SKF B (SKFB) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SKF B (India)
Based on various researches at Oak Spring University , SKF B is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation, technology disruption, 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, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SKF B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SKF B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SKF B 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 SKF B can be done for the following purposes –
1. Strategic planning of SKF B
2. Improving business portfolio management of SKF B
3. Assessing feasibility of the new initiative in India
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SKF B
Strengths of SKF B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SKF B are -
Innovation driven organization
– SKF B is one of the most innovative firm in Misc. Fabricated Products sector.
Analytics focus
– SKF B 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 Misc. Fabricated Products industry. The technology infrastructure of India 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.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For SKF B digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SKF B 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.
Diverse revenue streams
– SKF B is present in almost all the verticals within the Misc. Fabricated Products industry. This has provided SKF B 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.
Highly skilled collaborators
– SKF B has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of SKF B have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Misc. Fabricated Products industry
– SKF B is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of SKF B in Misc. Fabricated Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Misc. Fabricated Products industry
– SKF B has clearly differentiated products in the market place. This has enabled SKF B to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped SKF B to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– SKF B has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SKF B staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of SKF B in the Basic Materials sector have low bargaining power. SKF B has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SKF B to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Misc. Fabricated Products
– SKF B is one of the leading players in the Misc. Fabricated Products industry in India. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in India but also across the existing markets. The ability to lead change has enabled SKF B in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of SKF B
– The covid-19 pandemic has put organizational resilience at the centre of everthing SKF B does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of SKF B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SKF B are -
Slow to strategic competitive environment developments
– As SKF B is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
High bargaining power of channel partners in Misc. Fabricated Products industry
– because of the regulatory requirements in India, SKF B 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 Misc. Fabricated Products industry.
Aligning sales with marketing
– From the outside it seems that SKF B needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at SKF B can leverage the sales team experience to cultivate customer relationships as SKF B is planning to shift buying processes online.
Skills based hiring in Misc. Fabricated Products industry
– The stress on hiring functional specialists at SKF B 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.
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 SKF B supply chain. Even after few cautionary changes, SKF B is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SKF B vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– SKF B 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.
Ability to respond to the competition
– As the decision making is very deliberative at SKF B, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. SKF B has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the Misc. Fabricated Products industry, SKF B needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, SKF B has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Fabricated Products industry over the last five years. SKF B 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.
Interest costs
– Compare to the competition, SKF B 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.
Products dominated business model
– Even though SKF B has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SKF B should strive to include more intangible value offerings along with its core products and services.
SKF B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SKF B are -
Creating value in data economy
– The success of analytics program of SKF B has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help SKF B to build a more holistic ecosystem for SKF B products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, SKF B 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 SKF B to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 SKF B 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.
Manufacturing automation
– SKF B can use the latest technology developments to improve its manufacturing and designing process in Misc. Fabricated Products 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.
Building a culture of innovation
– managers at SKF B 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 Misc. Fabricated Products industry.
Leveraging digital technologies
– SKF B 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.
Buying journey improvements
– SKF B can improve the customer journey of consumers in the Misc. Fabricated 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SKF B 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 SKF B to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help SKF B to increase its market reach. SKF B 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, SKF B can use these opportunities to build new business models that can help the communities that SKF B operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. SKF B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for SKF B 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.
Using analytics as competitive advantage
– SKF B has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled SKF B to build a competitive advantage using analytics. The analytics driven competitive advantage can help SKF B to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats SKF B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SKF B are -
Regulatory challenges
– SKF B 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 Misc. Fabricated Products industry regulations.
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 SKF B business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– SKF B has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, SKF B needs to keep up with the evolution of technology in the Misc. Fabricated 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.
Increasing wage structure of SKF B
– 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 SKF B.
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 SKF B.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents SKF B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, SKF B may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Fabricated Products sector.
Shortening product life cycle
– it is one of the major threat that SKF B is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. SKF B 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.
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. SKF B needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SKF B can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on SKF B 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 Misc. Fabricated Products industry and other sectors.
Weighted SWOT Analysis of SKF B Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SKF B 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 SKF B 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 SKF B 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 SKF B 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 SKF B needs to make to build a sustainable competitive advantage.
