Based on various researches at Oak Spring University , PartnerRe Ltd Pf Pref is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing commodity prices,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, etc
Introduction to SWOT Analysis of PartnerRe Ltd Pf Pref
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that PartnerRe Ltd Pf Pref can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PartnerRe Ltd Pf Pref, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PartnerRe Ltd Pf 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 PartnerRe Ltd Pf Pref can be done for the following purposes –
1. Strategic planning of PartnerRe Ltd Pf Pref
2. Improving business portfolio management of PartnerRe Ltd Pf Pref
3. Assessing feasibility of the new initiative in United States
4. Making a Insurance (Prop. & Casualty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PartnerRe Ltd Pf Pref
Strengths of PartnerRe Ltd Pf Pref | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PartnerRe Ltd Pf Pref are -
Analytics focus
– PartnerRe Ltd Pf 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 Insurance (Prop. & Casualty) 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.
Superior customer experience
– The customer experience strategy of PartnerRe Ltd Pf Pref in Insurance (Prop. & Casualty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– PartnerRe Ltd Pf Pref is present in almost all the verticals within the Insurance (Prop. & Casualty) industry. This has provided PartnerRe Ltd Pf 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
– PartnerRe Ltd Pf Pref is one of the most innovative firm in Insurance (Prop. & Casualty) sector.
Sustainable margins compare to other players in Insurance (Prop. & Casualty) industry
– PartnerRe Ltd Pf Pref has clearly differentiated products in the market place. This has enabled PartnerRe Ltd Pf Pref to fetch slight price premium compare to the competitors in the Insurance (Prop. & Casualty) industry. The sustainable margins have also helped PartnerRe Ltd Pf Pref to invest into research and development (R&D) and innovation.
Organizational Resilience of PartnerRe Ltd Pf Pref
– The covid-19 pandemic has put organizational resilience at the centre of everthing PartnerRe Ltd Pf Pref does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of PartnerRe Ltd Pf Pref in the Financial sector have low bargaining power. PartnerRe Ltd Pf Pref has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PartnerRe Ltd Pf Pref to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Insurance (Prop. & Casualty) industry
- digital transformation varies from industry to industry. For PartnerRe Ltd Pf Pref digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. PartnerRe Ltd Pf 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 switching costs
– The high switching costs that PartnerRe Ltd Pf 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.
Cross disciplinary teams
– Horizontal connected teams at the PartnerRe Ltd Pf 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 PartnerRe Ltd Pf Pref comprises – understanding the underlying the factors in the Insurance (Prop. & Casualty) 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.
Strong track record of project management in the Insurance (Prop. & Casualty) industry
– PartnerRe Ltd Pf 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.
Weaknesses of PartnerRe Ltd Pf Pref | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PartnerRe Ltd Pf Pref are -
Capital Spending Reduction
– Even during the low interest decade, PartnerRe Ltd Pf Pref 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 Insurance (Prop. & Casualty) industry using digital technology.
High operating costs
– Compare to the competitors, PartnerRe Ltd Pf Pref has high operating costs in the Insurance (Prop. & Casualty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract PartnerRe Ltd Pf Pref lucrative customers.
High dependence on PartnerRe Ltd Pf Pref ‘s star products
– The top 2 products and services of PartnerRe Ltd Pf Pref still accounts for major business revenue. This dependence on star products in Insurance (Prop. & Casualty) industry has resulted into insufficient focus on developing new products, even though PartnerRe Ltd Pf Pref has relatively successful track record of launching new products.
Employees’ less understanding of PartnerRe Ltd Pf Pref strategy
– From the outside it seems that the employees of PartnerRe Ltd Pf 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.
Lack of clear differentiation of PartnerRe Ltd Pf Pref products
– To increase the profitability and margins on the products, PartnerRe Ltd Pf Pref needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of PartnerRe Ltd Pf Pref, it seems that company is thinking out the frontier risks that can impact Insurance (Prop. & Casualty) 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.
Slow to strategic competitive environment developments
– As PartnerRe Ltd Pf Pref is one of the leading players in the Insurance (Prop. & Casualty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Insurance (Prop. & Casualty) industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at PartnerRe Ltd Pf Pref, in the dynamic environment of Insurance (Prop. & Casualty) industry it has struggled to respond to the nimble upstart competition. PartnerRe Ltd Pf Pref has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of PartnerRe Ltd Pf Pref is just above the Insurance (Prop. & Casualty) 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.
Increasing silos among functional specialists
– The organizational structure of PartnerRe Ltd Pf Pref is dominated by functional specialists. It is not different from other players in the Insurance (Prop. & Casualty) industry, but PartnerRe Ltd Pf Pref needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PartnerRe Ltd Pf Pref to focus more on services in the Insurance (Prop. & Casualty) industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, PartnerRe Ltd Pf Pref 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.
PartnerRe Ltd Pf Pref Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PartnerRe Ltd Pf Pref are -
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. PartnerRe Ltd Pf Pref can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– PartnerRe Ltd Pf 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.
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 PartnerRe Ltd Pf 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.
Use of Bitcoin and other crypto currencies for transactions in Insurance (Prop. & Casualty) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for PartnerRe Ltd Pf Pref in the Insurance (Prop. & Casualty) industry. Now PartnerRe Ltd Pf Pref can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at PartnerRe Ltd Pf 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 Insurance (Prop. & Casualty) industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PartnerRe Ltd Pf Pref can use these opportunities to build new business models that can help the communities that PartnerRe Ltd Pf Pref operates in. Secondly it can use opportunities from government spending in Insurance (Prop. & Casualty) sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for PartnerRe Ltd Pf 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 Insurance (Prop. & Casualty) industry, and it will provide faster access to the consumers.
Buying journey improvements
– PartnerRe Ltd Pf Pref can improve the customer journey of consumers in the Insurance (Prop. & Casualty) 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.
Leveraging digital technologies
– PartnerRe Ltd Pf 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, PartnerRe Ltd Pf 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects PartnerRe Ltd Pf Pref can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, PartnerRe Ltd Pf 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 PartnerRe Ltd Pf 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, PartnerRe Ltd Pf Pref is facing challenges because of the dominance of functional experts in the organization. PartnerRe Ltd Pf Pref can utilize new technology in the field of Insurance (Prop. & Casualty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats PartnerRe Ltd Pf Pref External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PartnerRe Ltd Pf Pref are -
Shortening product life cycle
– it is one of the major threat that PartnerRe Ltd Pf Pref is facing in Insurance (Prop. & Casualty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. PartnerRe Ltd Pf Pref needs to understand the core reasons impacting the Insurance (Prop. & Casualty) industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, PartnerRe Ltd Pf 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 PartnerRe Ltd Pf Pref prominent markets.
Technology acceleration in Forth Industrial Revolution
– PartnerRe Ltd Pf Pref has witnessed rapid integration of technology during Covid-19 in the Insurance (Prop. & Casualty) industry. As one of the leading players in the industry, PartnerRe Ltd Pf Pref needs to keep up with the evolution of technology in the Insurance (Prop. & Casualty) 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.
Increasing wage structure of PartnerRe Ltd Pf 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 PartnerRe Ltd Pf Pref.
High dependence on third party suppliers
– PartnerRe Ltd Pf 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for PartnerRe Ltd Pf Pref in Insurance (Prop. & Casualty) industry. The Insurance (Prop. & Casualty) 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 Insurance (Prop. & Casualty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. PartnerRe Ltd Pf Pref can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 PartnerRe Ltd Pf Pref business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Insurance (Prop. & Casualty) industry are lowering. It can presents PartnerRe Ltd Pf Pref with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Insurance (Prop. & Casualty) sector.
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.
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 PartnerRe Ltd Pf Pref.
Weighted SWOT Analysis of PartnerRe Ltd Pf Pref Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PartnerRe Ltd Pf 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 PartnerRe Ltd Pf 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 PartnerRe Ltd Pf 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 PartnerRe Ltd Pf 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 PartnerRe Ltd Pf Pref needs to make to build a sustainable competitive advantage.