SWOT Analysis / TOWS Matrix for Firstsource Solutions (India)
Based on various researches at Oak Spring University , Firstsource Solutions is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, wage bills are increasing, supply chains are disrupted by pandemic ,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Firstsource Solutions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Firstsource Solutions can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Firstsource Solutions, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Firstsource Solutions 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 Firstsource Solutions can be done for the following purposes –
1. Strategic planning of Firstsource Solutions
2. Improving business portfolio management of Firstsource Solutions
3. Assessing feasibility of the new initiative in India
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Firstsource Solutions
Strengths of Firstsource Solutions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Firstsource Solutions are -
High brand equity
– Firstsource Solutions has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Firstsource Solutions to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Firstsource Solutions is one of the leading players in the Computer Services 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.
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For Firstsource Solutions digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Firstsource Solutions 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.
Learning organization
- Firstsource Solutions 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 Firstsource Solutions is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Firstsource Solutions emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Firstsource Solutions has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Firstsource Solutions 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
– Firstsource Solutions is one of the most innovative firm in Computer Services sector.
Sustainable margins compare to other players in Computer Services industry
– Firstsource Solutions has clearly differentiated products in the market place. This has enabled Firstsource Solutions to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped Firstsource Solutions to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Firstsource Solutions comprises – understanding the underlying the factors in the Computer Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Firstsource Solutions is present in almost all the verticals within the Computer Services industry. This has provided Firstsource Solutions 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.
Superior customer experience
– The customer experience strategy of Firstsource Solutions in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Firstsource Solutions 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 Computer Services 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.
High switching costs
– The high switching costs that Firstsource Solutions 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.
Weaknesses of Firstsource Solutions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Firstsource Solutions are -
Capital Spending Reduction
– Even during the low interest decade, Firstsource Solutions 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 Computer Services industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Firstsource Solutions, in the dynamic environment of Computer Services industry it has struggled to respond to the nimble upstart competition. Firstsource Solutions has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Firstsource Solutions has a high cash cycle compare to other players in the Computer Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Computer Services industry
– The stress on hiring functional specialists at Firstsource Solutions 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.
Employees’ less understanding of Firstsource Solutions strategy
– From the outside it seems that the employees of Firstsource Solutions 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.
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 Firstsource Solutions supply chain. Even after few cautionary changes, Firstsource Solutions is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Firstsource Solutions vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Firstsource Solutions needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Services industry have deep experience in developing customer relationships. Marketing department at Firstsource Solutions can leverage the sales team experience to cultivate customer relationships as Firstsource Solutions is planning to shift buying processes online.
Lack of clear differentiation of Firstsource Solutions products
– To increase the profitability and margins on the products, Firstsource Solutions needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Firstsource Solutions has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Firstsource Solutions should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Firstsource Solutions is slow explore the new channels of communication. These new channels of communication can help Firstsource Solutions to provide better information regarding Computer Services products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Firstsource Solutions 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.
Firstsource Solutions Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Firstsource Solutions are -
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 Firstsource Solutions 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.
Better consumer reach
– The expansion of the 5G network will help Firstsource Solutions to increase its market reach. Firstsource Solutions 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.
Use of Bitcoin and other crypto currencies for transactions in Computer Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Firstsource Solutions in the Computer Services industry. Now Firstsource Solutions can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Firstsource Solutions can use these opportunities to build new business models that can help the communities that Firstsource Solutions operates in. Secondly it can use opportunities from government spending in Computer Services sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Firstsource Solutions can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Firstsource Solutions 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 Firstsource Solutions to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Firstsource Solutions 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 Computer Services industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Firstsource Solutions is facing challenges because of the dominance of functional experts in the organization. Firstsource Solutions can utilize new technology in the field of Computer Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Firstsource Solutions 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.
Creating value in data economy
– The success of analytics program of Firstsource Solutions has opened avenues for new revenue streams for the organization in Computer Services industry. This can help Firstsource Solutions to build a more holistic ecosystem for Firstsource Solutions products in the Computer Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Firstsource Solutions can use the latest technology developments to improve its manufacturing and designing process in Computer 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.
Leveraging digital technologies
– Firstsource Solutions 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Firstsource Solutions 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. Firstsource Solutions 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.
Threats Firstsource Solutions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Firstsource Solutions are -
Consumer confidence and its impact on Firstsource Solutions 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 Computer Services industry and other sectors.
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. Firstsource Solutions needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Firstsource Solutions 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 Firstsource Solutions prominent markets.
Shortening product life cycle
– it is one of the major threat that Firstsource Solutions is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Firstsource Solutions may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
Technology acceleration in Forth Industrial Revolution
– Firstsource Solutions has witnessed rapid integration of technology during Covid-19 in the Computer Services industry. As one of the leading players in the industry, Firstsource Solutions needs to keep up with the evolution of technology in the Computer 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.
Regulatory challenges
– Firstsource Solutions 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 Computer Services 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Firstsource Solutions in Computer Services industry. The Computer 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Services industry are lowering. It can presents Firstsource Solutions with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Services sector.
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 Firstsource Solutions.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Firstsource Solutions in the Computer Services sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Computer Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Firstsource Solutions can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Firstsource Solutions Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Firstsource Solutions 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 Firstsource Solutions 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 Firstsource Solutions 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 Firstsource Solutions 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 Firstsource Solutions needs to make to build a sustainable competitive advantage.