OFG Bancorp SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by OFG Bancorp managers to do a situational analysis of the organization . It is an important technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) OFG Bancorp is facing in its current business environment.

The OFG Bancorp is one of the leading firms in its industry. OFG Bancorp maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework helps 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 helps the managers of the OFG Bancorp 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 core purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect OFG Bancorp strengths, and eradicate its weaknesses.

Step by Step Guide to OFG Bancorp SWOT Analysis

Strengths of OFG Bancorp – Internal Strategic Factors

As one of the leading companies in its industry, OFG Bancorp 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 OFG Bancorp are –

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• Highly successful at Go To Market strategies for its products.
• 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 skilled workforce through successful training and learning programs. OFG Bancorp 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.
• Strong distribution network – Over the years OFG Bancorp has built a reliable distribution network that can reach majority of its potential market.
• Strong Brand Portfolio – Over the years OFG Bancorp has invested in building a strong brand portfolio. The SWOT analysis of OFG Bancorp just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Successful track record of developing new products – product innovation.
• Automation of activities brought consistency of quality to OFG Bancorp products and has enabled the company to scale up and scale down based on the demand conditions in the market.

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Weakness of OFG Bancorp – Internal Strategic Factors

Weakness are the areas where OFG Bancorp can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
• Investment in Research and Development is below the fastest growing players in the industry. Even though OFG Bancorp 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.
• 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.
• Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• The profitability ratio and Net Contribution % of OFG Bancorp are below the industry average.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though OFG Bancorp is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for OFG Bancorp – External Strategic Factors

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• The new technology provides an opportunity to OFG Bancorp 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.
• New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for OFG Bancorp. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• 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.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of OFG Bancorp.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for OFG Bancorp to capture new customers and increase its market share.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as OFG Bancorp to increase its profitability.
• Government green drive also opens an opportunity for procurement of OFG Bancorp products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable OFG Bancorp to increase its competitiveness compare to the other competitors.

Threats OFG Bancorp Facing - External Strategic Factors

• 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.
• Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for OFG Bancorp   in those markets.
• Imitation of the counterfeit and low quality product is also a threat to OFG Bancorp’s product especially in the emerging markets and low income markets.
• Liability laws in different countries are different and OFG Bancorp may be exposed to various liability claims given change in policies in those markets.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of OFG Bancorp
• Rising raw material can pose a threat to the OFG Bancorp profitability.

Limitations of SWOT Analysis for OFG Bancorp

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 OFG Bancorp
• 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.

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Weighted SWOT Analysis of OFG Bancorp

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 OFG Bancorp 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 OFG Bancorp

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

You can email us to get an example document of Weighted SWOT analysis.

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)