Ping An Bank SWOT Analysis / Matrix

Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Ping An Bank managers to do a situational analysis of the organization . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Ping An Bank is facing in its current business environment.

The Ping An Bank is one of the leading organizatations in its industry. Ping An Bank maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Ping An Bank to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect Ping An Bank strengths, and eradicate its weaknesses.

Step by Step Guide to Ping An Bank SWOT Analysis

Strengths of Ping An Bank – Internal Strategic Factors

As one of the leading companies in its industry, Ping An Bank has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Ping An Bank are –

Automation of activities brought consistency of quality to Ping An Bank products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Strong distribution network – Over the years Ping An Bank has built a reliable distribution network that can reach majority of its potential market.
Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Highly successful at Go To Market strategies for its products.
Strong Free Cash Flow – Ping An Bank has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Highly skilled workforce through successful training and learning programs. Ping An Bank is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
Superb Performance in New Markets – Ping An Bank has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.

Weakness of Ping An Bank – Internal Strategic Factors

Weakness are the areas where Ping An Bank can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Ping An Bank has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
The profitability ratio and Net Contribution % of Ping An Bank are below the industry average.
Investment in Research and Development is below the fastest growing players in the industry. Even though Ping An Bank is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Ping An Bank needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Ping An Bank is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Ping An Bank

Opportunities for Ping An Bank – External Strategic Factors

Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Ping An Bank an opportunity to enter a new emerging market.
Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Ping An Bank in other product categories.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Ping An Bank.
New trends in the consumer behavior can open up new market for the Ping An Bank . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
The new technology provides an opportunity to Ping An Bank to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
The market development will lead to dilution of competitor’s advantage and enable Ping An Bank to increase its competitiveness compare to the other competitors.
Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Ping An Bank to capture new customers and increase its market share.

Threats Ping An Bank Facing - External Strategic Factors

Imitation of the counterfeit and low quality product is also a threat to Ping An Bank’s product especially in the emerging markets and low income markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Ping An Bank in those markets.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Ping An Bank
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Limitations of SWOT Analysis for Ping An Bank

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Ping An Bank
SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Ping An Bank

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Ping An Bank managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Ping An Bank

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)