ESS DEE Aluminum (ESDA) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for ESS DEE Aluminum (India)
Based on various researches at Oak Spring University , ESS DEE Aluminum is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing energy prices, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ESS DEE Aluminum can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ESS DEE Aluminum, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ESS DEE Aluminum 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 ESS DEE Aluminum can be done for the following purposes –
1. Strategic planning of ESS DEE Aluminum
2. Improving business portfolio management of ESS DEE Aluminum
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 ESS DEE Aluminum
Strengths of ESS DEE Aluminum | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ESS DEE Aluminum are -
Operational resilience
– The operational resilience strategy of ESS DEE Aluminum comprises – understanding the underlying the factors in the Misc. Fabricated Products 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.
Ability to recruit top talent
– ESS DEE Aluminum is one of the leading players in the Misc. Fabricated Products 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.
Low bargaining power of suppliers
– Suppliers of ESS DEE Aluminum in the Basic Materials sector have low bargaining power. ESS DEE Aluminum has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ESS DEE Aluminum to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Misc. Fabricated Products industry
– ESS DEE Aluminum is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of ESS DEE Aluminum in Misc. Fabricated Products 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 ESS DEE Aluminum 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.
Ability to lead change in Misc. Fabricated Products
– ESS DEE Aluminum 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 ESS DEE Aluminum in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– ESS DEE Aluminum has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ESS DEE Aluminum to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– ESS DEE Aluminum is present in almost all the verticals within the Misc. Fabricated Products industry. This has provided ESS DEE Aluminum 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.
Innovation driven organization
– ESS DEE Aluminum is one of the most innovative firm in Misc. Fabricated Products sector.
Effective Research and Development (R&D)
– ESS DEE Aluminum has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ESS DEE Aluminum staying ahead in the Misc. Fabricated Products 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 Misc. Fabricated Products industry
– ESS DEE Aluminum has clearly differentiated products in the market place. This has enabled ESS DEE Aluminum to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped ESS DEE Aluminum to invest into research and development (R&D) and innovation.
Weaknesses of ESS DEE Aluminum | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ESS DEE Aluminum are -
Low market penetration in new markets
– Outside its home market of India, ESS DEE Aluminum needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on ESS DEE Aluminum ‘s star products
– The top 2 products and services of ESS DEE Aluminum still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though ESS DEE Aluminum has relatively successful track record of launching new products.
Products dominated business model
– Even though ESS DEE Aluminum has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. ESS DEE Aluminum should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As ESS DEE Aluminum 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.
No frontier risks strategy
– From the 10K / annual statement of ESS DEE Aluminum, 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.
Ability to respond to the competition
– As the decision making is very deliberative at ESS DEE Aluminum, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. ESS DEE Aluminum has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of ESS DEE Aluminum is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but ESS DEE Aluminum needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ESS DEE Aluminum to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that ESS DEE Aluminum 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 ESS DEE Aluminum can leverage the sales team experience to cultivate customer relationships as ESS DEE Aluminum is planning to shift buying processes online.
Need for greater diversity
– ESS DEE Aluminum 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, ESS DEE Aluminum 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.
Employees’ less understanding of ESS DEE Aluminum strategy
– From the outside it seems that the employees of ESS DEE Aluminum 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.
ESS DEE Aluminum Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ESS DEE Aluminum are -
Creating value in data economy
– The success of analytics program of ESS DEE Aluminum has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help ESS DEE Aluminum to build a more holistic ecosystem for ESS DEE Aluminum products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, ESS DEE Aluminum 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 ESS DEE Aluminum to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 ESS DEE Aluminum in the Misc. Fabricated Products industry. Now ESS DEE Aluminum can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– ESS DEE Aluminum 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.
Building a culture of innovation
– managers at ESS DEE Aluminum 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ESS DEE Aluminum can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ESS DEE Aluminum can use these opportunities to build new business models that can help the communities that ESS DEE Aluminum operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, ESS DEE Aluminum 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.
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. ESS DEE Aluminum can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– ESS DEE Aluminum has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled ESS DEE Aluminum to build a competitive advantage using analytics. The analytics driven competitive advantage can help ESS DEE Aluminum to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ESS DEE Aluminum 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. ESS DEE Aluminum 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 ESS DEE Aluminum 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.
Developing new processes and practices
– ESS DEE Aluminum 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.
Threats ESS DEE Aluminum External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ESS DEE Aluminum are -
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 ESS DEE Aluminum in the Misc. Fabricated Products sector and impact the bottomline of the organization.
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. ESS DEE Aluminum 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ESS DEE Aluminum 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.
Stagnating economy with rate increase
– ESS DEE Aluminum 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.
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. ESS DEE Aluminum needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– ESS DEE Aluminum has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, ESS DEE Aluminum 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ESS DEE Aluminum 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 ESS DEE Aluminum 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 ESS DEE Aluminum business can come under increasing regulations regarding data privacy, data security, etc.
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 ESS DEE Aluminum.
Regulatory challenges
– ESS DEE Aluminum 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 Misc. Fabricated Products industry regulations.
Shortening product life cycle
– it is one of the major threat that ESS DEE Aluminum is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of ESS DEE Aluminum Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ESS DEE Aluminum 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 ESS DEE Aluminum 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 ESS DEE Aluminum 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 ESS DEE Aluminum 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 ESS DEE Aluminum needs to make to build a sustainable competitive advantage.