SWOT Analysis / TOWS Matrix for Automotive Stampings Assemblies (India)
Based on various researches at Oak Spring University , Automotive Stampings Assemblies is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing household debt because of falling income levels,
technology disruption, wage bills are increasing, etc
Introduction to SWOT Analysis of Automotive Stampings Assemblies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Automotive Stampings Assemblies can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Automotive Stampings Assemblies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Automotive Stampings Assemblies 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 Automotive Stampings Assemblies can be done for the following purposes –
1. Strategic planning of Automotive Stampings Assemblies
2. Improving business portfolio management of Automotive Stampings Assemblies
3. Assessing feasibility of the new initiative in India
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Automotive Stampings Assemblies
Strengths of Automotive Stampings Assemblies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Automotive Stampings Assemblies are -
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Automotive Stampings Assemblies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Automotive Stampings Assemblies 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.
High switching costs
– The high switching costs that Automotive Stampings Assemblies 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.
Successful track record of launching new products
– Automotive Stampings Assemblies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Automotive Stampings Assemblies 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.
Learning organization
- Automotive Stampings Assemblies 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 Automotive Stampings Assemblies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Automotive Stampings Assemblies emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Misc. Fabricated Products industry
– Automotive Stampings Assemblies is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Automotive Stampings Assemblies in the Basic Materials sector have low bargaining power. Automotive Stampings Assemblies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Automotive Stampings Assemblies to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Automotive Stampings Assemblies has clearly differentiated products in the market place. This has enabled Automotive Stampings Assemblies to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Automotive Stampings Assemblies to invest into research and development (R&D) and innovation.
Innovation driven organization
– Automotive Stampings Assemblies is one of the most innovative firm in Misc. Fabricated Products sector.
Ability to lead change in Misc. Fabricated Products
– Automotive Stampings Assemblies is one of the leading players in the Misc. Fabricated Products industry in India. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in India but also across the existing markets. The ability to lead change has enabled Automotive Stampings Assemblies 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 Automotive Stampings Assemblies 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.
Highly skilled collaborators
– Automotive Stampings Assemblies has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Automotive Stampings Assemblies have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Automotive Stampings Assemblies
– The covid-19 pandemic has put organizational resilience at the centre of everthing Automotive Stampings Assemblies does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Automotive Stampings Assemblies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Automotive Stampings Assemblies are -
Slow to strategic competitive environment developments
– As Automotive Stampings Assemblies is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
High bargaining power of channel partners in Misc. Fabricated Products industry
– because of the regulatory requirements in India, Automotive Stampings Assemblies 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 Misc. Fabricated Products industry.
No frontier risks strategy
– From the 10K / annual statement of Automotive Stampings Assemblies, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
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 Automotive Stampings Assemblies supply chain. Even after few cautionary changes, Automotive Stampings Assemblies is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Automotive Stampings Assemblies vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Automotive Stampings Assemblies 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.
Ability to respond to the competition
– As the decision making is very deliberative at Automotive Stampings Assemblies, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. Automotive Stampings Assemblies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Automotive Stampings Assemblies is just above the Misc. Fabricated Products 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.
High cash cycle compare to competitors
Automotive Stampings Assemblies has a high cash cycle compare to other players in the Misc. Fabricated Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, Automotive Stampings Assemblies has high operating costs in the Misc. Fabricated Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Automotive Stampings Assemblies lucrative customers.
Aligning sales with marketing
– From the outside it seems that Automotive Stampings Assemblies needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Automotive Stampings Assemblies can leverage the sales team experience to cultivate customer relationships as Automotive Stampings Assemblies is planning to shift buying processes online.
Employees’ less understanding of Automotive Stampings Assemblies strategy
– From the outside it seems that the employees of Automotive Stampings Assemblies don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Automotive Stampings Assemblies Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Automotive Stampings Assemblies are -
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 Automotive Stampings Assemblies 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.
Building a culture of innovation
– managers at Automotive Stampings Assemblies 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 Misc. Fabricated Products industry.
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Automotive Stampings Assemblies in the Misc. Fabricated Products industry. Now Automotive Stampings Assemblies can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Automotive Stampings Assemblies in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Automotive Stampings Assemblies can develop new processes and procedures in Misc. Fabricated Products 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.
Loyalty marketing
– Automotive Stampings Assemblies 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Automotive Stampings Assemblies is facing challenges because of the dominance of functional experts in the organization. Automotive Stampings Assemblies can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Automotive Stampings Assemblies can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Automotive Stampings Assemblies 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 Automotive Stampings Assemblies to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Automotive Stampings Assemblies 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.
Leveraging digital technologies
– Automotive Stampings Assemblies 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 Automotive Stampings Assemblies 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Automotive Stampings Assemblies can use these opportunities to build new business models that can help the communities that Automotive Stampings Assemblies operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Threats Automotive Stampings Assemblies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Automotive Stampings Assemblies are -
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 Automotive Stampings Assemblies in the Misc. Fabricated Products sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Automotive Stampings Assemblies 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 Misc. Fabricated Products 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 Automotive Stampings Assemblies.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Automotive Stampings Assemblies 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 Automotive Stampings Assemblies prominent markets.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Automotive Stampings Assemblies can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Automotive Stampings Assemblies in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
Technology acceleration in Forth Industrial Revolution
– Automotive Stampings Assemblies has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Automotive Stampings Assemblies needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Automotive Stampings Assemblies may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Fabricated Products sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Automotive Stampings Assemblies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
Consumer confidence and its impact on Automotive Stampings Assemblies demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Misc. Fabricated Products industry and other sectors.
High dependence on third party suppliers
– Automotive Stampings Assemblies 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 Automotive Stampings Assemblies Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Automotive Stampings Assemblies 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 Automotive Stampings Assemblies 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 Automotive Stampings Assemblies 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 Automotive Stampings Assemblies 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 Automotive Stampings Assemblies needs to make to build a sustainable competitive advantage.