Lakshmi Finance and Industrial (LFIC) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lakshmi Finance and Industrial (India)

Based on various researches at Oak Spring University , Lakshmi Finance and Industrial is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of Lakshmi Finance and Industrial

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lakshmi Finance and Industrial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lakshmi Finance and Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lakshmi Finance and Industrial 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Lakshmi Finance and Industrial can be done for the following purposes –
1. Strategic planning of Lakshmi Finance and Industrial
2. Improving business portfolio management of Lakshmi Finance and Industrial
3. Assessing feasibility of the new initiative in India
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lakshmi Finance and Industrial

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Strengths of Lakshmi Finance and Industrial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Lakshmi Finance and Industrial are -

High brand equity

– Lakshmi Finance and Industrial has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lakshmi Finance and Industrial to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– Lakshmi Finance and Industrial is present in almost all the verticals within the industry. This has provided Lakshmi Finance and Industrial 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

– Lakshmi Finance and Industrial is one of the most innovative firm in sector.

Operational resilience

– The operational resilience strategy of Lakshmi Finance and Industrial comprises – understanding the underlying the factors in the 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.

Training and development

– Lakshmi Finance and Industrial has one of the best training and development program in 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.

Ability to recruit top talent

– Lakshmi Finance and Industrial is one of the leading players in the 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.

Cross disciplinary teams

– Horizontal connected teams at the Lakshmi Finance and Industrial 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.

Learning organization

- Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lakshmi Finance and Industrial emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Lakshmi Finance and Industrial in the sector have low bargaining power. Lakshmi Finance and Industrial has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lakshmi Finance and Industrial to manage not only supply disruptions but also source products at highly competitive prices.

Successful track record of launching new products

– Lakshmi Finance and Industrial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lakshmi Finance and Industrial 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.

Superior customer experience

– The customer experience strategy of Lakshmi Finance and Industrial in 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 Lakshmi Finance and Industrial 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.

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Weaknesses of Lakshmi Finance and Industrial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Lakshmi Finance and Industrial are -

Workers concerns about automation

– As automation is fast increasing in the industry, Lakshmi Finance and Industrial 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.

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 Lakshmi Finance and Industrial supply chain. Even after few cautionary changes, Lakshmi Finance and Industrial is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lakshmi Finance and Industrial vulnerable to further global disruptions in South East Asia.

Capital Spending Reduction

– Even during the low interest decade, Lakshmi Finance and Industrial 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 industry using digital technology.

Employees’ less understanding of Lakshmi Finance and Industrial strategy

– From the outside it seems that the employees of Lakshmi Finance and Industrial 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.

Increasing silos among functional specialists

– The organizational structure of Lakshmi Finance and Industrial is dominated by functional specialists. It is not different from other players in the industry, but Lakshmi Finance and Industrial needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lakshmi Finance and Industrial to focus more on services in the industry rather than just following the product oriented approach.

Interest costs

– Compare to the competition, Lakshmi Finance and Industrial 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.

Low market penetration in new markets

– Outside its home market of India, Lakshmi Finance and Industrial needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to strategic competitive environment developments

– As Lakshmi Finance and Industrial is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Compensation and incentives

– The revenue per employee of Lakshmi Finance and Industrial is just above the 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

Lakshmi Finance and Industrial has a high cash cycle compare to other players in the 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, Lakshmi Finance and Industrial has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lakshmi Finance and Industrial lucrative customers.

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Lakshmi Finance and Industrial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Lakshmi Finance and Industrial are -

Manufacturing automation

– Lakshmi Finance and Industrial can use the latest technology developments to improve its manufacturing and designing process in sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Loyalty marketing

– Lakshmi Finance and Industrial 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.

Developing new processes and practices

– Lakshmi Finance and Industrial can develop new processes and procedures in 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lakshmi Finance and Industrial 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. Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial 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.

Learning at scale

– Online learning technologies has now opened space for Lakshmi Finance and Industrial 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial to hire the very best people irrespective of their geographical location.

Better consumer reach

– The expansion of the 5G network will help Lakshmi Finance and Industrial to increase its market reach. Lakshmi Finance and Industrial 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.

Creating value in data economy

– The success of analytics program of Lakshmi Finance and Industrial has opened avenues for new revenue streams for the organization in industry. This can help Lakshmi Finance and Industrial to build a more holistic ecosystem for Lakshmi Finance and Industrial products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Use of Bitcoin and other crypto currencies for transactions in industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lakshmi Finance and Industrial in the industry. Now Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.

Building a culture of innovation

– managers at Lakshmi Finance and Industrial 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 industry.

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Threats Lakshmi Finance and Industrial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Lakshmi Finance and Industrial are -

Shortening product life cycle

– it is one of the major threat that Lakshmi Finance and Industrial is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– Lakshmi Finance and Industrial has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Lakshmi Finance and Industrial needs to keep up with the evolution of technology in the 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.

Consumer confidence and its impact on Lakshmi Finance and Industrial 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 industry and other sectors.

Increasing wage structure of Lakshmi Finance and Industrial

– 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 Lakshmi Finance and Industrial.

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 Lakshmi Finance and Industrial.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lakshmi Finance and Industrial in industry. The 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.

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.

Easy access to finance

– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lakshmi Finance and Industrial can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Lakshmi Finance and Industrial in the sector and impact the bottomline of the organization.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Lakshmi Finance and Industrial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

High dependence on third party suppliers

– Lakshmi Finance and Industrial 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.

Environmental challenges

– Lakshmi Finance and Industrial 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. Lakshmi Finance and Industrial can take advantage of this fund but it will also bring new competitors in the industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial prominent markets.

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Weighted SWOT Analysis of Lakshmi Finance and Industrial Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial 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 Lakshmi Finance and Industrial needs to make to build a sustainable competitive advantage.

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