Annaly Capital Management Pd Pref (NLY_pd) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Financial Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Annaly Capital Management Pd Pref (United States)
Based on various researches at Oak Spring University , Annaly Capital Management Pd Pref is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing transportation and logistics costs, cloud computing is disrupting traditional business models,
wage bills are increasing, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Annaly Capital Management Pd Pref
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Annaly Capital Management Pd Pref can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Annaly Capital Management Pd Pref, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref can be done for the following purposes –
1. Strategic planning of Annaly Capital Management Pd Pref
2. Improving business portfolio management of Annaly Capital Management Pd Pref
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 Annaly Capital Management Pd Pref
Strengths of Annaly Capital Management Pd Pref | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Annaly Capital Management Pd Pref are -
Low bargaining power of suppliers
– Suppliers of Annaly Capital Management Pd Pref in the Financial sector have low bargaining power. Annaly Capital Management Pd Pref has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Annaly Capital Management Pd Pref to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Annaly Capital Management Pd Pref is one of the most innovative firm in Misc. Financial Services sector.
Operational resilience
– The operational resilience strategy of Annaly Capital Management Pd Pref 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.
Diverse revenue streams
– Annaly Capital Management Pd Pref is present in almost all the verticals within the Misc. Financial Services industry. This has provided Annaly Capital Management Pd Pref 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
– Annaly Capital Management Pd Pref 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.
High brand equity
– Annaly Capital Management Pd Pref has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Annaly Capital Management Pd Pref to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Misc. Financial Services
– Annaly Capital Management Pd Pref is one of the leading players in the Misc. Financial Services industry in United States. Over the years it has not only transformed the business landscape in the Misc. Financial Services industry in United States but also across the existing markets. The ability to lead change has enabled Annaly Capital Management Pd Pref in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Misc. Financial Services industry
- digital transformation varies from industry to industry. For Annaly Capital Management Pd Pref digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Annaly Capital Management Pd Pref 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.
Learning organization
- Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Annaly Capital Management Pd Pref emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Misc. Financial Services industry
– Annaly Capital Management Pd Pref is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Misc. Financial Services industry
– Annaly Capital Management Pd Pref has clearly differentiated products in the market place. This has enabled Annaly Capital Management Pd Pref to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Annaly Capital Management Pd Pref to invest into research and development (R&D) and innovation.
Weaknesses of Annaly Capital Management Pd Pref | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Annaly Capital Management Pd Pref are -
Lack of clear differentiation of Annaly Capital Management Pd Pref products
– To increase the profitability and margins on the products, Annaly Capital Management Pd Pref needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Annaly Capital Management Pd Pref 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.
Increasing silos among functional specialists
– The organizational structure of Annaly Capital Management Pd Pref is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Annaly Capital Management Pd Pref needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref, 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.
Slow decision making process
– As mentioned earlier in the report, Annaly Capital Management Pd Pref has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Financial Services industry over the last five years. Annaly Capital Management Pd Pref 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Annaly Capital Management Pd Pref is slow explore the new channels of communication. These new channels of communication can help Annaly Capital Management Pd Pref to provide better information regarding Misc. Financial Services products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Misc. Financial Services industry
– because of the regulatory requirements in United States, Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref 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. Annaly Capital Management Pd Pref should strive to include more intangible value offerings along with its core products and services.
High dependence on Annaly Capital Management Pd Pref ‘s star products
– The top 2 products and services of Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Annaly Capital Management Pd Pref 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, Annaly Capital Management Pd Pref 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.
Annaly Capital Management Pd Pref Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Annaly Capital Management Pd Pref are -
Buying journey improvements
– Annaly Capital Management Pd Pref can improve the customer journey of consumers in the Misc. Financial Services industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Annaly Capital Management Pd Pref has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Financial Services sector. This continuous investment in analytics has enabled Annaly Capital Management Pd Pref to build a competitive advantage using analytics. The analytics driven competitive advantage can help Annaly Capital Management Pd Pref to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Annaly Capital Management Pd Pref in the Misc. Financial Services industry. Now Annaly Capital Management Pd Pref can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Annaly Capital Management Pd Pref can use these opportunities to build new business models that can help the communities that Annaly Capital Management Pd Pref operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.
Developing new processes and practices
– Annaly Capital Management Pd Pref 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Annaly Capital Management Pd Pref 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.
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. Annaly Capital Management Pd Pref 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. Annaly Capital Management Pd Pref 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, Annaly Capital Management Pd Pref is facing challenges because of the dominance of functional experts in the organization. Annaly Capital Management Pd Pref can utilize new technology in the field of Misc. Financial Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Annaly Capital Management Pd Pref 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Annaly Capital Management Pd Pref can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Annaly Capital Management Pd Pref are -
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref prominent markets.
Stagnating economy with rate increase
– Annaly Capital Management Pd Pref 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Annaly Capital Management Pd Pref 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.
Easy access to finance
– Easy access to finance in Misc. Financial Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Annaly Capital Management Pd Pref can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Annaly Capital Management Pd Pref business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Annaly Capital Management Pd Pref
– 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 Annaly Capital Management Pd Pref.
Shortening product life cycle
– it is one of the major threat that Annaly Capital Management Pd Pref is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Annaly Capital Management Pd Pref 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. Annaly Capital Management Pd Pref can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
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 Annaly Capital Management Pd Pref in the Misc. Financial Services sector and impact the bottomline of the organization.
Consumer confidence and its impact on Annaly Capital Management Pd Pref 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.
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 Annaly Capital Management Pd Pref.
Weighted SWOT Analysis of Annaly Capital Management Pd Pref Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref 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 Annaly Capital Management Pd Pref needs to make to build a sustainable competitive advantage.