E&M (EMCO) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for E&M (Israel)

Based on various researches at Oak Spring University , E&M is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, wage bills are increasing, technology disruption, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing commodity prices, etc

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Introduction to SWOT Analysis of E&M

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that E&M can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the E&M, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which E&M 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 E&M can be done for the following purposes –
1. Strategic planning of E&M
2. Improving business portfolio management of E&M
3. Assessing feasibility of the new initiative in Israel
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of E&M

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Strengths of E&M | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of E&M are -

Superior customer experience

– The customer experience strategy of E&M in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– E&M is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Computer Services industry. The technology infrastructure of Israel is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Effective Research and Development (R&D)

– E&M has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – E&M staying ahead in the Computer Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that E&M 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.

Sustainable margins compare to other players in Computer Services industry

– E&M has clearly differentiated products in the market place. This has enabled E&M to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped E&M to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– E&M has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of E&M have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to recruit top talent

– E&M is one of the leading players in the Computer Services industry in Israel. It is in a position to attract the best talent available in Israel. The firm has a robust talent identification program that helps in identifying the brightest.

Low bargaining power of suppliers

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

High brand equity

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

Innovation driven organization

– E&M is one of the most innovative firm in Computer Services sector.

Cross disciplinary teams

– Horizontal connected teams at the E&M 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.

Strong track record of project management in the Computer Services industry

– E&M is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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Weaknesses of E&M | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of E&M are -

High operating costs

– Compare to the competitors, E&M has high operating costs in the Computer Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract E&M lucrative customers.

High bargaining power of channel partners in Computer Services industry

– because of the regulatory requirements in Israel, E&M 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 Computer Services industry.

Increasing silos among functional specialists

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

Slow to strategic competitive environment developments

– As E&M is one of the leading players in the Computer Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Services industry in last five years.

Capital Spending Reduction

– Even during the low interest decade, E&M 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 Computer Services industry using digital technology.

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

Skills based hiring in Computer Services industry

– The stress on hiring functional specialists at E&M has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Lack of clear differentiation of E&M products

– To increase the profitability and margins on the products, E&M needs to provide more differentiated products than what it is currently offering in the marketplace.

Products dominated business model

– Even though E&M has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. E&M should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– From the outside it seems that E&M needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Services industry have deep experience in developing customer relationships. Marketing department at E&M can leverage the sales team experience to cultivate customer relationships as E&M is planning to shift buying processes online.

Low market penetration in new markets

– Outside its home market of Israel, E&M needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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E&M Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of E&M are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for E&M 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 E&M to hire the very best people irrespective of their geographical location.

Using analytics as competitive advantage

– E&M has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Services sector. This continuous investment in analytics has enabled E&M to build a competitive advantage using analytics. The analytics driven competitive advantage can help E&M to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. E&M can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Better consumer reach

– The expansion of the 5G network will help E&M to increase its market reach. E&M 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.

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 E&M 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, E&M is facing challenges because of the dominance of functional experts in the organization. E&M can utilize new technology in the field of Computer Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Learning at scale

– Online learning technologies has now opened space for E&M 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.

Manufacturing automation

– E&M can use the latest technology developments to improve its manufacturing and designing process in Computer Services 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.

Creating value in data economy

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

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Computer Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. E&M 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. E&M 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. E&M can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, E&M can use these opportunities to build new business models that can help the communities that E&M operates in. Secondly it can use opportunities from government spending in Computer Services sector.

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Threats E&M External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of E&M are -

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. E&M needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.

High dependence on third party suppliers

– E&M 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.

Barriers of entry lowering

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

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for E&M in Computer Services industry. The Computer Services 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.

Easy access to finance

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

Regulatory challenges

– E&M 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 Computer Services industry regulations.

Increasing wage structure of E&M

– 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 E&M.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, E&M may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.

Consumer confidence and its impact on E&M 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 Computer Services industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– E&M has witnessed rapid integration of technology during Covid-19 in the Computer Services industry. As one of the leading players in the industry, E&M needs to keep up with the evolution of technology in the Computer Services 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.

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 E&M.

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 E&M business can come under increasing regulations regarding data privacy, data security, etc.

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Weighted SWOT Analysis of E&M Template, Example

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

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