APL Apollo Tubes Ltd (APLA) SWOT Analysis / TOWS Matrix / MBA Resources
Iron & Steel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for APL Apollo Tubes Ltd (India)
Based on various researches at Oak Spring University , APL Apollo Tubes Ltd is operating in a macro-environment that has been destablized by – increasing energy prices, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing transportation and logistics costs, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of APL Apollo Tubes Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that APL Apollo Tubes Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the APL Apollo Tubes Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which APL Apollo Tubes 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 APL Apollo Tubes Ltd can be done for the following purposes –
1. Strategic planning of APL Apollo Tubes Ltd
2. Improving business portfolio management of APL Apollo Tubes Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Iron & Steel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of APL Apollo Tubes Ltd
Strengths of APL Apollo Tubes Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of APL Apollo Tubes Ltd are -
Sustainable margins compare to other players in Iron & Steel industry
– APL Apollo Tubes Ltd has clearly differentiated products in the market place. This has enabled APL Apollo Tubes Ltd to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped APL Apollo Tubes Ltd to invest into research and development (R&D) and innovation.
Strong track record of project management in the Iron & Steel industry
– APL Apollo Tubes 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.
Analytics focus
– APL Apollo Tubes 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 Iron & Steel 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.
Successful track record of launching new products
– APL Apollo Tubes Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. APL Apollo Tubes Ltd 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.
Operational resilience
– The operational resilience strategy of APL Apollo Tubes Ltd comprises – understanding the underlying the factors in the Iron & Steel 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.
Digital Transformation in Iron & Steel industry
- digital transformation varies from industry to industry. For APL Apollo Tubes Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. APL Apollo Tubes 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.
Effective Research and Development (R&D)
– APL Apollo Tubes Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – APL Apollo Tubes Ltd staying ahead in the Iron & Steel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– APL Apollo Tubes Ltd has one of the best training and development program in Basic Materials 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.
Highly skilled collaborators
– APL Apollo Tubes Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Iron & Steel industry. Secondly the value chain collaborators of APL Apollo Tubes Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of APL Apollo Tubes Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing APL Apollo Tubes Ltd 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 APL Apollo Tubes Ltd 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.
Superior customer experience
– The customer experience strategy of APL Apollo Tubes Ltd in Iron & Steel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of APL Apollo Tubes Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of APL Apollo Tubes Ltd are -
Employees’ less understanding of APL Apollo Tubes Ltd strategy
– From the outside it seems that the employees of APL Apollo Tubes Ltd 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.
Skills based hiring in Iron & Steel industry
– The stress on hiring functional specialists at APL Apollo Tubes Ltd 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.
Ability to respond to the competition
– As the decision making is very deliberative at APL Apollo Tubes Ltd, in the dynamic environment of Iron & Steel industry it has struggled to respond to the nimble upstart competition. APL Apollo Tubes Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, APL Apollo Tubes 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 Iron & Steel industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, APL Apollo Tubes Ltd is slow explore the new channels of communication. These new channels of communication can help APL Apollo Tubes Ltd to provide better information regarding Iron & Steel products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, APL Apollo Tubes 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.
Increasing silos among functional specialists
– The organizational structure of APL Apollo Tubes Ltd is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but APL Apollo Tubes Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help APL Apollo Tubes Ltd to focus more on services in the Iron & Steel industry rather than just following the product 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 APL Apollo Tubes Ltd supply chain. Even after few cautionary changes, APL Apollo Tubes Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left APL Apollo Tubes Ltd vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, APL Apollo Tubes Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Iron & Steel industry over the last five years. APL Apollo Tubes Ltd 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.
High cash cycle compare to competitors
APL Apollo Tubes Ltd has a high cash cycle compare to other players in the Iron & Steel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Iron & Steel industry
– because of the regulatory requirements in India, APL Apollo Tubes Ltd 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 Iron & Steel industry.
APL Apollo Tubes Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of APL Apollo Tubes Ltd are -
Using analytics as competitive advantage
– APL Apollo Tubes Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Iron & Steel sector. This continuous investment in analytics has enabled APL Apollo Tubes Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help APL Apollo Tubes Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help APL Apollo Tubes Ltd to increase its market reach. APL Apollo Tubes 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, APL Apollo Tubes 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Iron & Steel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. APL Apollo Tubes 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. APL Apollo Tubes 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.
Developing new processes and practices
– APL Apollo Tubes Ltd can develop new processes and procedures in Iron & Steel 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. APL Apollo Tubes Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 APL Apollo Tubes Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for APL Apollo Tubes Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Iron & Steel industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of APL Apollo Tubes Ltd has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help APL Apollo Tubes Ltd to build a more holistic ecosystem for APL Apollo Tubes Ltd products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, APL Apollo Tubes Ltd is facing challenges because of the dominance of functional experts in the organization. APL Apollo Tubes Ltd can utilize new technology in the field of Iron & Steel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Iron & Steel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for APL Apollo Tubes Ltd in the Iron & Steel industry. Now APL Apollo Tubes Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for APL Apollo Tubes 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, APL Apollo Tubes 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 APL Apollo Tubes 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.
Threats APL Apollo Tubes Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of APL Apollo Tubes Ltd are -
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. APL Apollo Tubes Ltd needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, APL Apollo Tubes 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 Iron & Steel sector.
Easy access to finance
– Easy access to finance in Iron & Steel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. APL Apollo Tubes Ltd 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 APL Apollo Tubes 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 APL Apollo Tubes Ltd.
Environmental challenges
– APL Apollo Tubes Ltd 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. APL Apollo Tubes Ltd can take advantage of this fund but it will also bring new competitors in the Iron & Steel industry.
Stagnating economy with rate increase
– APL Apollo Tubes Ltd 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 Iron & Steel industry.
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 APL Apollo Tubes Ltd.
Shortening product life cycle
– it is one of the major threat that APL Apollo Tubes Ltd is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Consumer confidence and its impact on APL Apollo Tubes Ltd 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 Iron & Steel industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, APL Apollo Tubes Ltd 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 APL Apollo Tubes Ltd prominent markets.
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 APL Apollo Tubes Ltd in the Iron & Steel sector and impact the bottomline of the organization.
Weighted SWOT Analysis of APL Apollo Tubes Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at APL Apollo Tubes 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 APL Apollo Tubes 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 APL Apollo Tubes 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 APL Apollo Tubes 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 APL Apollo Tubes Ltd needs to make to build a sustainable competitive advantage.