SWOT Analysis / TOWS Matrix for Northwest Bancshares (United States)
Based on various researches at Oak Spring University , Northwest Bancshares is operating in a macro-environment that has been destablized by – increasing commodity prices, there is increasing trade war between United States & China, increasing energy prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, wage bills are increasing,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Northwest Bancshares
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Northwest Bancshares can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Northwest Bancshares, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Northwest Bancshares 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 Northwest Bancshares can be done for the following purposes –
1. Strategic planning of Northwest Bancshares
2. Improving business portfolio management of Northwest Bancshares
3. Assessing feasibility of the new initiative in United States
4. Making a S&Ls/Savings Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Northwest Bancshares
Strengths of Northwest Bancshares | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Northwest Bancshares are -
Digital Transformation in S&Ls/Savings Banks industry
- digital transformation varies from industry to industry. For Northwest Bancshares digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Northwest Bancshares 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.
Strong track record of project management in the S&Ls/Savings Banks industry
– Northwest Bancshares is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Northwest Bancshares has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Northwest Bancshares 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.
Training and development
– Northwest Bancshares 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 S&Ls/Savings Banks
– Northwest Bancshares is one of the leading players in the S&Ls/Savings Banks industry in United States. Over the years it has not only transformed the business landscape in the S&Ls/Savings Banks industry in United States but also across the existing markets. The ability to lead change has enabled Northwest Bancshares 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 S&Ls/Savings Banks industry
– Northwest Bancshares has clearly differentiated products in the market place. This has enabled Northwest Bancshares to fetch slight price premium compare to the competitors in the S&Ls/Savings Banks industry. The sustainable margins have also helped Northwest Bancshares to invest into research and development (R&D) and innovation.
Innovation driven organization
– Northwest Bancshares is one of the most innovative firm in S&Ls/Savings Banks sector.
Organizational Resilience of Northwest Bancshares
– The covid-19 pandemic has put organizational resilience at the centre of everthing Northwest Bancshares does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Northwest Bancshares 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 S&Ls/Savings Banks 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.
Diverse revenue streams
– Northwest Bancshares is present in almost all the verticals within the S&Ls/Savings Banks industry. This has provided Northwest Bancshares 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.
Superior customer experience
– The customer experience strategy of Northwest Bancshares in S&Ls/Savings Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Northwest Bancshares is one of the leading players in the S&Ls/Savings Banks 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.
Weaknesses of Northwest Bancshares | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Northwest Bancshares are -
Compensation and incentives
– The revenue per employee of Northwest Bancshares is just above the S&Ls/Savings Banks industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Lack of clear differentiation of Northwest Bancshares products
– To increase the profitability and margins on the products, Northwest Bancshares needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Northwest Bancshares, it seems that company is thinking out the frontier risks that can impact S&Ls/Savings 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.
Interest costs
– Compare to the competition, Northwest Bancshares 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.
Skills based hiring in S&Ls/Savings Banks industry
– The stress on hiring functional specialists at Northwest Bancshares 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Northwest Bancshares is slow explore the new channels of communication. These new channels of communication can help Northwest Bancshares to provide better information regarding S&Ls/Savings Banks products and services. It can also build an online community to further reach out to potential customers.
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 Northwest Bancshares supply chain. Even after few cautionary changes, Northwest Bancshares is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Northwest Bancshares vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Northwest Bancshares needs to have more collaboration between its sales team and marketing team. Sales professionals in the S&Ls/Savings Banks industry have deep experience in developing customer relationships. Marketing department at Northwest Bancshares can leverage the sales team experience to cultivate customer relationships as Northwest Bancshares is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Northwest Bancshares 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 S&Ls/Savings Banks industry using digital technology.
High cash cycle compare to competitors
Northwest Bancshares has a high cash cycle compare to other players in the S&Ls/Savings Banks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Northwest Bancshares strategy
– From the outside it seems that the employees of Northwest Bancshares 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.
Northwest Bancshares Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Northwest Bancshares are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Northwest Bancshares is facing challenges because of the dominance of functional experts in the organization. Northwest Bancshares can utilize new technology in the field of S&Ls/Savings Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Northwest Bancshares has opened avenues for new revenue streams for the organization in S&Ls/Savings Banks industry. This can help Northwest Bancshares to build a more holistic ecosystem for Northwest Bancshares products in the S&Ls/Savings Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Northwest Bancshares has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in S&Ls/Savings Banks sector. This continuous investment in analytics has enabled Northwest Bancshares to build a competitive advantage using analytics. The analytics driven competitive advantage can help Northwest Bancshares to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Northwest Bancshares 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 Northwest Bancshares to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in S&Ls/Savings Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Northwest Bancshares in the S&Ls/Savings Banks industry. Now Northwest Bancshares can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Northwest Bancshares 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 Northwest Bancshares in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the S&Ls/Savings Banks industry, and it will provide faster access to the consumers.
Buying journey improvements
– Northwest Bancshares can improve the customer journey of consumers in the S&Ls/Savings Banks 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Northwest Bancshares 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 Northwest Bancshares to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Northwest Bancshares 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Northwest Bancshares 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.
Better consumer reach
– The expansion of the 5G network will help Northwest Bancshares to increase its market reach. Northwest Bancshares 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Northwest Bancshares can use these opportunities to build new business models that can help the communities that Northwest Bancshares operates in. Secondly it can use opportunities from government spending in S&Ls/Savings Banks sector.
Threats Northwest Bancshares External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Northwest Bancshares are -
Stagnating economy with rate increase
– Northwest Bancshares 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 S&Ls/Savings Banks 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 Northwest Bancshares in the S&Ls/Savings Banks sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Northwest Bancshares 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.
Shortening product life cycle
– it is one of the major threat that Northwest Bancshares is facing in S&Ls/Savings Banks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 wage structure of Northwest Bancshares
– 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 Northwest Bancshares.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to S&Ls/Savings Banks industry are lowering. It can presents Northwest Bancshares with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the S&Ls/Savings Banks sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Northwest Bancshares 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 Northwest Bancshares prominent markets.
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.
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. Northwest Bancshares 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.
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 Northwest Bancshares.
Consumer confidence and its impact on Northwest Bancshares 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 S&Ls/Savings Banks industry and other sectors.
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 Northwest Bancshares business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Northwest Bancshares Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Northwest Bancshares 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 Northwest Bancshares 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 Northwest Bancshares 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 Northwest Bancshares 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 Northwest Bancshares needs to make to build a sustainable competitive advantage.