MSP Steel Power Ltd (MSPO) SWOT Analysis / TOWS Matrix / MBA Resources
Iron & Steel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for MSP Steel Power Ltd (India)
Based on various researches at Oak Spring University , MSP Steel Power Ltd is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, there is backlash against globalization, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, increasing energy prices, etc
Introduction to SWOT Analysis of MSP Steel Power Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MSP Steel Power Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MSP Steel Power Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MSP Steel Power 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 MSP Steel Power Ltd can be done for the following purposes –
1. Strategic planning of MSP Steel Power Ltd
2. Improving business portfolio management of MSP Steel Power Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Iron & Steel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MSP Steel Power Ltd
Strengths of MSP Steel Power Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MSP Steel Power Ltd are -
High brand equity
– MSP Steel Power Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled MSP Steel Power Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– MSP Steel Power Ltd is one of the leading players in the Iron & Steel 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 Iron & Steel
– MSP Steel Power Ltd is one of the leading players in the Iron & Steel industry in India. Over the years it has not only transformed the business landscape in the Iron & Steel industry in India but also across the existing markets. The ability to lead change has enabled MSP Steel Power Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the MSP Steel Power 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.
Analytics focus
– MSP Steel Power Ltd is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Iron & Steel industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Learning organization
- MSP Steel Power 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 MSP Steel Power Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at MSP Steel Power Ltd emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– MSP Steel Power Ltd is present in almost all the verticals within the Iron & Steel industry. This has provided MSP Steel Power 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.
High switching costs
– The high switching costs that MSP Steel Power Ltd has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– MSP Steel Power Ltd is one of the most innovative firm in Iron & Steel sector.
Digital Transformation in Iron & Steel industry
- digital transformation varies from industry to industry. For MSP Steel Power Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. MSP Steel Power Ltd has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Sustainable margins compare to other players in Iron & Steel industry
– MSP Steel Power Ltd has clearly differentiated products in the market place. This has enabled MSP Steel Power Ltd to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped MSP Steel Power Ltd to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– MSP Steel Power Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. MSP Steel Power Ltd has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses of MSP Steel Power Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MSP Steel Power Ltd are -
Need for greater diversity
– MSP Steel Power 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.
Interest costs
– Compare to the competition, MSP Steel Power 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.
Aligning sales with marketing
– From the outside it seems that MSP Steel Power Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Iron & Steel industry have deep experience in developing customer relationships. Marketing department at MSP Steel Power Ltd can leverage the sales team experience to cultivate customer relationships as MSP Steel Power Ltd is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of MSP Steel Power Ltd is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but MSP Steel Power Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help MSP Steel Power Ltd to focus more on services in the Iron & Steel industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, MSP Steel Power Ltd has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Iron & Steel industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MSP Steel Power Ltd is slow explore the new channels of communication. These new channels of communication can help MSP Steel Power Ltd to provide better information regarding Iron & Steel products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Iron & Steel industry
– The stress on hiring functional specialists at MSP Steel Power Ltd has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, MSP Steel Power Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Iron & Steel industry over the last five years. MSP Steel Power 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.
Lack of clear differentiation of MSP Steel Power Ltd products
– To increase the profitability and margins on the products, MSP Steel Power Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on MSP Steel Power Ltd ‘s star products
– The top 2 products and services of MSP Steel Power Ltd still accounts for major business revenue. This dependence on star products in Iron & Steel industry has resulted into insufficient focus on developing new products, even though MSP Steel Power Ltd has relatively successful track record of launching new products.
High bargaining power of channel partners in Iron & Steel industry
– because of the regulatory requirements in India, MSP Steel Power Ltd is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Iron & Steel industry.
MSP Steel Power Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MSP Steel Power Ltd are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for MSP Steel Power Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Iron & Steel industry, and it will provide faster access to the consumers.
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 MSP Steel Power 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.
Creating value in data economy
– The success of analytics program of MSP Steel Power Ltd has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help MSP Steel Power Ltd to build a more holistic ecosystem for MSP Steel Power Ltd products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, MSP Steel Power Ltd can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– MSP Steel Power Ltd can use the latest technology developments to improve its manufacturing and designing process in Iron & Steel 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. MSP Steel Power 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, MSP Steel Power Ltd is facing challenges because of the dominance of functional experts in the organization. MSP Steel Power Ltd can utilize new technology in the field of Iron & Steel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– MSP Steel Power Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Iron & Steel sector. This continuous investment in analytics has enabled MSP Steel Power Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help MSP Steel Power Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, MSP Steel Power Ltd can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help MSP Steel Power Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– MSP Steel Power 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.
Learning at scale
– Online learning technologies has now opened space for MSP Steel Power 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for MSP Steel Power Ltd 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 MSP Steel Power Ltd to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects MSP Steel Power Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats MSP Steel Power Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MSP Steel Power Ltd are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. MSP Steel Power Ltd needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.
Environmental challenges
– MSP Steel Power 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. MSP Steel Power Ltd can take advantage of this fund but it will also bring new competitors in the Iron & Steel industry.
Shortening product life cycle
– it is one of the major threat that MSP Steel Power Ltd is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, MSP Steel Power Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Iron & Steel sector.
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 MSP Steel Power Ltd in the Iron & Steel sector and impact the bottomline of the organization.
Increasing wage structure of MSP Steel Power 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 MSP Steel Power Ltd.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for MSP Steel Power Ltd in Iron & Steel industry. The Iron & Steel 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.
Easy access to finance
– Easy access to finance in Iron & Steel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. MSP Steel Power Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– MSP Steel Power Ltd has witnessed rapid integration of technology during Covid-19 in the Iron & Steel industry. As one of the leading players in the industry, MSP Steel Power Ltd needs to keep up with the evolution of technology in the Iron & Steel 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.
Regulatory challenges
– MSP Steel Power Ltd 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 Iron & Steel industry regulations.
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.
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 MSP Steel Power Ltd.
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 MSP Steel Power Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of MSP Steel Power Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MSP Steel Power 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 MSP Steel Power 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 MSP Steel Power 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 MSP Steel Power 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 MSP Steel Power Ltd needs to make to build a sustainable competitive advantage.