Based on various researches at Oak Spring University , Elegance Optical Intl is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, wage bills are increasing, increasing commodity prices, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Elegance Optical Intl
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Elegance Optical Intl can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Elegance Optical Intl, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Elegance Optical Intl 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 Elegance Optical Intl can be done for the following purposes –
1. Strategic planning of Elegance Optical Intl
2. Improving business portfolio management of Elegance Optical Intl
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Recreational Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Elegance Optical Intl
Strengths of Elegance Optical Intl | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Elegance Optical Intl are -
Learning organization
- Elegance Optical Intl 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 Elegance Optical Intl is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Elegance Optical Intl emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Elegance Optical Intl 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.
Superior customer experience
– The customer experience strategy of Elegance Optical Intl in Recreational Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Elegance Optical Intl in the Consumer Cyclical sector have low bargaining power. Elegance Optical Intl has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Elegance Optical Intl to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Elegance Optical Intl is present in almost all the verticals within the Recreational Products industry. This has provided Elegance Optical Intl 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.
Organizational Resilience of Elegance Optical Intl
– The covid-19 pandemic has put organizational resilience at the centre of everthing Elegance Optical Intl does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Elegance Optical Intl has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Elegance Optical Intl has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Elegance Optical Intl has one of the best training and development program in Consumer Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Elegance Optical Intl is one of the most innovative firm in Recreational Products sector.
Highly skilled collaborators
– Elegance Optical Intl has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Recreational Products industry. Secondly the value chain collaborators of Elegance Optical Intl have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Elegance Optical Intl are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Recreational Products
– Elegance Optical Intl is one of the leading players in the Recreational Products industry in Hong Kong. Over the years it has not only transformed the business landscape in the Recreational Products industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Elegance Optical Intl in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Elegance Optical Intl | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Elegance Optical Intl are -
Products dominated business model
– Even though Elegance Optical Intl has some of the most successful models in the Recreational Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Elegance Optical Intl should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Elegance Optical Intl is just above the Recreational Products 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.
No frontier risks strategy
– From the 10K / annual statement of Elegance Optical Intl, it seems that company is thinking out the frontier risks that can impact Recreational Products industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Elegance Optical Intl has a high cash cycle compare to other players in the Recreational Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Recreational Products industry
– because of the regulatory requirements in Hong Kong, Elegance Optical Intl 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 Recreational Products industry.
Aligning sales with marketing
– From the outside it seems that Elegance Optical Intl needs to have more collaboration between its sales team and marketing team. Sales professionals in the Recreational Products industry have deep experience in developing customer relationships. Marketing department at Elegance Optical Intl can leverage the sales team experience to cultivate customer relationships as Elegance Optical Intl is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Hong Kong, Elegance Optical Intl needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Elegance Optical Intl strategy
– From the outside it seems that the employees of Elegance Optical Intl don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Elegance Optical Intl products
– To increase the profitability and margins on the products, Elegance Optical Intl needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Elegance Optical Intl is one of the leading players in the Recreational Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Recreational Products industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Elegance Optical Intl is dominated by functional specialists. It is not different from other players in the Recreational Products industry, but Elegance Optical Intl needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Elegance Optical Intl to focus more on services in the Recreational Products industry rather than just following the product oriented approach.
Elegance Optical Intl Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Elegance Optical Intl are -
Creating value in data economy
– The success of analytics program of Elegance Optical Intl has opened avenues for new revenue streams for the organization in Recreational Products industry. This can help Elegance Optical Intl to build a more holistic ecosystem for Elegance Optical Intl products in the Recreational Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Elegance Optical Intl can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Elegance Optical Intl in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Products industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Recreational Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Elegance Optical Intl 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. Elegance Optical Intl 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Elegance Optical Intl 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.
Building a culture of innovation
– managers at Elegance Optical Intl 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 Recreational Products industry.
Better consumer reach
– The expansion of the 5G network will help Elegance Optical Intl to increase its market reach. Elegance Optical Intl will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Elegance Optical Intl can use these opportunities to build new business models that can help the communities that Elegance Optical Intl operates in. Secondly it can use opportunities from government spending in Recreational Products sector.
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. Elegance Optical Intl can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Elegance Optical Intl can develop new processes and procedures in Recreational Products 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Elegance Optical Intl to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Elegance Optical Intl can improve the customer journey of consumers in the Recreational Products 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Elegance Optical Intl 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 Elegance Optical Intl to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Elegance Optical Intl External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Elegance Optical Intl are -
Regulatory challenges
– Elegance Optical Intl 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 Recreational Products industry regulations.
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.
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. Elegance Optical Intl needs to understand the core reasons impacting the Recreational Products industry. This will help it in building a better workplace.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Elegance Optical Intl 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 Elegance Optical Intl prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Recreational Products industry are lowering. It can presents Elegance Optical Intl with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Products sector.
High dependence on third party suppliers
– Elegance Optical Intl 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 Recreational Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Elegance Optical Intl can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Elegance Optical Intl may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Products sector.
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. Elegance Optical Intl 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.
Stagnating economy with rate increase
– Elegance Optical Intl 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 Recreational Products industry.
Environmental challenges
– Elegance Optical Intl 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. Elegance Optical Intl can take advantage of this fund but it will also bring new competitors in the Recreational Products industry.
Technology acceleration in Forth Industrial Revolution
– Elegance Optical Intl has witnessed rapid integration of technology during Covid-19 in the Recreational Products industry. As one of the leading players in the industry, Elegance Optical Intl needs to keep up with the evolution of technology in the Recreational Products 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.
Weighted SWOT Analysis of Elegance Optical Intl Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Elegance Optical Intl 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 Elegance Optical Intl 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 Elegance Optical Intl 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 Elegance Optical Intl 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 Elegance Optical Intl needs to make to build a sustainable competitive advantage.
