Based on various researches at Oak Spring University , OFG Bancorp Pd Pref is operating in a macro-environment that has been destablized by – there is backlash against globalization, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, technology disruption, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of OFG Bancorp Pd Pref
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that OFG Bancorp Pd Pref can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the OFG Bancorp Pd Pref, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which OFG Bancorp 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 OFG Bancorp Pd Pref can be done for the following purposes –
1. Strategic planning of OFG Bancorp Pd Pref
2. Improving business portfolio management of OFG Bancorp Pd Pref
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of OFG Bancorp Pd Pref
Strengths of OFG Bancorp Pd Pref | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of OFG Bancorp Pd Pref are -
Sustainable margins compare to other players in industry
– OFG Bancorp Pd Pref has clearly differentiated products in the market place. This has enabled OFG Bancorp Pd Pref to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped OFG Bancorp Pd Pref to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– OFG Bancorp Pd Pref has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – OFG Bancorp Pd Pref staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– OFG Bancorp Pd Pref is one of the leading players in the 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.
Strong track record of project management in the industry
– OFG Bancorp 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.
Low bargaining power of suppliers
– Suppliers of OFG Bancorp Pd Pref in the sector have low bargaining power. OFG Bancorp Pd Pref has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps OFG Bancorp Pd Pref to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that OFG Bancorp Pd Pref 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.
Diverse revenue streams
– OFG Bancorp Pd Pref is present in almost all the verticals within the industry. This has provided OFG Bancorp 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.
Organizational Resilience of OFG Bancorp Pd Pref
– The covid-19 pandemic has put organizational resilience at the centre of everthing OFG Bancorp Pd Pref does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- OFG Bancorp 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 OFG Bancorp Pd Pref is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at OFG Bancorp Pd Pref emphasize – knowledge, initiative, and innovation.
Digital Transformation in industry
- digital transformation varies from industry to industry. For OFG Bancorp Pd Pref digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. OFG Bancorp 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.
High brand equity
– OFG Bancorp Pd Pref has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled OFG Bancorp Pd Pref to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– OFG Bancorp Pd Pref 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 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 OFG Bancorp Pd Pref | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of OFG Bancorp Pd Pref are -
High dependence on OFG Bancorp Pd Pref ‘s star products
– The top 2 products and services of OFG Bancorp Pd Pref still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though OFG Bancorp Pd Pref has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of OFG Bancorp Pd Pref is just above the 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.
Ability to respond to the competition
– As the decision making is very deliberative at OFG Bancorp Pd Pref, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. OFG Bancorp Pd Pref has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though OFG Bancorp Pd Pref has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. OFG Bancorp Pd Pref should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
OFG Bancorp Pd Pref has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, OFG Bancorp 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 industry.
Workers concerns about automation
– As automation is fast increasing in the industry, OFG Bancorp 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, OFG Bancorp Pd Pref is slow explore the new channels of communication. These new channels of communication can help OFG Bancorp Pd Pref to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of OFG Bancorp Pd Pref products
– To increase the profitability and margins on the products, OFG Bancorp Pd Pref needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that OFG Bancorp Pd Pref needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at OFG Bancorp Pd Pref can leverage the sales team experience to cultivate customer relationships as OFG Bancorp Pd Pref is planning to shift buying processes online.
Skills based hiring in industry
– The stress on hiring functional specialists at OFG Bancorp Pd Pref 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.
OFG Bancorp Pd Pref Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of OFG Bancorp Pd Pref are -
Better consumer reach
– The expansion of the 5G network will help OFG Bancorp Pd Pref to increase its market reach. OFG Bancorp Pd Pref 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. OFG Bancorp Pd Pref can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects OFG Bancorp 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.
Learning at scale
– Online learning technologies has now opened space for OFG Bancorp Pd Pref 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, OFG Bancorp Pd Pref is facing challenges because of the dominance of functional experts in the organization. OFG Bancorp Pd Pref can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– OFG Bancorp 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, OFG Bancorp 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for OFG Bancorp Pd Pref in the industry. Now OFG Bancorp Pd Pref can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for OFG Bancorp Pd Pref in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– OFG Bancorp Pd Pref can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at OFG Bancorp 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 industry.
Developing new processes and practices
– OFG Bancorp Pd Pref can develop new processes and procedures in 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.
Creating value in data economy
– The success of analytics program of OFG Bancorp Pd Pref has opened avenues for new revenue streams for the organization in industry. This can help OFG Bancorp Pd Pref to build a more holistic ecosystem for OFG Bancorp Pd Pref products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats OFG Bancorp Pd Pref External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of OFG Bancorp Pd Pref are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, OFG Bancorp 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 OFG Bancorp Pd Pref prominent markets.
Shortening product life cycle
– it is one of the major threat that OFG Bancorp Pd Pref is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– OFG Bancorp Pd Pref 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 industry regulations.
Increasing wage structure of OFG Bancorp 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 OFG Bancorp Pd Pref.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for OFG Bancorp Pd Pref in industry. The 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents OFG Bancorp Pd Pref with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– OFG Bancorp Pd Pref 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.
Consumer confidence and its impact on OFG Bancorp 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 industry and other sectors.
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. OFG Bancorp Pd Pref needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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
– OFG Bancorp 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. OFG Bancorp Pd Pref can take advantage of this fund but it will also bring new competitors in the industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of OFG Bancorp Pd Pref business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of OFG Bancorp Pd Pref Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at OFG Bancorp 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 OFG Bancorp 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 OFG Bancorp 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 OFG Bancorp 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 OFG Bancorp Pd Pref needs to make to build a sustainable competitive advantage.
