Lumina (8470) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lumina (Hong Kong)

Based on various researches at Oak Spring University , Lumina is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, there is backlash against globalization, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Lumina

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

SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Lumina can be done for the following purposes –
1. Strategic planning of Lumina
2. Improving business portfolio management of Lumina
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Security Systems & Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lumina

Strengths of Lumina | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Lumina are -

Ability to lead change in Security Systems & Services

– Lumina is one of the leading players in the Security Systems & Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Security Systems & Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Lumina in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Lumina 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.

Ability to recruit top talent

– Lumina is one of the leading players in the Security Systems & Services industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.

Organizational Resilience of Lumina

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

Learning organization

- Lumina 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 Lumina is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lumina emphasize – knowledge, initiative, and innovation.

Superior customer experience

– The customer experience strategy of Lumina in Security Systems & Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Diverse revenue streams

– Lumina is present in almost all the verticals within the Security Systems & Services industry. This has provided Lumina 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.

Effective Research and Development (R&D)

– Lumina has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lumina staying ahead in the Security Systems & Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Analytics focus

– Lumina is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Security Systems & Services industry. The technology infrastructure of Hong Kong is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Innovation driven organization

– Lumina is one of the most innovative firm in Security Systems & Services sector.

High brand equity

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

Highly skilled collaborators

– Lumina has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Security Systems & Services industry. Secondly the value chain collaborators of Lumina have helped the firm to develop new products and bring them quickly to the marketplace.

Weaknesses of Lumina | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Lumina are -

Skills based hiring in Security Systems & Services industry

– The stress on hiring functional specialists at Lumina has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Need for greater diversity

– Lumina 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 Lumina ‘s star products

– The top 2 products and services of Lumina still accounts for major business revenue. This dependence on star products in Security Systems & Services industry has resulted into insufficient focus on developing new products, even though Lumina has relatively successful track record of launching new products.

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 Lumina supply chain. Even after few cautionary changes, Lumina is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lumina vulnerable to further global disruptions in South East Asia.

High bargaining power of channel partners in Security Systems & Services industry

– because of the regulatory requirements in Hong Kong, Lumina is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Security Systems & Services industry.

High operating costs

– Compare to the competitors, Lumina has high operating costs in the Security Systems & Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lumina lucrative customers.

Slow to strategic competitive environment developments

– As Lumina is one of the leading players in the Security Systems & Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Security Systems & Services industry in last five years.

Compensation and incentives

– The revenue per employee of Lumina is just above the Security Systems & Services industry average. It 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.

Ability to respond to the competition

– As the decision making is very deliberative at Lumina, in the dynamic environment of Security Systems & Services industry it has struggled to respond to the nimble upstart competition. Lumina has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, Lumina 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 Security Systems & Services industry using digital technology.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lumina is slow explore the new channels of communication. These new channels of communication can help Lumina to provide better information regarding Security Systems & Services products and services. It can also build an online community to further reach out to potential customers.

Lumina Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Lumina 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. Lumina can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Lumina 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Lumina can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Lumina to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Buying journey improvements

– Lumina can improve the customer journey of consumers in the Security Systems & Services industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Manufacturing automation

– Lumina can use the latest technology developments to improve its manufacturing and designing process in Security Systems & Services sector. 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Lumina in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Security Systems & Services industry, and it will provide faster access to the consumers.

Learning at scale

– Online learning technologies has now opened space for Lumina 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.

Creating value in data economy

– The success of analytics program of Lumina has opened avenues for new revenue streams for the organization in Security Systems & Services industry. This can help Lumina to build a more holistic ecosystem for Lumina products in the Security Systems & Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lumina to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Lumina to hire the very best people irrespective of their geographical location.

Using analytics as competitive advantage

– Lumina has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Security Systems & Services sector. This continuous investment in analytics has enabled Lumina to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lumina to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lumina can use these opportunities to build new business models that can help the communities that Lumina operates in. Secondly it can use opportunities from government spending in Security Systems & Services sector.

Leveraging digital technologies

– Lumina 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.

Building a culture of innovation

– managers at Lumina can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Security Systems & Services industry.

Threats Lumina External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Lumina are -

Technology acceleration in Forth Industrial Revolution

– Lumina has witnessed rapid integration of technology during Covid-19 in the Security Systems & Services industry. As one of the leading players in the industry, Lumina needs to keep up with the evolution of technology in the Security Systems & Services 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.

Environmental challenges

– Lumina needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Lumina can take advantage of this fund but it will also bring new competitors in the Security Systems & Services industry.

Barriers of entry lowering

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

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 Lumina business can come under increasing regulations regarding data privacy, data security, etc.

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.

Stagnating economy with rate increase

– Lumina 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 Security Systems & Services industry.

Regulatory challenges

– Lumina needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Security Systems & Services industry regulations.

High dependence on third party suppliers

– Lumina 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.

Easy access to finance

– Easy access to finance in Security Systems & Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lumina can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Lumina 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 Lumina prominent markets.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lumina in Security Systems & Services industry. The Security Systems & Services industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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. Lumina needs to understand the core reasons impacting the Security Systems & Services industry. This will help it in building a better workplace.

Increasing wage structure of Lumina

– 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 Lumina.

Weighted SWOT Analysis of Lumina Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lumina 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 Lumina 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 Lumina 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 Lumina 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 Lumina needs to make to build a sustainable competitive advantage.

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