Armscor: Life After Apartheid? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Armscor: Life After Apartheid?

After taking office, South Africa's new president, Nelson Mandela, must decide whether to dismantle or support Armscor, South Africa's state-owned arms company, which has been a pillar of the apartheid regime. Complicating matters is the fact that the arms industry was South Africa's leading manufacturing exporter and a major employer. If Mandela chooses to support Armscor, the company must develop a strategy to obtain a much larger share of a rapidly declining world market.

Authors :: Michael J. Enright, Stephan Boden, Benjamin Smith

Topics :: Global Business

Tags :: International business, National competitiveness, Research & development, Social responsibility, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Armscor: Life After Apartheid?" written by Michael J. Enright, Stephan Boden, Benjamin Smith includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Armscor Africa's facing as an external strategic factors. Some of the topics covered in Armscor: Life After Apartheid? case study are - Strategic Management Strategies, International business, National competitiveness, Research & development, Social responsibility and Global Business.

Some of the macro environment factors that can be used to understand the Armscor: Life After Apartheid? casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , there is backlash against globalization, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing commodity prices, etc

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Introduction to SWOT Analysis of Armscor: Life After Apartheid?

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Armscor: Life After Apartheid? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Armscor Africa's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Armscor Africa's operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Armscor: Life After Apartheid? can be done for the following purposes –
1. Strategic planning using facts provided in Armscor: Life After Apartheid? case study
2. Improving business portfolio management of Armscor Africa's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Armscor Africa's

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Strengths Armscor: Life After Apartheid? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Armscor Africa's in Armscor: Life After Apartheid? Harvard Business Review case study are -

Ability to lead change in Global Business field

– Armscor Africa's is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Armscor Africa's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Highly skilled collaborators

– Armscor Africa's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Armscor: Life After Apartheid? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to recruit top talent

– Armscor Africa's is one of the leading recruiters in the industry. Managers in the Armscor: Life After Apartheid? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

High brand equity

– Armscor Africa's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Armscor Africa's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

High switching costs

– The high switching costs that Armscor Africa's has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Organizational Resilience of Armscor Africa's

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Armscor Africa's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Effective Research and Development (R&D)

– Armscor Africa's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Armscor: Life After Apartheid? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- Armscor Africa's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Armscor Africa's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Armscor: Life After Apartheid? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Armscor Africa's is one of the most innovative firm in sector. Manager in Armscor: Life After Apartheid? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Operational resilience

– The operational resilience strategy in the Armscor: Life After Apartheid? Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Diverse revenue streams

– Armscor Africa's is present in almost all the verticals within the industry. This has provided firm in Armscor: Life After Apartheid? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For Armscor Africa's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Armscor Africa's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

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Weaknesses Armscor: Life After Apartheid? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Armscor: Life After Apartheid? are -

Products dominated business model

– Even though Armscor Africa's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Armscor: Life After Apartheid? should strive to include more intangible value offerings along with its core products and services.

Slow decision making process

– As mentioned earlier in the report, Armscor Africa's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Armscor Africa's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Armscor: Life After Apartheid? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Armscor Africa's has relatively successful track record of launching new products.

Need for greater diversity

– Armscor Africa's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Armscor Africa's supply chain. Even after few cautionary changes mentioned in the HBR case study - Armscor: Life After Apartheid?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Armscor Africa's vulnerable to further global disruptions in South East Asia.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Armscor: Life After Apartheid?, is just above the industry average. Armscor Africa's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Capital Spending Reduction

– Even during the low interest decade, Armscor Africa's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.

High cash cycle compare to competitors

Armscor Africa's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Interest costs

– Compare to the competition, Armscor Africa's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Slow to strategic competitive environment developments

– As Armscor: Life After Apartheid? HBR case study mentions - Armscor Africa's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Low market penetration in new markets

– Outside its home market of Armscor Africa's, firm in the HBR case study Armscor: Life After Apartheid? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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Opportunities Armscor: Life After Apartheid? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities highlighted in the Harvard Business Review case study Armscor: Life After Apartheid? are -

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Armscor Africa's can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Low interest rates

– Even though inflation is raising its head in most developed economies, Armscor Africa's can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Use of Bitcoin and other crypto currencies for transactions

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Armscor Africa's in the consumer business. Now Armscor Africa's can target international markets with far fewer capital restrictions requirements than the existing system.

Learning at scale

– Online learning technologies has now opened space for Armscor Africa's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

Loyalty marketing

– Armscor Africa's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Armscor Africa's can use these opportunities to build new business models that can help the communities that Armscor Africa's operates in. Secondly it can use opportunities from government spending in Global Business sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Armscor Africa's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Armscor Africa's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Armscor Africa's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Leveraging digital technologies

– Armscor Africa's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Using analytics as competitive advantage

– Armscor Africa's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Armscor: Life After Apartheid? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Armscor Africa's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Developing new processes and practices

– Armscor Africa's can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Manufacturing automation

– Armscor Africa's can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Creating value in data economy

– The success of analytics program of Armscor Africa's has opened avenues for new revenue streams for the organization in the industry. This can help Armscor Africa's to build a more holistic ecosystem as suggested in the Armscor: Life After Apartheid? case study. Armscor Africa's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

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Threats Armscor: Life After Apartheid? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Armscor: Life After Apartheid? are -

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Armscor Africa's.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Armscor Africa's business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Armscor Africa's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Armscor: Life After Apartheid? .

Shortening product life cycle

– it is one of the major threat that Armscor Africa's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Armscor Africa's

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Armscor Africa's.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Armscor: Life After Apartheid?, Armscor Africa's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Armscor Africa's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Armscor Africa's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Armscor Africa's needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Armscor Africa's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Stagnating economy with rate increase

– Armscor Africa's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

High dependence on third party suppliers

– Armscor Africa's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Armscor Africa's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Aging population

– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.

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Weighted SWOT Analysis of Armscor: Life After Apartheid? Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Armscor: Life After Apartheid? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Armscor: Life After Apartheid? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Armscor: Life After Apartheid? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Armscor: Life After Apartheid? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Armscor Africa's needs to make to build a sustainable competitive advantage.

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