SWOT Analysis / TOWS Matrix for Nitin Spinners Ltd (India)
Based on various researches at Oak Spring University , Nitin Spinners Ltd is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Nitin Spinners Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nitin Spinners Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nitin Spinners Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nitin Spinners 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 Nitin Spinners Ltd can be done for the following purposes –
1. Strategic planning of Nitin Spinners Ltd
2. Improving business portfolio management of Nitin Spinners Ltd
3. Assessing feasibility of the new initiative in India
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nitin Spinners Ltd
Strengths of Nitin Spinners Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nitin Spinners Ltd are -
Analytics focus
– Nitin Spinners 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 Textiles - Non Apparel industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Textiles - Non Apparel
– Nitin Spinners Ltd is one of the leading players in the Textiles - Non Apparel industry in India. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in India but also across the existing markets. The ability to lead change has enabled Nitin Spinners Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Nitin Spinners Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of Nitin Spinners Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Nitin Spinners 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 Nitin Spinners Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nitin Spinners Ltd emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Nitin Spinners Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nitin Spinners 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.
Organizational Resilience of Nitin Spinners Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Nitin Spinners Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Textiles - Non Apparel industry
– Nitin Spinners 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
– Nitin Spinners Ltd is one of the leading players in the Textiles - Non Apparel 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.
Sustainable margins compare to other players in Textiles - Non Apparel industry
– Nitin Spinners Ltd has clearly differentiated products in the market place. This has enabled Nitin Spinners Ltd to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Nitin Spinners Ltd to invest into research and development (R&D) and innovation.
Innovation driven organization
– Nitin Spinners Ltd is one of the most innovative firm in Textiles - Non Apparel sector.
Low bargaining power of suppliers
– Suppliers of Nitin Spinners Ltd in the Consumer Cyclical sector have low bargaining power. Nitin Spinners Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nitin Spinners Ltd to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Nitin Spinners 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.
Weaknesses of Nitin Spinners Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nitin Spinners Ltd are -
Ability to respond to the competition
– As the decision making is very deliberative at Nitin Spinners Ltd, in the dynamic environment of Textiles - Non Apparel industry it has struggled to respond to the nimble upstart competition. Nitin Spinners Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Nitin Spinners 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 Textiles - Non Apparel industry over the last five years. Nitin Spinners 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.
Workers concerns about automation
– As automation is fast increasing in the Textiles - Non Apparel industry, Nitin Spinners 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.
Interest costs
– Compare to the competition, Nitin Spinners 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 Nitin Spinners Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Textiles - Non Apparel industry have deep experience in developing customer relationships. Marketing department at Nitin Spinners Ltd can leverage the sales team experience to cultivate customer relationships as Nitin Spinners Ltd is planning to shift buying processes online.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at Nitin Spinners 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.
High dependence on Nitin Spinners Ltd ‘s star products
– The top 2 products and services of Nitin Spinners Ltd still accounts for major business revenue. This dependence on star products in Textiles - Non Apparel industry has resulted into insufficient focus on developing new products, even though Nitin Spinners Ltd has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Nitin Spinners Ltd is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Nitin Spinners Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nitin Spinners Ltd to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Nitin Spinners Ltd is just above the Textiles - Non Apparel 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.
Lack of clear differentiation of Nitin Spinners Ltd products
– To increase the profitability and margins on the products, Nitin Spinners Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Nitin Spinners Ltd has high operating costs in the Textiles - Non Apparel industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nitin Spinners Ltd lucrative customers.
Nitin Spinners Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nitin Spinners Ltd are -
Buying journey improvements
– Nitin Spinners Ltd can improve the customer journey of consumers in the Textiles - Non Apparel 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nitin Spinners 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 Textiles - Non Apparel industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nitin Spinners Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Nitin Spinners Ltd has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Nitin Spinners Ltd to build a more holistic ecosystem for Nitin Spinners Ltd products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nitin Spinners Ltd is facing challenges because of the dominance of functional experts in the organization. Nitin Spinners Ltd can utilize new technology in the field of Textiles - Non Apparel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Nitin Spinners Ltd can develop new processes and procedures in Textiles - Non Apparel 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nitin Spinners 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 Nitin Spinners Ltd to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Nitin Spinners Ltd 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Textiles - Non Apparel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nitin Spinners 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. Nitin Spinners 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 Nitin Spinners 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Nitin Spinners 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 Nitin Spinners 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nitin Spinners 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.
Use of Bitcoin and other crypto currencies for transactions in Textiles - Non Apparel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nitin Spinners Ltd in the Textiles - Non Apparel industry. Now Nitin Spinners Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Nitin Spinners Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nitin Spinners Ltd are -
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.
Easy access to finance
– Easy access to finance in Textiles - Non Apparel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nitin Spinners Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Nitin Spinners Ltd is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Nitin Spinners Ltd has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, Nitin Spinners Ltd needs to keep up with the evolution of technology in the Textiles - Non Apparel 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents Nitin Spinners Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.
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.
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 Nitin Spinners Ltd in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Environmental challenges
– Nitin Spinners 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. Nitin Spinners Ltd can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
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. Nitin Spinners Ltd needs to understand the core reasons impacting the Textiles - Non Apparel industry. This will help it in building a better workplace.
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 Nitin Spinners Ltd.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nitin Spinners 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 Nitin Spinners Ltd prominent markets.
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 Nitin Spinners Ltd business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Nitin Spinners Ltd 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.
Weighted SWOT Analysis of Nitin Spinners Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nitin Spinners 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 Nitin Spinners 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 Nitin Spinners 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 Nitin Spinners 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 Nitin Spinners Ltd needs to make to build a sustainable competitive advantage.