Action Construction Equipment (ACEL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Action Construction Equipment (India)

Based on various researches at Oak Spring University , Action Construction Equipment is operating in a macro-environment that has been destablized by – wage bills are increasing, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, etc

---

---

---

---

Introduction to SWOT Analysis of Action Construction Equipment

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Action Construction Equipment can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Action Construction Equipment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Action Construction Equipment 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 Action Construction Equipment can be done for the following purposes –
1. Strategic planning of Action Construction Equipment
2. Improving business portfolio management of Action Construction Equipment
3. Assessing feasibility of the new initiative in India
4. Making a Constr. & Agric. Machinery sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Action Construction Equipment

---

Strengths of Action Construction Equipment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Action Construction Equipment are -

Learning organization

- Action Construction Equipment 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 Action Construction Equipment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Action Construction Equipment emphasize – knowledge, initiative, and innovation.

Sustainable margins compare to other players in Constr. & Agric. Machinery industry

– Action Construction Equipment has clearly differentiated products in the market place. This has enabled Action Construction Equipment to fetch slight price premium compare to the competitors in the Constr. & Agric. Machinery industry. The sustainable margins have also helped Action Construction Equipment to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of Action Construction Equipment in Constr. & Agric. Machinery industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

– Suppliers of Action Construction Equipment in the Capital Goods sector have low bargaining power. Action Construction Equipment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Action Construction Equipment to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Action Construction Equipment is present in almost all the verticals within the Constr. & Agric. Machinery industry. This has provided Action Construction Equipment 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.

High brand equity

– Action Construction Equipment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Action Construction Equipment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

High switching costs

– The high switching costs that Action Construction Equipment 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.

Highly skilled collaborators

– Action Construction Equipment has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Constr. & Agric. Machinery industry. Secondly the value chain collaborators of Action Construction Equipment have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Action Construction Equipment has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Action Construction Equipment staying ahead in the Constr. & Agric. Machinery industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Operational resilience

– The operational resilience strategy of Action Construction Equipment comprises – understanding the underlying the factors in the Constr. & Agric. Machinery 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 Constr. & Agric. Machinery industry

- digital transformation varies from industry to industry. For Action Construction Equipment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Action Construction Equipment 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.

Innovation driven organization

– Action Construction Equipment is one of the most innovative firm in Constr. & Agric. Machinery sector.

---

---

Weaknesses of Action Construction Equipment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Action Construction Equipment are -

Compensation and incentives

– The revenue per employee of Action Construction Equipment is just above the Constr. & Agric. Machinery 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.

Need for greater diversity

– Action Construction Equipment 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.

Capital Spending Reduction

– Even during the low interest decade, Action Construction Equipment 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 Constr. & Agric. Machinery industry using digital technology.

High bargaining power of channel partners in Constr. & Agric. Machinery industry

– because of the regulatory requirements in India, Action Construction Equipment 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 Constr. & Agric. Machinery industry.

Increasing silos among functional specialists

– The organizational structure of Action Construction Equipment is dominated by functional specialists. It is not different from other players in the Constr. & Agric. Machinery industry, but Action Construction Equipment needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Action Construction Equipment to focus more on services in the Constr. & Agric. Machinery industry rather than just following the product oriented approach.

No frontier risks strategy

– From the 10K / annual statement of Action Construction Equipment, it seems that company is thinking out the frontier risks that can impact Constr. & Agric. Machinery 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.

Ability to respond to the competition

– As the decision making is very deliberative at Action Construction Equipment, in the dynamic environment of Constr. & Agric. Machinery industry it has struggled to respond to the nimble upstart competition. Action Construction Equipment 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

Action Construction Equipment has a high cash cycle compare to other players in the Constr. & Agric. Machinery industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Low market penetration in new markets

– Outside its home market of India, Action Construction Equipment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though Action Construction Equipment has some of the most successful models in the Constr. & Agric. Machinery industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Action Construction Equipment 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 Action Construction Equipment supply chain. Even after few cautionary changes, Action Construction Equipment is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Action Construction Equipment vulnerable to further global disruptions in South East Asia.

---

Action Construction Equipment Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Action Construction Equipment are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Constr. & Agric. Machinery industry, but it has also influenced the consumer preferences. Action Construction Equipment can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for Action Construction Equipment 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Action Construction Equipment is facing challenges because of the dominance of functional experts in the organization. Action Construction Equipment can utilize new technology in the field of Constr. & Agric. Machinery 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 Action Construction Equipment in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Constr. & Agric. Machinery industry, and it will provide faster access to the consumers.

Use of Bitcoin and other crypto currencies for transactions in Constr. & Agric. Machinery industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Action Construction Equipment in the Constr. & Agric. Machinery industry. Now Action Construction Equipment 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, Action Construction Equipment can use these opportunities to build new business models that can help the communities that Action Construction Equipment operates in. Secondly it can use opportunities from government spending in Constr. & Agric. Machinery sector.

Low interest rates

– Even though inflation is raising its head in most developed economies, Action Construction Equipment 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.

Loyalty marketing

– Action Construction Equipment 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.

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. Action Construction Equipment can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at Action Construction Equipment 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 Constr. & Agric. Machinery industry.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Action Construction Equipment 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 Action Construction Equipment to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of Action Construction Equipment has opened avenues for new revenue streams for the organization in Constr. & Agric. Machinery industry. This can help Action Construction Equipment to build a more holistic ecosystem for Action Construction Equipment products in the Constr. & Agric. Machinery industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Action Construction Equipment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

---

Threats Action Construction Equipment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Action Construction Equipment are -

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. Action Construction Equipment 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.

High dependence on third party suppliers

– Action Construction Equipment 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.

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. Action Construction Equipment needs to understand the core reasons impacting the Constr. & Agric. Machinery industry. This will help it in building a better workplace.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Action Construction Equipment in Constr. & Agric. Machinery industry. The Constr. & Agric. Machinery 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.

Environmental challenges

– Action Construction Equipment 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. Action Construction Equipment can take advantage of this fund but it will also bring new competitors in the Constr. & Agric. Machinery 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 Action Construction Equipment business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– Action Construction Equipment 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 Constr. & Agric. Machinery industry.

Increasing wage structure of Action Construction Equipment

– 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 Action Construction Equipment.

Regulatory challenges

– Action Construction Equipment 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 Constr. & Agric. Machinery industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Action Construction Equipment may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Constr. & Agric. Machinery sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Action Construction Equipment 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 Action Construction Equipment prominent markets.

---

Weighted SWOT Analysis of Action Construction Equipment Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Action Construction Equipment 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 Action Construction Equipment 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 Action Construction Equipment 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 Action Construction Equipment 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 Action Construction Equipment needs to make to build a sustainable competitive advantage.

--- ---