Based on various researches at Oak Spring University , Provident Bancorp Inc is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
there is increasing trade war between United States & China, geopolitical disruptions, etc
Introduction to SWOT Analysis of Provident Bancorp Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Provident Bancorp Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Provident Bancorp Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Provident Bancorp Inc 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 Provident Bancorp Inc can be done for the following purposes –
1. Strategic planning of Provident Bancorp Inc
2. Improving business portfolio management of Provident Bancorp Inc
3. Assessing feasibility of the new initiative in United States
4. Making a Regional Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Provident Bancorp Inc
Strengths of Provident Bancorp Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Provident Bancorp Inc are -
High switching costs
– The high switching costs that Provident Bancorp Inc 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.
Highly skilled collaborators
– Provident Bancorp Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Regional Banks industry. Secondly the value chain collaborators of Provident Bancorp Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Provident Bancorp Inc has one of the best training and development program in Financial industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Successful track record of launching new products
– Provident Bancorp Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Provident Bancorp Inc 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
– Provident Bancorp Inc is present in almost all the verticals within the Regional Banks industry. This has provided Provident Bancorp Inc 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.
Sustainable margins compare to other players in Regional Banks industry
– Provident Bancorp Inc has clearly differentiated products in the market place. This has enabled Provident Bancorp Inc to fetch slight price premium compare to the competitors in the Regional Banks industry. The sustainable margins have also helped Provident Bancorp Inc to invest into research and development (R&D) and innovation.
Learning organization
- Provident Bancorp Inc 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 Provident Bancorp Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Provident Bancorp Inc emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Provident Bancorp Inc in Regional Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Regional Banks industry
– Provident Bancorp Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Provident Bancorp Inc in the Financial sector have low bargaining power. Provident Bancorp Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Provident Bancorp Inc to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Provident Bancorp Inc
– The covid-19 pandemic has put organizational resilience at the centre of everthing Provident Bancorp Inc does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Regional Banks
– Provident Bancorp Inc is one of the leading players in the Regional Banks industry in United States. Over the years it has not only transformed the business landscape in the Regional Banks industry in United States but also across the existing markets. The ability to lead change has enabled Provident Bancorp Inc in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Provident Bancorp Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Provident Bancorp Inc are -
Lack of clear differentiation of Provident Bancorp Inc products
– To increase the profitability and margins on the products, Provident Bancorp Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Provident Bancorp Inc has some of the most successful models in the Regional Banks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Provident Bancorp Inc should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Provident Bancorp Inc 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.
Employees’ less understanding of Provident Bancorp Inc strategy
– From the outside it seems that the employees of Provident Bancorp Inc 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.
Aligning sales with marketing
– From the outside it seems that Provident Bancorp Inc needs to have more collaboration between its sales team and marketing team. Sales professionals in the Regional Banks industry have deep experience in developing customer relationships. Marketing department at Provident Bancorp Inc can leverage the sales team experience to cultivate customer relationships as Provident Bancorp Inc is planning to shift buying processes online.
High dependence on Provident Bancorp Inc ‘s star products
– The top 2 products and services of Provident Bancorp Inc still accounts for major business revenue. This dependence on star products in Regional Banks industry has resulted into insufficient focus on developing new products, even though Provident Bancorp Inc 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, Provident Bancorp Inc is slow explore the new channels of communication. These new channels of communication can help Provident Bancorp Inc to provide better information regarding Regional Banks products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Provident Bancorp Inc 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.
Compensation and incentives
– The revenue per employee of Provident Bancorp Inc is just above the Regional Banks 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.
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 Provident Bancorp Inc supply chain. Even after few cautionary changes, Provident Bancorp Inc is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Provident Bancorp Inc vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Provident Bancorp Inc, in the dynamic environment of Regional Banks industry it has struggled to respond to the nimble upstart competition. Provident Bancorp Inc has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Provident Bancorp Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Provident Bancorp Inc are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Provident Bancorp Inc can use these opportunities to build new business models that can help the communities that Provident Bancorp Inc operates in. Secondly it can use opportunities from government spending in Regional Banks sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Provident Bancorp Inc is facing challenges because of the dominance of functional experts in the organization. Provident Bancorp Inc can utilize new technology in the field of Regional Banks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Provident Bancorp Inc 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 Provident Bancorp Inc to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Provident Bancorp Inc 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 Regional Banks industry.
Use of Bitcoin and other crypto currencies for transactions in Regional Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Provident Bancorp Inc in the Regional Banks industry. Now Provident Bancorp Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Provident Bancorp Inc can improve the customer journey of consumers in the Regional Banks 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Regional Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Provident Bancorp Inc 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. Provident Bancorp Inc 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.
Loyalty marketing
– Provident Bancorp Inc 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.
Learning at scale
– Online learning technologies has now opened space for Provident Bancorp Inc 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Provident Bancorp Inc 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 Provident Bancorp Inc to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Provident Bancorp Inc to increase its market reach. Provident Bancorp Inc 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Provident Bancorp Inc 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.
Creating value in data economy
– The success of analytics program of Provident Bancorp Inc has opened avenues for new revenue streams for the organization in Regional Banks industry. This can help Provident Bancorp Inc to build a more holistic ecosystem for Provident Bancorp Inc products in the Regional Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Provident Bancorp Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Provident Bancorp Inc are -
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.
Increasing wage structure of Provident Bancorp Inc
– 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 Provident Bancorp Inc.
Technology acceleration in Forth Industrial Revolution
– Provident Bancorp Inc has witnessed rapid integration of technology during Covid-19 in the Regional Banks industry. As one of the leading players in the industry, Provident Bancorp Inc needs to keep up with the evolution of technology in the Regional Banks 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.
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 Provident Bancorp Inc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Regional Banks industry are lowering. It can presents Provident Bancorp Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Regional Banks sector.
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 Provident Bancorp Inc in the Regional Banks sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Provident Bancorp Inc 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.
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 Provident Bancorp Inc business can come under increasing regulations regarding data privacy, data security, 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. Provident Bancorp Inc needs to understand the core reasons impacting the Regional Banks industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Provident Bancorp Inc in Regional Banks industry. The Regional Banks 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Provident Bancorp Inc 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 Provident Bancorp Inc prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Provident Bancorp Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Regional Banks sector.
Environmental challenges
– Provident Bancorp Inc 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. Provident Bancorp Inc can take advantage of this fund but it will also bring new competitors in the Regional Banks industry.
Weighted SWOT Analysis of Provident Bancorp Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Provident Bancorp Inc 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 Provident Bancorp Inc 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 Provident Bancorp Inc 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 Provident Bancorp Inc 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 Provident Bancorp Inc needs to make to build a sustainable competitive advantage.