SWOT analysis is a strategic planning tool that can be used by First Midwest Bancorp, Inc. managers to do a situational analysis of the firm . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) First Midwest Bancorp, Inc. is facing in its current business environment.
The First Midwest Bancorp, Inc. is one of the leading companies in its industry. First Midwest Bancorp, Inc. maintains its dominant 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.
The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the First Midwest Bancorp, Inc. to develop four types of strategies:
The core purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect First Midwest Bancorp, Inc. strengths, and eradicate its weaknesses.
As one of the leading firms in its industry, First Midwest Bancorp, Inc. has numerous strengths that enable 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 First Midwest Bancorp, Inc. are –
Superb Performance in New Markets – First Midwest Bancorp, Inc. 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.
Automation of activities brought consistency of quality to First Midwest Bancorp, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Highly skilled workforce through successful training and learning programs. First Midwest Bancorp, Inc. 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 Brand Portfolio – Over the years First Midwest Bancorp, Inc. has invested in building a strong brand portfolio. The SWOT analysis of First Midwest Bancorp, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Strong Free Cash Flow – First Midwest Bancorp, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Weakness are the areas where First Midwest Bancorp, 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.
High attrition rate in work force – compare to other organizations in the industry First Midwest Bancorp, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Investment in Research and Development is below the fastest growing players in the industry. Even though First Midwest Bancorp, Inc. 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, First Midwest Bancorp, 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.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though First Midwest Bancorp, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
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 First Midwest Bancorp, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as First Midwest Bancorp, Inc. to increase its profitability.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for First Midwest Bancorp, Inc. to capture new customers and increase its market share.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided First Midwest Bancorp, Inc. an opportunity to enter a new emerging market.
The market development will lead to dilution of competitor’s advantage and enable First Midwest Bancorp, Inc. to increase its competitiveness compare to the other competitors.
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 First Midwest Bancorp, Inc. in other product categories.
Government green drive also opens an opportunity for procurement of First Midwest Bancorp, Inc. products by the state as well as federal government contractors.
The new technology provides an opportunity to First Midwest Bancorp, 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.
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 First Midwest Bancorp, 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.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of First Midwest Bancorp, Inc.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for First Midwest Bancorp, Inc. in those markets.
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 First Midwest Bancorp, Inc.
This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis First Midwest Bancorp, 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.