Based on various researches at Oak Spring University , Flaherty & Crumrine Preferred Oppty is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, geopolitical disruptions, there is backlash against globalization, supply chains are disrupted by pandemic ,
increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Flaherty & Crumrine Preferred Oppty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Flaherty & Crumrine Preferred Oppty can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Flaherty & Crumrine Preferred Oppty, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty can be done for the following purposes –
1. Strategic planning of Flaherty & Crumrine Preferred Oppty
2. Improving business portfolio management of Flaherty & Crumrine Preferred Oppty
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 Flaherty & Crumrine Preferred Oppty
Strengths of Flaherty & Crumrine Preferred Oppty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Flaherty & Crumrine Preferred Oppty are -
Operational resilience
– The operational resilience strategy of Flaherty & Crumrine Preferred Oppty 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.
Sustainable margins compare to other players in Misc. Financial Services industry
– Flaherty & Crumrine Preferred Oppty has clearly differentiated products in the market place. This has enabled Flaherty & Crumrine Preferred Oppty to fetch slight price premium compare to the competitors in the Misc. Financial Services industry. The sustainable margins have also helped Flaherty & Crumrine Preferred Oppty to invest into research and development (R&D) and innovation.
Analytics focus
– Flaherty & Crumrine Preferred Oppty 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.
Effective Research and Development (R&D)
– Flaherty & Crumrine Preferred Oppty has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Flaherty & Crumrine Preferred Oppty staying ahead in the Misc. Financial Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Flaherty & Crumrine Preferred Oppty has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Flaherty & Crumrine Preferred Oppty to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Flaherty & Crumrine Preferred Oppty emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Flaherty & Crumrine Preferred Oppty in the Financial sector have low bargaining power. Flaherty & Crumrine Preferred Oppty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Flaherty & Crumrine Preferred Oppty to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Flaherty & Crumrine Preferred Oppty is one of the most innovative firm in Misc. Financial Services sector.
High switching costs
– The high switching costs that Flaherty & Crumrine Preferred Oppty 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.
Ability to recruit top talent
– Flaherty & Crumrine Preferred Oppty 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.
Superior customer experience
– The customer experience strategy of Flaherty & Crumrine Preferred Oppty in Misc. Financial Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Flaherty & Crumrine Preferred Oppty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Flaherty & Crumrine Preferred Oppty are -
High dependence on Flaherty & Crumrine Preferred Oppty ‘s star products
– The top 2 products and services of Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Flaherty & Crumrine Preferred Oppty is slow explore the new channels of communication. These new channels of communication can help Flaherty & Crumrine Preferred Oppty 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.
Products dominated business model
– Even though Flaherty & Crumrine Preferred Oppty 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. Flaherty & Crumrine Preferred Oppty should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Flaherty & Crumrine Preferred Oppty has a high cash cycle compare to other players in the Misc. Financial Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of United States, Flaherty & Crumrine Preferred Oppty needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Flaherty & Crumrine Preferred Oppty strategy
– From the outside it seems that the employees of Flaherty & Crumrine Preferred Oppty 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.
Skills based hiring in Misc. Financial Services industry
– The stress on hiring functional specialists at Flaherty & Crumrine Preferred Oppty 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 strategic competitive environment developments
– As Flaherty & Crumrine Preferred Oppty is one of the leading players in the Misc. Financial Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Financial Services industry in last five years.
Interest costs
– Compare to the competition, Flaherty & Crumrine Preferred Oppty 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.
High operating costs
– Compare to the competitors, Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty lucrative customers.
Lack of clear differentiation of Flaherty & Crumrine Preferred Oppty products
– To increase the profitability and margins on the products, Flaherty & Crumrine Preferred Oppty needs to provide more differentiated products than what it is currently offering in the marketplace.
Flaherty & Crumrine Preferred Oppty Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Flaherty & Crumrine Preferred Oppty are -
Buying journey improvements
– Flaherty & Crumrine Preferred Oppty 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.
Creating value in data economy
– The success of analytics program of Flaherty & Crumrine Preferred Oppty has opened avenues for new revenue streams for the organization in Misc. Financial Services industry. This can help Flaherty & Crumrine Preferred Oppty to build a more holistic ecosystem for Flaherty & Crumrine Preferred Oppty products in the Misc. Financial Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty to build a competitive advantage using analytics. The analytics driven competitive advantage can help Flaherty & Crumrine Preferred Oppty to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Flaherty & Crumrine Preferred Oppty 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Flaherty & Crumrine Preferred Oppty can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Flaherty & Crumrine Preferred Oppty can use these opportunities to build new business models that can help the communities that Flaherty & Crumrine Preferred Oppty operates in. Secondly it can use opportunities from government spending in Misc. Financial Services sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Flaherty & Crumrine Preferred Oppty can use the latest technology developments to improve its manufacturing and designing process in Misc. Financial Services 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.
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. Flaherty & Crumrine Preferred Oppty can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Flaherty & Crumrine Preferred Oppty 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.
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. Flaherty & Crumrine Preferred Oppty 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. Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Flaherty & Crumrine Preferred Oppty are -
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. Flaherty & Crumrine Preferred Oppty needs to understand the core reasons impacting the Misc. Financial Services industry. This will help it in building a better workplace.
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. Flaherty & Crumrine Preferred Oppty can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Flaherty & Crumrine Preferred Oppty is facing in Misc. Financial Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Flaherty & Crumrine Preferred Oppty 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.
Environmental challenges
– Flaherty & Crumrine Preferred Oppty 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. Flaherty & Crumrine Preferred Oppty can take advantage of this fund but it will also bring new competitors in the Misc. Financial Services industry.
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.
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 Flaherty & Crumrine Preferred Oppty in the Misc. Financial Services sector and impact the bottomline of the organization.
Increasing wage structure of Flaherty & Crumrine Preferred Oppty
– 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 Flaherty & Crumrine Preferred Oppty.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Flaherty & Crumrine Preferred Oppty 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.
High dependence on third party suppliers
– Flaherty & Crumrine Preferred Oppty 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Financial Services industry are lowering. It can presents Flaherty & Crumrine Preferred Oppty 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty prominent markets.
Consumer confidence and its impact on Flaherty & Crumrine Preferred Oppty 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.
Weighted SWOT Analysis of Flaherty & Crumrine Preferred Oppty Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty 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 Flaherty & Crumrine Preferred Oppty needs to make to build a sustainable competitive advantage.
