Provident Financial Services, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Provident Financial Services, Inc. managers to do a situational analysis of the firm . It is an important technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Provident Financial Services, Inc. is facing in its current business environment.

The Provident Financial Services, Inc. is one of the leading organizatations in its industry. Provident Financial Services, Inc. maintains its prominent position in market by carefully 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.


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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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Provident Financial Services, Inc. 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 an organization can use to exploit external opportunities, counter threats, and build on & protect Provident Financial Services, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Provident Financial Services, Inc. SWOT Analysis

Strengths of Provident Financial Services, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, Provident Financial Services, Inc. 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 Provident Financial Services, Inc. are –

Read - Provident Financial Services, Inc. Porter 5 Forces Analysis & Industry Analysis
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• 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 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.
• Good Returns on Capital Expenditure – Provident Financial Services, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
• Strong Brand Portfolio – Over the years Provident Financial Services, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Provident Financial Services, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Strong distribution network – Over the years Provident Financial Services, Inc. has built a reliable distribution network that can reach majority of its potential market.
• High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
• Automation of activities brought consistency of quality to Provident Financial Services, Inc. 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 Provident Financial Services, Inc. – Internal Strategic Factors

Weakness are the areas where Provident Financial Services, Inc. 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.

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• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Provident Financial Services, Inc. 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.
• High attrition rate in work force – compare to other organizations in the industry Provident Financial Services, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• 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 Provident Financial Services, Inc.
• The profitability ratio and Net Contribution % of Provident Financial Services, Inc. are below the industry average.
• 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.
• Limited success outside core business – Even though Provident Financial Services, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Provident Financial Services, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Provident Financial Services, Inc. – External Strategic Factors

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• Government green drive also opens an opportunity for procurement of Provident Financial Services, Inc. products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable Provident Financial Services, Inc. to increase its competitiveness compare to the other competitors.
• 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 Provident Financial Services, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• The new technology provides an opportunity to Provident Financial Services, Inc. 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.
• 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 Provident Financial Services, Inc. in other product categories.
• 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.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Provident Financial Services, Inc. an opportunity to enter a new emerging market.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Provident Financial Services, Inc. to capture new customers and increase its market share.

Threats Provident Financial Services, Inc. Facing - External Strategic Factors

• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.
• Rising raw material can pose a threat to the Provident Financial Services, Inc. profitability.
• Liability laws in different countries are different and Provident Financial Services, Inc. may be exposed to various liability claims given change in policies in those markets.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Provident Financial Services, Inc.

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 Provident Financial Services, Inc.
• 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 Provident Financial Services, Inc.

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 Provident Financial Services, Inc. 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 Provident Financial Services, Inc.

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)