK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MS&AD Insurance Group Holdings PK are -
Stagnating economy with rate increase
– MS&AD Insurance Group Holdings PK 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 (Prop. & Casualty) industry.
Consumer confidence and its impact on MS&AD Insurance Group Holdings PK 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 (Prop. & Casualty) industry and other sectors.
Shortening product life cycle
– it is one of the major threat that MS&AD Insurance Group Holdings PK is facing in Insurance (Prop. & Casualty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of MS&AD Insurance Group Holdings PK.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for MS&AD Insurance Group Holdings PK in Insurance (Prop. & Casualty) industry. The Insurance (Prop. & Casualty) 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, MS&AD Insurance Group Holdings PK may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Insurance (Prop. & Casualty) sector.
High dependence on third party suppliers
– MS&AD Insurance Group Holdings PK 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK prominent markets.
Increasing wage structure of MS&AD Insurance Group Holdings PK
– 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 MS&AD Insurance Group Holdings PK.
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. MS&AD Insurance Group Holdings PK 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.
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 MS&AD Insurance Group Holdings PK in the Insurance (Prop. & Casualty) sector and impact the bottomline of the organization.
Environmental challenges
– MS&AD Insurance Group Holdings PK 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. MS&AD Insurance Group Holdings PK can take advantage of this fund but it will also bring new competitors in the Insurance (Prop. & Casualty) industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Prop. & Casualty) industry are lowering. It can presents MS&AD Insurance Group Holdings PK with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Prop. & Casualty) sector.
Weighted SWOT Analysis of MS&AD Insurance Group Holdings PK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK 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 MS&AD Insurance Group Holdings PK needs to make to build a sustainable competitive advantage.