SWOT Analysis / TOWS Matrix for IFB Industries Ltd (India)
Based on various researches at Oak Spring University , IFB Industries Ltd is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
wage bills are increasing, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of IFB Industries Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that IFB Industries Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the IFB Industries Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which IFB Industries Ltd 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 IFB Industries Ltd can be done for the following purposes –
1. Strategic planning of IFB Industries Ltd
2. Improving business portfolio management of IFB Industries Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of IFB Industries Ltd
Strengths of IFB Industries Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of IFB Industries Ltd are -
Superior customer experience
– The customer experience strategy of IFB Industries Ltd in Appliance & Tool industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– IFB Industries Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – IFB Industries Ltd staying ahead in the Appliance & Tool 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 IFB Industries Ltd 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.
Analytics focus
– IFB Industries Ltd 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 Appliance & Tool 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.
Low bargaining power of suppliers
– Suppliers of IFB Industries Ltd in the Consumer Cyclical sector have low bargaining power. IFB Industries Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps IFB Industries Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– IFB Industries Ltd 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.
Organizational Resilience of IFB Industries Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing IFB Industries Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– IFB Industries Ltd is one of the leading players in the Appliance & Tool 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.
Operational resilience
– The operational resilience strategy of IFB Industries Ltd comprises – understanding the underlying the factors in the Appliance & Tool 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.
Strong track record of project management in the Appliance & Tool industry
– IFB Industries Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Appliance & Tool industry
- digital transformation varies from industry to industry. For IFB Industries Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. IFB Industries Ltd 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.
High brand equity
– IFB Industries Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled IFB Industries Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of IFB Industries Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of IFB Industries Ltd are -
Ability to respond to the competition
– As the decision making is very deliberative at IFB Industries Ltd, in the dynamic environment of Appliance & Tool industry it has struggled to respond to the nimble upstart competition. IFB Industries Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of India, IFB Industries Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, IFB Industries Ltd has high operating costs in the Appliance & Tool industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract IFB Industries Ltd lucrative customers.
Interest costs
– Compare to the competition, IFB Industries Ltd 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.
High dependence on IFB Industries Ltd ‘s star products
– The top 2 products and services of IFB Industries Ltd still accounts for major business revenue. This dependence on star products in Appliance & Tool industry has resulted into insufficient focus on developing new products, even though IFB Industries Ltd has relatively successful track record of launching new products.
Products dominated business model
– Even though IFB Industries Ltd has some of the most successful models in the Appliance & Tool industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. IFB Industries Ltd should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the Appliance & Tool industry, IFB Industries Ltd 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.
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 IFB Industries Ltd supply chain. Even after few cautionary changes, IFB Industries Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left IFB Industries Ltd vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of IFB Industries Ltd is just above the Appliance & Tool 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.
Lack of clear differentiation of IFB Industries Ltd products
– To increase the profitability and margins on the products, IFB Industries Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, IFB Industries Ltd 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 Appliance & Tool industry using digital technology.
IFB Industries Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of IFB Industries Ltd are -
Learning at scale
– Online learning technologies has now opened space for IFB Industries Ltd 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.
Buying journey improvements
– IFB Industries Ltd can improve the customer journey of consumers in the Appliance & Tool 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. IFB Industries Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– IFB Industries Ltd 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Appliance & Tool industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. IFB Industries Ltd 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. IFB Industries Ltd 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.
Better consumer reach
– The expansion of the 5G network will help IFB Industries Ltd to increase its market reach. IFB Industries Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, IFB Industries Ltd is facing challenges because of the dominance of functional experts in the organization. IFB Industries Ltd can utilize new technology in the field of Appliance & Tool industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– IFB Industries Ltd can use the latest technology developments to improve its manufacturing and designing process in Appliance & Tool 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
– IFB Industries Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, IFB Industries Ltd 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 IFB Industries Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Appliance & Tool industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for IFB Industries Ltd in the Appliance & Tool industry. Now IFB Industries Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, IFB Industries Ltd 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 IFB Industries Ltd has opened avenues for new revenue streams for the organization in Appliance & Tool industry. This can help IFB Industries Ltd to build a more holistic ecosystem for IFB Industries Ltd products in the Appliance & Tool industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats IFB Industries Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of IFB Industries Ltd are -
High dependence on third party suppliers
– IFB Industries Ltd 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.
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.
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. IFB Industries Ltd 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Appliance & Tool industry are lowering. It can presents IFB Industries Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Appliance & Tool sector.
Shortening product life cycle
– it is one of the major threat that IFB Industries Ltd is facing in Appliance & Tool sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. IFB Industries Ltd needs to understand the core reasons impacting the Appliance & Tool industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Appliance & Tool industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. IFB Industries Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– IFB Industries Ltd 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 Appliance & Tool 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 IFB Industries Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of IFB Industries Ltd
– 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 IFB Industries Ltd.
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 IFB Industries Ltd in the Appliance & Tool sector and impact the bottomline of the organization.
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 IFB Industries Ltd.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, IFB Industries Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Appliance & Tool sector.
Weighted SWOT Analysis of IFB Industries Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at IFB Industries Ltd 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 IFB Industries Ltd 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 IFB Industries Ltd 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 IFB Industries Ltd 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 IFB Industries Ltd needs to make to build a sustainable competitive advantage.