SWOT Analysis / TOWS Matrix for Deccan Cements (India)
Based on various researches at Oak Spring University , Deccan Cements is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, technology disruption,
there is increasing trade war between United States & China, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Deccan Cements can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Deccan Cements, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Deccan Cements 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 Deccan Cements can be done for the following purposes –
1. Strategic planning of Deccan Cements
2. Improving business portfolio management of Deccan Cements
3. Assessing feasibility of the new initiative in India
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Deccan Cements
Strengths of Deccan Cements | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Deccan Cements are -
Operational resilience
– The operational resilience strategy of Deccan Cements comprises – understanding the underlying the factors in the Construction - Raw Materials 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.
Superior customer experience
– The customer experience strategy of Deccan Cements in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Deccan Cements 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.
High brand equity
– Deccan Cements has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Deccan Cements to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Deccan Cements is one of the leading players in the Construction - Raw Materials 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.
Ability to lead change in Construction - Raw Materials
– Deccan Cements is one of the leading players in the Construction - Raw Materials industry in India. Over the years it has not only transformed the business landscape in the Construction - Raw Materials industry in India but also across the existing markets. The ability to lead change has enabled Deccan Cements in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Deccan Cements is present in almost all the verticals within the Construction - Raw Materials industry. This has provided Deccan Cements 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.
Digital Transformation in Construction - Raw Materials industry
- digital transformation varies from industry to industry. For Deccan Cements digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Deccan Cements 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.
Learning organization
- Deccan Cements 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 Deccan Cements is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Deccan Cements emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Deccan Cements has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Deccan Cements staying ahead in the Construction - Raw Materials industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Deccan Cements has clearly differentiated products in the market place. This has enabled Deccan Cements to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Deccan Cements to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Deccan Cements in the Capital Goods sector have low bargaining power. Deccan Cements has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Deccan Cements to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Deccan Cements | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Deccan Cements are -
Workers concerns about automation
– As automation is fast increasing in the Construction - Raw Materials industry, Deccan Cements 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.
Products dominated business model
– Even though Deccan Cements has some of the most successful models in the Construction - Raw Materials industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Deccan Cements should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of India, Deccan Cements needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Deccan Cements products
– To increase the profitability and margins on the products, Deccan Cements needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Deccan Cements ‘s star products
– The top 2 products and services of Deccan Cements still accounts for major business revenue. This dependence on star products in Construction - Raw Materials industry has resulted into insufficient focus on developing new products, even though Deccan Cements has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Deccan Cements 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 Construction - Raw Materials industry using digital technology.
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 Deccan Cements supply chain. Even after few cautionary changes, Deccan Cements is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Deccan Cements vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Deccan Cements is slow explore the new channels of communication. These new channels of communication can help Deccan Cements to provide better information regarding Construction - Raw Materials products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Deccan Cements is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Deccan Cements needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Deccan Cements to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
High bargaining power of channel partners in Construction - Raw Materials industry
– because of the regulatory requirements in India, Deccan Cements 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 Construction - Raw Materials industry.
High cash cycle compare to competitors
Deccan Cements has a high cash cycle compare to other players in the Construction - Raw Materials industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Deccan Cements Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Deccan Cements are -
Use of Bitcoin and other crypto currencies for transactions in Construction - Raw Materials industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Deccan Cements in the Construction - Raw Materials industry. Now Deccan Cements can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Deccan Cements 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.
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. Deccan Cements can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Deccan Cements has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction - Raw Materials sector. This continuous investment in analytics has enabled Deccan Cements to build a competitive advantage using analytics. The analytics driven competitive advantage can help Deccan Cements to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Deccan Cements 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.
Building a culture of innovation
– managers at Deccan Cements 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 Construction - Raw Materials industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction - Raw Materials industry, but it has also influenced the consumer preferences. Deccan Cements can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Deccan Cements 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.
Creating value in data economy
– The success of analytics program of Deccan Cements has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Deccan Cements to build a more holistic ecosystem for Deccan Cements products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Deccan Cements in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction - Raw Materials industry, and it will provide faster access to the consumers.
Manufacturing automation
– Deccan Cements can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.
Buying journey improvements
– Deccan Cements can improve the customer journey of consumers in the Construction - Raw Materials 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Deccan Cements to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Deccan Cements to hire the very best people irrespective of their geographical location.
Threats Deccan Cements External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Deccan Cements are -
Stagnating economy with rate increase
– Deccan Cements 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 Construction - Raw Materials 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 Deccan Cements.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Deccan Cements may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Deccan Cements in Construction - Raw Materials industry. The Construction - Raw Materials 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.
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 Deccan Cements in the Construction - Raw Materials sector and impact the bottomline of the organization.
Increasing wage structure of Deccan Cements
– 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 Deccan Cements.
Environmental challenges
– Deccan Cements 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. Deccan Cements can take advantage of this fund but it will also bring new competitors in the Construction - Raw Materials industry.
Shortening product life cycle
– it is one of the major threat that Deccan Cements is facing in Construction - Raw Materials sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Deccan Cements with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
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. Deccan Cements 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Deccan Cements 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 Deccan Cements prominent markets.
High dependence on third party suppliers
– Deccan Cements high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Deccan Cements has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Deccan Cements needs to keep up with the evolution of technology in the Construction - Raw Materials 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.
Weighted SWOT Analysis of Deccan Cements Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Deccan Cements 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 Deccan Cements 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 Deccan Cements 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 Deccan Cements 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 Deccan Cements needs to make to build a sustainable competitive advantage.