SWOT Analysis / TOWS Matrix for EDICO Holdings (Hong Kong)
Based on various researches at Oak Spring University , EDICO Holdings is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
technology disruption, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that EDICO Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the EDICO Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which EDICO Holdings 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 EDICO Holdings can be done for the following purposes –
1. Strategic planning of EDICO Holdings
2. Improving business portfolio management of EDICO Holdings
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Printing Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of EDICO Holdings
Strengths of EDICO Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of EDICO Holdings are -
Analytics focus
– EDICO Holdings 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 Printing 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.
Organizational Resilience of EDICO Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing EDICO Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that EDICO Holdings 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.
Sustainable margins compare to other players in Printing Services industry
– EDICO Holdings has clearly differentiated products in the market place. This has enabled EDICO Holdings to fetch slight price premium compare to the competitors in the Printing Services industry. The sustainable margins have also helped EDICO Holdings to invest into research and development (R&D) and innovation.
Innovation driven organization
– EDICO Holdings is one of the most innovative firm in Printing Services sector.
Effective Research and Development (R&D)
– EDICO Holdings has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – EDICO Holdings staying ahead in the Printing Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the EDICO Holdings 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.
Learning organization
- EDICO Holdings 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 EDICO Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at EDICO Holdings emphasize – knowledge, initiative, and innovation.
High brand equity
– EDICO Holdings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled EDICO Holdings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Printing Services
– EDICO Holdings is one of the leading players in the Printing Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Printing Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled EDICO Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of EDICO Holdings in Printing Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Printing Services industry
- digital transformation varies from industry to industry. For EDICO Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. EDICO Holdings 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.
Weaknesses of EDICO Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of EDICO Holdings are -
Aligning sales with marketing
– From the outside it seems that EDICO Holdings needs to have more collaboration between its sales team and marketing team. Sales professionals in the Printing Services industry have deep experience in developing customer relationships. Marketing department at EDICO Holdings can leverage the sales team experience to cultivate customer relationships as EDICO Holdings is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, EDICO Holdings is slow explore the new channels of communication. These new channels of communication can help EDICO Holdings to provide better information regarding Printing Services products and services. It can also build an online community to further reach out to potential customers.
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 EDICO Holdings supply chain. Even after few cautionary changes, EDICO Holdings is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left EDICO Holdings vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Printing Services industry
– because of the regulatory requirements in Hong Kong, EDICO Holdings 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 Printing Services industry.
Increasing silos among functional specialists
– The organizational structure of EDICO Holdings is dominated by functional specialists. It is not different from other players in the Printing Services industry, but EDICO Holdings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help EDICO Holdings to focus more on services in the Printing Services industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, EDICO Holdings 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 Printing Services industry using digital technology.
Products dominated business model
– Even though EDICO Holdings has some of the most successful models in the Printing Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. EDICO Holdings should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at EDICO Holdings, in the dynamic environment of Printing Services industry it has struggled to respond to the nimble upstart competition. EDICO Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Printing Services industry
– The stress on hiring functional specialists at EDICO Holdings 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.
Low market penetration in new markets
– Outside its home market of Hong Kong, EDICO Holdings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, EDICO Holdings has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Printing Services industry over the last five years. EDICO Holdings 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.
EDICO Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of EDICO Holdings 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. EDICO Holdings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– EDICO Holdings can use the latest technology developments to improve its manufacturing and designing process in Printing 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Printing Services industry, but it has also influenced the consumer preferences. EDICO Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Printing Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. EDICO Holdings 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. EDICO Holdings 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, EDICO Holdings 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 in Printing Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for EDICO Holdings in the Printing Services industry. Now EDICO Holdings can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for EDICO Holdings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Printing Services industry, and it will provide faster access to the consumers.
Buying journey improvements
– EDICO Holdings can improve the customer journey of consumers in the Printing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects EDICO Holdings can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– EDICO Holdings 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 EDICO Holdings 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 Printing Services industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, EDICO Holdings 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 EDICO Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– EDICO Holdings can develop new processes and procedures in Printing Services 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.
Threats EDICO Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of EDICO Holdings are -
Increasing wage structure of EDICO Holdings
– 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 EDICO Holdings.
High dependence on third party suppliers
– EDICO Holdings 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.
Consumer confidence and its impact on EDICO Holdings demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Printing Services industry and other sectors.
Regulatory challenges
– EDICO Holdings 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 Printing Services industry regulations.
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 EDICO Holdings.
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. EDICO Holdings needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that EDICO Holdings is facing in Printing Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Printing Services industry are lowering. It can presents EDICO Holdings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing Services sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, EDICO Holdings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing Services sector.
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.
Environmental challenges
– EDICO Holdings 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. EDICO Holdings can take advantage of this fund but it will also bring new competitors in the Printing Services industry.
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 EDICO Holdings business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of EDICO Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at EDICO Holdings 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 EDICO Holdings 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 EDICO Holdings 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 EDICO Holdings 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 EDICO Holdings needs to make to build a sustainable competitive advantage.