Orient Electric (ONTE) SWOT Analysis / TOWS Matrix / MBA Resources
Appliance & Tool
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Orient Electric (India)
Based on various researches at Oak Spring University , Orient Electric is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, there is backlash against globalization, central banks are concerned over increasing inflation,
there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Orient Electric can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orient Electric, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orient Electric 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 Orient Electric can be done for the following purposes –
1. Strategic planning of Orient Electric
2. Improving business portfolio management of Orient Electric
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 Orient Electric
Strengths of Orient Electric | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orient Electric are -
Low bargaining power of suppliers
– Suppliers of Orient Electric in the Consumer Cyclical sector have low bargaining power. Orient Electric has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Orient Electric to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Orient Electric 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.
Diverse revenue streams
– Orient Electric is present in almost all the verticals within the Appliance & Tool industry. This has provided Orient Electric a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Orient Electric has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Appliance & Tool industry. Secondly the value chain collaborators of Orient Electric have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Orient Electric is one of the most innovative firm in Appliance & Tool sector.
Analytics focus
– Orient Electric 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.
Ability to lead change in Appliance & Tool
– Orient Electric is one of the leading players in the Appliance & Tool industry in India. Over the years it has not only transformed the business landscape in the Appliance & Tool industry in India but also across the existing markets. The ability to lead change has enabled Orient Electric in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Orient Electric 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.
Successful track record of launching new products
– Orient Electric has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Orient Electric 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.
Learning organization
- Orient Electric 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 Orient Electric is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Orient Electric emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Orient Electric 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.
High switching costs
– The high switching costs that Orient Electric 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 Orient Electric | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Orient Electric are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Orient Electric is slow explore the new channels of communication. These new channels of communication can help Orient Electric to provide better information regarding Appliance & Tool products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Appliance & Tool industry
– The stress on hiring functional specialists at Orient Electric 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.
Capital Spending Reduction
– Even during the low interest decade, Orient Electric 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.
Low market penetration in new markets
– Outside its home market of India, Orient Electric needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Orient Electric 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. Orient Electric should strive to include more intangible value offerings along with its core products and services.
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 Orient Electric supply chain. Even after few cautionary changes, Orient Electric is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Orient Electric vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Orient Electric has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Appliance & Tool industry over the last five years. Orient Electric 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.
Slow to strategic competitive environment developments
– As Orient Electric is one of the leading players in the Appliance & Tool industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Appliance & Tool industry in last five years.
High cash cycle compare to competitors
Orient Electric has a high cash cycle compare to other players in the Appliance & Tool 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 operating costs
– Compare to the competitors, Orient Electric 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 Orient Electric lucrative customers.
Lack of clear differentiation of Orient Electric products
– To increase the profitability and margins on the products, Orient Electric needs to provide more differentiated products than what it is currently offering in the marketplace.
Orient Electric Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Orient Electric are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Orient Electric can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Orient Electric 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.
Better consumer reach
– The expansion of the 5G network will help Orient Electric to increase its market reach. Orient Electric 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.
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 Orient Electric 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.
Learning at scale
– Online learning technologies has now opened space for Orient Electric 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 Orient Electric in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Appliance & Tool industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Orient Electric has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Appliance & Tool sector. This continuous investment in analytics has enabled Orient Electric to build a competitive advantage using analytics. The analytics driven competitive advantage can help Orient Electric to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Orient Electric in the Appliance & Tool industry. Now Orient Electric can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Orient Electric 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 Appliance & Tool industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Appliance & Tool industry, but it has also influenced the consumer preferences. Orient Electric can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Orient Electric can use these opportunities to build new business models that can help the communities that Orient Electric operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.
Buying journey improvements
– Orient Electric 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Orient Electric is facing challenges because of the dominance of functional experts in the organization. Orient Electric 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.
Threats Orient Electric External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Orient Electric are -
Shortening product life cycle
– it is one of the major threat that Orient Electric is facing in Appliance & Tool sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Orient Electric in Appliance & Tool industry. The Appliance & Tool 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.
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. Orient Electric 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.
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 Orient Electric.
Increasing wage structure of Orient Electric
– 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 Orient Electric.
Environmental challenges
– Orient Electric 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. Orient Electric can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.
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 Orient Electric business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Orient Electric has witnessed rapid integration of technology during Covid-19 in the Appliance & Tool industry. As one of the leading players in the industry, Orient Electric needs to keep up with the evolution of technology in the Appliance & Tool 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.
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. Orient Electric needs to understand the core reasons impacting the Appliance & Tool industry. This will help it in building a better workplace.
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 Orient Electric in the Appliance & Tool sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Orient Electric 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 Orient Electric prominent markets.
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.
Stagnating economy with rate increase
– Orient Electric 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 Appliance & Tool industry.
Weighted SWOT Analysis of Orient Electric Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Orient Electric 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 Orient Electric 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 Orient Electric 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 Orient Electric 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 Orient Electric needs to make to build a sustainable competitive advantage.
