SWOT Analysis / TOWS Matrix for Innovative Tyres Tubes (India)
Based on various researches at Oak Spring University , Innovative Tyres Tubes is operating in a macro-environment that has been destablized by – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing commodity prices, technology disruption,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Innovative Tyres Tubes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Innovative Tyres Tubes can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Innovative Tyres Tubes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Innovative Tyres Tubes 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 Innovative Tyres Tubes can be done for the following purposes –
1. Strategic planning of Innovative Tyres Tubes
2. Improving business portfolio management of Innovative Tyres Tubes
3. Assessing feasibility of the new initiative in India
4. Making a Tires sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Innovative Tyres Tubes
Strengths of Innovative Tyres Tubes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Innovative Tyres Tubes are -
High switching costs
– The high switching costs that Innovative Tyres Tubes 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
– Innovative Tyres Tubes is one of the most innovative firm in Tires sector.
Successful track record of launching new products
– Innovative Tyres Tubes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Innovative Tyres Tubes 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 Innovative Tyres Tubes
– The covid-19 pandemic has put organizational resilience at the centre of everthing Innovative Tyres Tubes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Innovative Tyres Tubes in Tires industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Innovative Tyres Tubes in the Consumer Cyclical sector have low bargaining power. Innovative Tyres Tubes has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Innovative Tyres Tubes to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Innovative Tyres Tubes 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 Innovative Tyres Tubes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Innovative Tyres Tubes emphasize – knowledge, initiative, and innovation.
High brand equity
– Innovative Tyres Tubes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Innovative Tyres Tubes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Innovative Tyres Tubes has one of the best training and development program in Consumer Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Strong track record of project management in the Tires industry
– Innovative Tyres Tubes 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
– Innovative Tyres Tubes is one of the leading players in the Tires 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.
Effective Research and Development (R&D)
– Innovative Tyres Tubes has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Innovative Tyres Tubes staying ahead in the Tires industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Innovative Tyres Tubes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovative Tyres Tubes are -
High dependence on Innovative Tyres Tubes ‘s star products
– The top 2 products and services of Innovative Tyres Tubes still accounts for major business revenue. This dependence on star products in Tires industry has resulted into insufficient focus on developing new products, even though Innovative Tyres Tubes has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Innovative Tyres Tubes has high operating costs in the Tires industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Innovative Tyres Tubes lucrative customers.
Aligning sales with marketing
– From the outside it seems that Innovative Tyres Tubes needs to have more collaboration between its sales team and marketing team. Sales professionals in the Tires industry have deep experience in developing customer relationships. Marketing department at Innovative Tyres Tubes can leverage the sales team experience to cultivate customer relationships as Innovative Tyres Tubes is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Innovative Tyres Tubes, it seems that company is thinking out the frontier risks that can impact Tires 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 cash cycle compare to competitors
Innovative Tyres Tubes has a high cash cycle compare to other players in the Tires industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Innovative Tyres Tubes 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 Tires industry using digital technology.
Compensation and incentives
– The revenue per employee of Innovative Tyres Tubes is just above the Tires 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Innovative Tyres Tubes is slow explore the new channels of communication. These new channels of communication can help Innovative Tyres Tubes to provide better information regarding Tires products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Innovative Tyres Tubes is dominated by functional specialists. It is not different from other players in the Tires industry, but Innovative Tyres Tubes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Innovative Tyres Tubes to focus more on services in the Tires industry rather than just following the product oriented approach.
Need for greater diversity
– Innovative Tyres Tubes 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.
Low market penetration in new markets
– Outside its home market of India, Innovative Tyres Tubes needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Innovative Tyres Tubes Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Innovative Tyres Tubes are -
Using analytics as competitive advantage
– Innovative Tyres Tubes has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Tires sector. This continuous investment in analytics has enabled Innovative Tyres Tubes to build a competitive advantage using analytics. The analytics driven competitive advantage can help Innovative Tyres Tubes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Innovative Tyres Tubes 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.
Better consumer reach
– The expansion of the 5G network will help Innovative Tyres Tubes to increase its market reach. Innovative Tyres Tubes will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Innovative Tyres Tubes in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Tires industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Innovative Tyres Tubes 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 Innovative Tyres Tubes to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Innovative Tyres Tubes 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 Tires industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Innovative Tyres Tubes 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 Innovative Tyres Tubes to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Innovative Tyres Tubes is facing challenges because of the dominance of functional experts in the organization. Innovative Tyres Tubes can utilize new technology in the field of Tires industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Innovative Tyres Tubes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Innovative Tyres Tubes can improve the customer journey of consumers in the Tires 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Tires industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Innovative Tyres Tubes 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. Innovative Tyres Tubes 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.
Developing new processes and practices
– Innovative Tyres Tubes can develop new processes and procedures in Tires 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.
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 Innovative Tyres Tubes 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.
Threats Innovative Tyres Tubes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Innovative Tyres Tubes are -
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. Innovative Tyres Tubes 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.
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.
Consumer confidence and its impact on Innovative Tyres Tubes 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 Tires industry and other sectors.
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 Innovative Tyres Tubes.
High dependence on third party suppliers
– Innovative Tyres Tubes 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.
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 Innovative Tyres Tubes in the Tires sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Innovative Tyres Tubes is facing in Tires 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, Innovative Tyres Tubes may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Tires sector.
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. Innovative Tyres Tubes needs to understand the core reasons impacting the Tires industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Tires industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Innovative Tyres Tubes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Innovative Tyres Tubes
– 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 Innovative Tyres Tubes.
Technology acceleration in Forth Industrial Revolution
– Innovative Tyres Tubes has witnessed rapid integration of technology during Covid-19 in the Tires industry. As one of the leading players in the industry, Innovative Tyres Tubes needs to keep up with the evolution of technology in the Tires 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, Innovative Tyres Tubes 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 Innovative Tyres Tubes prominent markets.
Weighted SWOT Analysis of Innovative Tyres Tubes Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Innovative Tyres Tubes 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 Innovative Tyres Tubes 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 Innovative Tyres Tubes 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 Innovative Tyres Tubes 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 Innovative Tyres Tubes needs to make to build a sustainable competitive advantage.
