Lakshmi Machine Works (LKMC) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lakshmi Machine Works (India)

Based on various researches at Oak Spring University , Lakshmi Machine Works is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, supply chains are disrupted by pandemic , technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of Lakshmi Machine Works

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lakshmi Machine Works can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lakshmi Machine Works, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lakshmi Machine Works 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 Lakshmi Machine Works can be done for the following purposes –
1. Strategic planning of Lakshmi Machine Works
2. Improving business portfolio management of Lakshmi Machine Works
3. Assessing feasibility of the new initiative in India
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lakshmi Machine Works

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Strengths of Lakshmi Machine Works | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Lakshmi Machine Works are -

High switching costs

– The high switching costs that Lakshmi Machine Works 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.

High brand equity

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

Successful track record of launching new products

– Lakshmi Machine Works has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lakshmi Machine Works 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.

Innovation driven organization

– Lakshmi Machine Works is one of the most innovative firm in Misc. Capital Goods sector.

Effective Research and Development (R&D)

– Lakshmi Machine Works has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lakshmi Machine Works staying ahead in the Misc. Capital Goods 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 Lakshmi Machine Works in the Capital Goods sector have low bargaining power. Lakshmi Machine Works has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lakshmi Machine Works to manage not only supply disruptions but also source products at highly competitive prices.

Strong track record of project management in the Misc. Capital Goods industry

– Lakshmi Machine Works is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Analytics focus

– Lakshmi Machine Works 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. Capital Goods 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.

Ability to recruit top talent

– Lakshmi Machine Works is one of the leading players in the Misc. Capital Goods industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.

Cross disciplinary teams

– Horizontal connected teams at the Lakshmi Machine Works 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.

Diverse revenue streams

– Lakshmi Machine Works is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Lakshmi Machine Works 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 Lakshmi Machine Works

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

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Weaknesses of Lakshmi Machine Works | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Lakshmi Machine Works are -

Compensation and incentives

– The revenue per employee of Lakshmi Machine Works is just above the Misc. Capital Goods 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lakshmi Machine Works is slow explore the new channels of communication. These new channels of communication can help Lakshmi Machine Works to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.

Skills based hiring in Misc. Capital Goods industry

– The stress on hiring functional specialists at Lakshmi Machine Works 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.

Increasing silos among functional specialists

– The organizational structure of Lakshmi Machine Works is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Lakshmi Machine Works needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lakshmi Machine Works to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.

High operating costs

– Compare to the competitors, Lakshmi Machine Works has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lakshmi Machine Works lucrative customers.

Capital Spending Reduction

– Even during the low interest decade, Lakshmi Machine Works 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 Misc. Capital Goods industry using digital technology.

Aligning sales with marketing

– From the outside it seems that Lakshmi Machine Works needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Lakshmi Machine Works can leverage the sales team experience to cultivate customer relationships as Lakshmi Machine Works is planning to shift buying processes online.

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

Low market penetration in new markets

– Outside its home market of India, Lakshmi Machine Works needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High dependence on Lakshmi Machine Works ‘s star products

– The top 2 products and services of Lakshmi Machine Works still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Lakshmi Machine Works has relatively successful track record of launching new products.

Slow decision making process

– As mentioned earlier in the report, Lakshmi Machine Works 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. Capital Goods industry over the last five years. Lakshmi Machine Works 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.

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Lakshmi Machine Works Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Lakshmi Machine Works are -

Learning at scale

– Online learning technologies has now opened space for Lakshmi Machine Works 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Lakshmi Machine Works in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lakshmi Machine Works 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. Lakshmi Machine Works 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.

Buying journey improvements

– Lakshmi Machine Works can improve the customer journey of consumers in the Misc. Capital Goods 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.

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. Lakshmi Machine Works can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Lakshmi Machine Works 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.

Leveraging digital technologies

– Lakshmi Machine Works 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.

Creating value in data economy

– The success of analytics program of Lakshmi Machine Works has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Lakshmi Machine Works to build a more holistic ecosystem for Lakshmi Machine Works products in the Misc. Capital Goods 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, Lakshmi Machine Works 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 Lakshmi Machine Works to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lakshmi Machine Works can use these opportunities to build new business models that can help the communities that Lakshmi Machine Works operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Lakshmi Machine Works can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Lakshmi Machine Works is facing challenges because of the dominance of functional experts in the organization. Lakshmi Machine Works can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Lakshmi Machine Works can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats Lakshmi Machine Works External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Lakshmi Machine Works are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lakshmi Machine Works in Misc. Capital Goods industry. The Misc. Capital Goods 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Lakshmi Machine Works 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. Capital Goods sector.

Environmental challenges

– Lakshmi Machine Works 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. Lakshmi Machine Works can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.

Easy access to finance

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

Increasing wage structure of Lakshmi Machine Works

– 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 Lakshmi Machine Works.

Consumer confidence and its impact on Lakshmi Machine Works 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. Capital Goods industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Lakshmi Machine Works 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 Lakshmi Machine Works prominent markets.

Regulatory challenges

– Lakshmi Machine Works 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. Capital Goods industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Lakshmi Machine Works with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

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. Lakshmi Machine Works needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Lakshmi Machine Works 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 Misc. Capital Goods industry.

High dependence on third party suppliers

– Lakshmi Machine Works 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.

Shortening product life cycle

– it is one of the major threat that Lakshmi Machine Works is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Lakshmi Machine Works Template, Example

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

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