Based on various researches at Oak Spring University , Steel Strips Wheels Ltd is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, technology disruption,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Steel Strips Wheels Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Steel Strips Wheels Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Steel Strips Wheels Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Steel Strips Wheels 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 Steel Strips Wheels Ltd can be done for the following purposes –
1. Strategic planning of Steel Strips Wheels Ltd
2. Improving business portfolio management of Steel Strips Wheels Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Steel Strips Wheels Ltd
Strengths of Steel Strips Wheels Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Steel Strips Wheels Ltd are -
Learning organization
- Steel Strips Wheels Ltd 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 Steel Strips Wheels Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Steel Strips Wheels Ltd emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Steel Strips Wheels Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Steel Strips Wheels Ltd staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Steel Strips Wheels Ltd in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Steel Strips Wheels Ltd is one of the most innovative firm in Auto & Truck Parts sector.
Cross disciplinary teams
– Horizontal connected teams at the Steel Strips Wheels 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.
Operational resilience
– The operational resilience strategy of Steel Strips Wheels Ltd comprises – understanding the underlying the factors in the Auto & Truck Parts 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
– Steel Strips Wheels Ltd is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Steel Strips Wheels Ltd 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.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Steel Strips Wheels Ltd has clearly differentiated products in the market place. This has enabled Steel Strips Wheels Ltd to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Steel Strips Wheels Ltd to invest into research and development (R&D) and innovation.
Training and development
– Steel Strips Wheels 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.
Strong track record of project management in the Auto & Truck Parts industry
– Steel Strips Wheels 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.
Ability to recruit top talent
– Steel Strips Wheels Ltd is one of the leading players in the Auto & Truck Parts 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.
Highly skilled collaborators
– Steel Strips Wheels Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Parts industry. Secondly the value chain collaborators of Steel Strips Wheels Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Steel Strips Wheels Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Steel Strips Wheels Ltd are -
Increasing silos among functional specialists
– The organizational structure of Steel Strips Wheels Ltd is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Steel Strips Wheels Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Steel Strips Wheels Ltd to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Steel Strips Wheels 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 Auto & Truck Parts industry over the last five years. Steel Strips Wheels 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 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 Steel Strips Wheels Ltd supply chain. Even after few cautionary changes, Steel Strips Wheels Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Steel Strips Wheels Ltd vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Steel Strips Wheels 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.
Employees’ less understanding of Steel Strips Wheels Ltd strategy
– From the outside it seems that the employees of Steel Strips Wheels 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.
Need for greater diversity
– Steel Strips Wheels Ltd has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Steel Strips Wheels Ltd is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Auto & Truck Parts industry, Steel Strips Wheels 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.
Lack of clear differentiation of Steel Strips Wheels Ltd products
– To increase the profitability and margins on the products, Steel Strips Wheels Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Steel Strips Wheels Ltd, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Steel Strips Wheels Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Steel Strips Wheels Ltd, it seems that company is thinking out the frontier risks that can impact Auto & Truck Parts industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Steel Strips Wheels Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Steel Strips Wheels Ltd are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Steel Strips Wheels Ltd 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, Steel Strips Wheels Ltd is facing challenges because of the dominance of functional experts in the organization. Steel Strips Wheels Ltd can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Steel Strips Wheels 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 Auto & Truck Parts industry, and it will provide faster access to the consumers.
Manufacturing automation
– Steel Strips Wheels Ltd can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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.
Using analytics as competitive advantage
– Steel Strips Wheels Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Steel Strips Wheels Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Steel Strips Wheels Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Steel Strips Wheels Ltd has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Steel Strips Wheels Ltd to build a more holistic ecosystem for Steel Strips Wheels Ltd products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Steel Strips Wheels 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Parts industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Steel Strips Wheels 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. Steel Strips Wheels 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.
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 Steel Strips Wheels 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.
Buying journey improvements
– Steel Strips Wheels Ltd can improve the customer journey of consumers in the Auto & Truck Parts 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.
Leveraging digital technologies
– Steel Strips Wheels 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Steel Strips Wheels Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Steel Strips Wheels Ltd can develop new processes and procedures in Auto & Truck Parts 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.
Threats Steel Strips Wheels Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Steel Strips Wheels Ltd are -
Increasing wage structure of Steel Strips Wheels 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 Steel Strips Wheels Ltd.
Stagnating economy with rate increase
– Steel Strips Wheels 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 Auto & Truck Parts industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Steel Strips Wheels 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 Auto & Truck Parts sector.
Environmental challenges
– Steel Strips Wheels 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. Steel Strips Wheels Ltd can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Technology acceleration in Forth Industrial Revolution
– Steel Strips Wheels Ltd has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Steel Strips Wheels Ltd needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Steel Strips Wheels Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Steel Strips Wheels Ltd needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Steel Strips Wheels Ltd in Auto & Truck Parts industry. The Auto & Truck Parts 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.
Shortening product life cycle
– it is one of the major threat that Steel Strips Wheels Ltd is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Steel Strips Wheels Ltd in the Auto & Truck Parts sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Steel Strips Wheels Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
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 Steel Strips Wheels Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Steel Strips Wheels 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 Steel Strips Wheels Ltd prominent markets.
Weighted SWOT Analysis of Steel Strips Wheels Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Steel Strips Wheels 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 Steel Strips Wheels 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 Steel Strips Wheels 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 Steel Strips Wheels 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 Steel Strips Wheels Ltd needs to make to build a sustainable competitive advantage.