Based on Fern Fort University extensive research – some of the strengths of Discover Financial Services are –. Today, banks have developed into digital entities that offer financial services and products from the comfort of your couch. PNC Financial Services Weaknesses Here are the weaknesses in the PNC Financial Services SWOT Analysis: 1. Strong distribution network – Over the years Discover Financial Services has built a reliable distribution network that can reach majority of its potential market. 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. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics. Buy Professional PPT templates to impress your boss. Request A Free 30 Minute Consultation, company’s profitability, liquidity and solvency ratios are weak, a tax advisor that understands your business, Top 5 Financial Challenges in the Transportation Industry, Five Tips for Buying or Selling a Business. It represent a great opportunity for Discover Financial Services to drive home its advantage in new technology and gain market share in the new product category. services with new financial products which cater to the need of weaker section of the society. It is very difficult to improve something without measuring it first. Note: SWOT analysis applies when you’ve made a decision and taken action. To offer context to the strategic SWOT, the property profile includes a description of Financial Times, its major products and services, commercial model, technology used, notable competitors and a list of the key people involved with the business. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Is your business allowing customers to pay in the future for goods and services delivered today? There are gaps in the product range sold by the company. Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments. Internal factors - The strengths and weaknesses internal to the organization. If not, you may need to change your strategy to improve your business ROI. The weakness of this large structure is that it could lead to inefficiency in their working or mismanagement. Superb Performance in New Markets – Discover Financial Services has built expertise at entering new markets and making success of them. You may want to consider having a certified public accountant take a look at your financial statements so they can perform an audit or a review, and let you know what is not being done correctly. 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. 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. Is its financial position weakening each year? Business owners need to ensure they have a solid team of business advisors to address their changing business needs as they grow. Just like any other investment you might make, it is important that you get the required return on your business investments, one that is commensurate with the risk you as a business owner are taking. A financial analysis assists in identifying the major strengths and weakness of a business enterprise. SWOT is a static assessment - analysis of status quo with few prospective changes. Even though Discover Financial Services 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. SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning. Strengthen your business financial ratios to help reduce your cost of capital. Good Returns on Capital Expenditure – Discover Financial Services is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams. Apart from this, on the basis of the financial analysis of the firm, it should also be noted down that there are some major financial weaknesses that the firm must take on priority. If your business is experiencing any of the financial weaknesses listed above, it is in your best interest to get the financial support you need to address these weaknesses as soon as possible! New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. Furthermore, if their business is not increasing its cash in the bank, what areas need to be fixed. The Discover Financial Services is one of the leading firms in its industry. They will be disrupted by the inherent, and hidden, weakness in their business models, and by their dependence on generations-old processes … If your accounting staff has no formal education or training in preparing financial statements in compliance with Generally Accepted Accounting Principles (GAAP), there’s a good chance that your financial statements are not accurate. Read More. The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards 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 Discover Financial Services, Certain capabilities or factors of an organization can be both a strength and weakness at the same time. Does Your Company Have a Good Cost Reduction Program. For instance, the entire life insurance business is in the hands of LIC. Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Discover Financial Services an opportunity to enter a new emerging market. Discover Financial Services 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. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance. Call us today (480) 980-3977. Significant exposure to residential mortgage banking (RMB) which is increasing its non- interest expense 2. The following is an example of a SWOT (strengths, weaknesses, opportunities and threats) analysis conducted by a business trying to decide if they should introduce a new product to their range. Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model. Strengths in the SWOT analysis of Wells Fargo. Fluctuating currencies and exchange rates canalso be trouble for banks. This will help you learn which business strategies are working and which ones are not. This method is called Weighted SWOT analysis. We will get your business the results that it deserves. Strong Brand Portfolio – Over the years Discover Financial Services has invested in building a strong brand portfolio. There are two ways to improve this metric, increase the company net income by a greater amount than your investment, or reduce your investment by a greater amount than your reduction in net income. Fern Fort University. Industry assets stand at $143 trillion (2013)&the EU is the largest regional market, with over 57% of the global market. Liability laws in different countries are different and Discover Financial Services may be exposed to various liability claims given change in policies in those markets. It is important to take some time each year to benchmark your business performance against your competition. Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Discover Financial Services’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share. The recent data breach at Facebook is a case in point. Should it face a recession, the rest of the world (andbanks) could suffer by proxy. That is, your company’s profitability, liquidity and solvency ratios are weak. A SWOT Analysis is a strategic management tool that is often used in business to analyze a company, process, system, business opportunity, etc. A SWOT (strengths, weaknesses, opportunities and threats) analysis can help you identify and understand key issues affecting your business, but it does not necessarily offer solutions. (adsbygoogle = window.adsbygoogle || []).push({}); This will help them determine, at the end of the day, if they are actually increasing or decreasing their cash in the bank. 2. Strong Free Cash Flow – Discover Financial Services has strong free cash flows that provide resources in the hand of the company to expand into new projects. Through a SWOT Analysis of your financial plan we can assess your progress towards your financial planning goals. Lack Of coordination: The global banking industry faces short-term uncertainty due to the debt crises that challenge several major economies. Right now the investment in technologies is not at par with the vision of the company. Discover Financial Services maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis. Weakness are the areas where Discover Financial Services can improve upon. You should be aware of the limitations as well as the benefits of a SWOT … When you consider which weaknesses to mention in an interview, keep in mind that you should focus on qualities that are not central to the requirements of the job for which you are interviewing. The key is to identify those key drivers of your business, set goals for these drivers and monitor your performance relative to these goals, on a periodic basis. The former include the leasing companies, mutual funds, merchant bankers and issue/portfolio managers. Weaknesses. If your bank, investors or business partners are having trouble reading your financial statements, they may not be accurate. Is your company income increasing each year? It leads to a 2X2 matrix – also called SWOT Matrix. One way of measuring business performance is by measuring your business return on investment (“ROI”). As a result, your business has increased risk associated with it. 3. They are just awesome. This can be used by Discover Financial Services, and will involve the identification of its internal Strengths (S) and Weaknesses (W) followed by the identification of the Opportunities (O) and Threats (T) it faces in its extensivelyrnal business environment. 2016). Is your business equipment being utilized greater than 90% of the time? 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). Weakness of Discover Financial Services – Internal Strategic Factors Weakness are the areas where Discover Financial Services can improve upon. 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These strategic plans enable business owners to plan for growth, set goals, understand the market and competition and make the right investment in people and capital at the right time. In relation, the company suffers from a low degree of diversification, as the business focuses mainly on financial service operations. It has come across as a mature firm looking forward to bring out products based on tested features in the market. Financial services include the services offered by both types of companies—asset management companies and liability management companies. 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. For example, if you are applying for a job in accounting, you don’t want to say your weakness is mathematics. Volatility in different market/Currencies has created … : MIT Press, 1962). All rights reserved. 9) Making it compulsory for banks to undertake financial literacy activities once in a month. With tax laws changing on an annual basis it is even more important to have a tax advisor that understands your business, is helping you plan for your business growth and putting in place the appropriate tax plan to keep taxes at a minimum. Perhaps your destinations are all in the U.S., which limits your growth, or there are a large number of new competitors entering the market, decreasing your market share. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning. Monopolistic market structures: In India some financial institutions are so large that they have created a monopolistic market structures in the financial system. About Discover Financial Services : Discover Financial Services, Inc is an American company providing financial services. 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