Based on various researches at Oak Spring University , OFG Bancorp Pd Pref is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing energy prices,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
Highly skilled collaborators
– OFG Bancorp 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 industry. Secondly the value chain collaborators of OFG Bancorp Pd Pref have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of OFG Bancorp Pd Pref in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Successful track record of launching new products
– OFG Bancorp Pd Pref has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. OFG Bancorp Pd Pref 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.
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.
Innovation driven organization
– OFG Bancorp Pd Pref is one of the most innovative firm in sector.
Cross disciplinary teams
– Horizontal connected teams at the OFG Bancorp Pd Pref are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy of OFG Bancorp Pd Pref comprises – understanding the underlying the factors in the 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.
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.
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.
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 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.
Low market penetration in new markets
– Outside its home market of United States, OFG Bancorp Pd Pref needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of OFG Bancorp Pd Pref, it seems that company is thinking out the frontier risks that can impact 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.
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.
Employees’ less understanding of OFG Bancorp Pd Pref strategy
– From the outside it seems that the employees of OFG Bancorp Pd Pref 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.
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.
High operating costs
– Compare to the competitors, OFG Bancorp Pd Pref has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract OFG Bancorp Pd Pref lucrative customers.
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.
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.
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.
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.
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 -
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.
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.
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.
Using analytics as competitive advantage
– OFG Bancorp Pd Pref has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled OFG Bancorp Pd Pref to build a competitive advantage using analytics. The analytics driven competitive advantage can help OFG Bancorp Pd Pref to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– OFG Bancorp Pd Pref can use the latest technology developments to improve its manufacturing and designing process in 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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help OFG Bancorp Pd Pref to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. OFG Bancorp Pd Pref can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for OFG Bancorp 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 OFG Bancorp Pd Pref to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, OFG Bancorp 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 OFG Bancorp 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. OFG Bancorp 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. OFG Bancorp 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.
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 -
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.
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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. OFG Bancorp 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.
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 OFG Bancorp Pd Pref.
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. OFG Bancorp Pd Pref 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.
Stagnating economy with rate increase
– OFG Bancorp 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 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 OFG Bancorp Pd Pref in the sector and impact the bottomline of the organization.
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.
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.
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 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, OFG Bancorp 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 sector.
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.