Nuveen Dividend Advantage Municipal (NAD) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Nuveen Dividend Advantage Municipal (United States)

Based on various researches at Oak Spring University , Nuveen Dividend Advantage Municipal is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of Nuveen Dividend Advantage Municipal

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nuveen Dividend Advantage Municipal can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nuveen Dividend Advantage Municipal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal can be done for the following purposes –
1. Strategic planning of Nuveen Dividend Advantage Municipal
2. Improving business portfolio management of Nuveen Dividend Advantage Municipal
3. Assessing feasibility of the new initiative in United States
4. Making a Misc. Financial Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nuveen Dividend Advantage Municipal

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Strengths of Nuveen Dividend Advantage Municipal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Nuveen Dividend Advantage Municipal are -

Sustainable margins compare to other players in Misc. Financial Services industry

– Nuveen Dividend Advantage Municipal has clearly differentiated products in the market place. This has enabled Nuveen Dividend Advantage Municipal to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Nuveen Dividend Advantage Municipal to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Nuveen Dividend Advantage Municipal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nuveen Dividend Advantage Municipal 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.

Operational resilience

– The operational resilience strategy of Nuveen Dividend Advantage Municipal comprises – understanding the underlying the factors in the Misc. Financial Services 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 brand equity

– Nuveen Dividend Advantage Municipal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nuveen Dividend Advantage Municipal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– Nuveen Dividend Advantage Municipal is one of the most innovative firm in Misc. Financial Services sector.

Analytics focus

– Nuveen Dividend Advantage Municipal 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 Misc. Financial 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 recruit top talent

– Nuveen Dividend Advantage Municipal is one of the leading players in the Misc. Financial 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.

Digital Transformation in Misc. Financial Services industry

- digital transformation varies from industry to industry. For Nuveen Dividend Advantage Municipal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nuveen Dividend Advantage Municipal 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.

Effective Research and Development (R&D)

– Nuveen Dividend Advantage Municipal has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nuveen Dividend Advantage Municipal staying ahead in the Misc. Financial Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that Nuveen Dividend Advantage Municipal 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.

Highly skilled collaborators

– Nuveen Dividend Advantage Municipal has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Financial Services industry. Secondly the value chain collaborators of Nuveen Dividend Advantage Municipal have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Nuveen Dividend Advantage Municipal in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses of Nuveen Dividend Advantage Municipal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Nuveen Dividend Advantage Municipal are -

Low market penetration in new markets

– Outside its home market of United States, Nuveen Dividend Advantage Municipal needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Increasing silos among functional specialists

– The organizational structure of Nuveen Dividend Advantage Municipal is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Nuveen Dividend Advantage Municipal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nuveen Dividend Advantage Municipal to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.

No frontier risks strategy

– From the 10K / annual statement of Nuveen Dividend Advantage Municipal, it seems that company is thinking out the frontier risks that can impact Misc. Financial Services industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nuveen Dividend Advantage Municipal supply chain. Even after few cautionary changes, Nuveen Dividend Advantage Municipal is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nuveen Dividend Advantage Municipal vulnerable to further global disruptions in South East Asia.

Slow to strategic competitive environment developments

– As Nuveen Dividend Advantage Municipal is one of the leading players in the Misc. Financial Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Financial Services industry in last five years.

Skills based hiring in Misc. Financial Services industry

– The stress on hiring functional specialists at Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal ‘s star products

– The top 2 products and services of Nuveen Dividend Advantage Municipal still accounts for major business revenue. This dependence on star products in Misc. Financial Services industry has resulted into insufficient focus on developing new products, even though Nuveen Dividend Advantage Municipal has relatively successful track record of launching new products.

High bargaining power of channel partners in Misc. Financial Services industry

– because of the regulatory requirements in United States, Nuveen Dividend Advantage Municipal 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 Misc. Financial Services industry.

Products dominated business model

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

Employees’ less understanding of Nuveen Dividend Advantage Municipal strategy

– From the outside it seems that the employees of Nuveen Dividend Advantage Municipal 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.

Capital Spending Reduction

– Even during the low interest decade, Nuveen Dividend Advantage Municipal 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 Misc. Financial Services industry using digital technology.

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Nuveen Dividend Advantage Municipal Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Nuveen Dividend Advantage Municipal are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nuveen Dividend Advantage Municipal 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. Nuveen Dividend Advantage Municipal 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.

Building a culture of innovation

– managers at Nuveen Dividend Advantage Municipal 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 Misc. Financial Services industry.

Developing new processes and practices

– Nuveen Dividend Advantage Municipal can develop new processes and procedures in Misc. Financial 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Use of Bitcoin and other crypto currencies for transactions in Misc. Financial Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nuveen Dividend Advantage Municipal in the Misc. Financial Services industry. Now Nuveen Dividend Advantage Municipal can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal to hire the very best people irrespective of their geographical location.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nuveen Dividend Advantage Municipal can use these opportunities to build new business models that can help the communities that Nuveen Dividend Advantage Municipal operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.

Reforming the budgeting process

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for Nuveen Dividend Advantage Municipal in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Financial Services industry, and it will provide faster access to the consumers.

Loyalty marketing

– Nuveen Dividend Advantage Municipal 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.

Manufacturing automation

– Nuveen Dividend Advantage Municipal can use the latest technology developments to improve its manufacturing and designing process in Misc. Financial Services 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.

Better consumer reach

– The expansion of the 5G network will help Nuveen Dividend Advantage Municipal to increase its market reach. Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal 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.

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Threats Nuveen Dividend Advantage Municipal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal in the Misc. Financial Services sector and impact the bottomline of the organization.

Regulatory challenges

– Nuveen Dividend Advantage Municipal 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 Misc. Financial Services industry regulations.

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.

Environmental challenges

– Nuveen Dividend Advantage Municipal 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. Nuveen Dividend Advantage Municipal can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.

Shortening product life cycle

– it is one of the major threat that Nuveen Dividend Advantage Municipal is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. Nuveen Dividend Advantage Municipal needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Nuveen Dividend Advantage Municipal may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Financial Services sector.

Consumer confidence and its impact on Nuveen Dividend Advantage Municipal 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 Misc. Financial Services industry and other sectors.

High dependence on third party suppliers

– Nuveen Dividend Advantage Municipal 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents Nuveen Dividend Advantage Municipal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Financial Services sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Nuveen Dividend Advantage Municipal 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 Nuveen Dividend Advantage Municipal prominent markets.

Technology acceleration in Forth Industrial Revolution

– Nuveen Dividend Advantage Municipal has witnessed rapid integration of technology during Covid-19 in the Misc. Financial Services industry. As one of the leading players in the industry, Nuveen Dividend Advantage Municipal needs to keep up with the evolution of technology in the Misc. Financial 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.

Stagnating economy with rate increase

– Nuveen Dividend Advantage Municipal 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 Misc. Financial Services industry.

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Weighted SWOT Analysis of Nuveen Dividend Advantage Municipal Template, Example

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

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