Western Asset Income Fund (PAI) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Financial Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Western Asset Income Fund (United States)
Based on various researches at Oak Spring University , Western Asset Income Fund is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Western Asset Income Fund
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Western Asset Income Fund can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Western Asset Income Fund, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Western Asset Income Fund 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 Western Asset Income Fund can be done for the following purposes –
1. Strategic planning of Western Asset Income Fund
2. Improving business portfolio management of Western Asset Income Fund
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 Western Asset Income Fund
Strengths of Western Asset Income Fund | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Western Asset Income Fund are -
Innovation driven organization
– Western Asset Income Fund is one of the most innovative firm in Misc. Financial Services sector.
Superior customer experience
– The customer experience strategy of Western Asset Income Fund in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Western Asset Income Fund 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.
Successful track record of launching new products
– Western Asset Income Fund has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Western Asset Income Fund 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.
Learning organization
- Western Asset Income Fund 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 Western Asset Income Fund is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Western Asset Income Fund emphasize – knowledge, initiative, and innovation.
Digital Transformation in Misc. Financial Services industry
- digital transformation varies from industry to industry. For Western Asset Income Fund digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Western Asset Income Fund 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.
Cross disciplinary teams
– Horizontal connected teams at the Western Asset Income Fund 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.
Analytics focus
– Western Asset Income Fund 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.
Low bargaining power of suppliers
– Suppliers of Western Asset Income Fund in the Financial sector have low bargaining power. Western Asset Income Fund has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Western Asset Income Fund to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Western Asset Income Fund has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Western Asset Income Fund to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Misc. Financial Services industry
– Western Asset Income Fund has clearly differentiated products in the market place. This has enabled Western Asset Income Fund to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Western Asset Income Fund to invest into research and development (R&D) and innovation.
Ability to lead change in Misc. Financial Services
– Western Asset Income Fund 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 Western Asset Income Fund in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Western Asset Income Fund | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Western Asset Income Fund are -
Need for greater diversity
– Western Asset Income Fund 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.
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 Western Asset Income Fund supply chain. Even after few cautionary changes, Western Asset Income Fund is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Western Asset Income Fund vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Western Asset Income Fund 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.
Products dominated business model
– Even though Western Asset Income Fund 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. Western Asset Income Fund should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Western Asset Income Fund is dominated by functional specialists. It is not different from other players in the Misc. Financial Services industry, but Western Asset Income Fund needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Western Asset Income Fund to focus more on services in the Misc. Financial Services industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Western Asset Income Fund 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. Western Asset Income Fund 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.
Ability to respond to the competition
– As the decision making is very deliberative at Western Asset Income Fund, in the dynamic environment of Misc. Financial Services industry it has struggled to respond to the nimble upstart competition. Western Asset Income Fund has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the Misc. Financial Services industry, Western Asset Income Fund 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.
Aligning sales with marketing
– From the outside it seems that Western Asset Income Fund needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Financial Services industry have deep experience in developing customer relationships. Marketing department at Western Asset Income Fund can leverage the sales team experience to cultivate customer relationships as Western Asset Income Fund is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Western Asset Income Fund has high operating costs in the Misc. Financial Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Western Asset Income Fund lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, Western Asset Income Fund needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Western Asset Income Fund Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Western Asset Income Fund are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Western Asset Income Fund 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Western Asset Income Fund can use these opportunities to build new business models that can help the communities that Western Asset Income Fund operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Western Asset Income Fund 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Financial Services industry, but it has also influenced the consumer preferences. Western Asset Income Fund can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Western Asset Income Fund to increase its market reach. Western Asset Income Fund 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Western Asset Income Fund 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 Western Asset Income Fund 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 Misc. Financial Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Western Asset Income Fund 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. Western Asset Income Fund 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Western Asset Income Fund can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Western Asset Income Fund in the Misc. Financial Services industry. Now Western Asset Income Fund can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Western Asset Income Fund 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.
Building a culture of innovation
– managers at Western Asset Income Fund 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Western Asset Income Fund 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 Western Asset Income Fund to hire the very best people irrespective of their geographical location.
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 Western Asset Income Fund 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.
Threats Western Asset Income Fund External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Western Asset Income Fund are -
Technology acceleration in Forth Industrial Revolution
– Western Asset Income Fund has witnessed rapid integration of technology during Covid-19 in the Misc. Financial Services industry. As one of the leading players in the industry, Western Asset Income Fund 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.
High dependence on third party suppliers
– Western Asset Income Fund 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 Western Asset Income Fund 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Western Asset Income Fund in Misc. Financial Services industry. The Misc. Financial Services 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.
Shortening product life cycle
– it is one of the major threat that Western Asset Income Fund 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
– Western Asset Income Fund 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. Western Asset Income Fund can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
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. Western Asset Income Fund can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Western Asset Income Fund 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Western Asset Income Fund 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Western Asset Income Fund 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 Western Asset Income Fund prominent markets.
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. Western Asset Income Fund 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 Western Asset Income Fund.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents Western Asset Income Fund 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.
Weighted SWOT Analysis of Western Asset Income Fund Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Western Asset Income Fund 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 Western Asset Income Fund 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 Western Asset Income Fund 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 Western Asset Income Fund 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 Western Asset Income Fund needs to make to build a sustainable competitive advantage.