Merchavia Holdings and Investments W1 (MRHL_t1) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Merchavia Holdings and Investments W1 (Israel)
Based on various researches at Oak Spring University , Merchavia Holdings and Investments W1 is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing energy prices, supply chains are disrupted by pandemic , geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of Merchavia Holdings and Investments W1
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Merchavia Holdings and Investments W1 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merchavia Holdings and Investments W1, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 can be done for the following purposes –
1. Strategic planning of Merchavia Holdings and Investments W1
2. Improving business portfolio management of Merchavia Holdings and Investments W1
3. Assessing feasibility of the new initiative in Israel
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Merchavia Holdings and Investments W1
Strengths of Merchavia Holdings and Investments W1 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merchavia Holdings and Investments W1 are -
Digital Transformation in industry
- digital transformation varies from industry to industry. For Merchavia Holdings and Investments W1 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merchavia Holdings and Investments W1 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.
Operational resilience
– The operational resilience strategy of Merchavia Holdings and Investments W1 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
– Merchavia Holdings and Investments W1 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.
Successful track record of launching new products
– Merchavia Holdings and Investments W1 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Merchavia Holdings and Investments W1 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.
Strong track record of project management in the industry
– Merchavia Holdings and Investments W1 is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Merchavia Holdings and Investments W1 is present in almost all the verticals within the industry. This has provided Merchavia Holdings and Investments W1 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.
Cross disciplinary teams
– Horizontal connected teams at the Merchavia Holdings and Investments W1 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.
Superior customer experience
– The customer experience strategy of Merchavia Holdings and Investments W1 in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in
– Merchavia Holdings and Investments W1 is one of the leading players in the industry in Israel. Over the years it has not only transformed the business landscape in the industry in Israel but also across the existing markets. The ability to lead change has enabled Merchavia Holdings and Investments W1 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Merchavia Holdings and Investments W1 in the sector have low bargaining power. Merchavia Holdings and Investments W1 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merchavia Holdings and Investments W1 to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Merchavia Holdings and Investments W1 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Merchavia Holdings and Investments W1 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Merchavia Holdings and Investments W1 is one of the most innovative firm in sector.
Weaknesses of Merchavia Holdings and Investments W1 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Merchavia Holdings and Investments W1 are -
High dependence on Merchavia Holdings and Investments W1 ‘s star products
– The top 2 products and services of Merchavia Holdings and Investments W1 still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Merchavia Holdings and Investments W1 has relatively successful track record of launching new products.
Skills based hiring in industry
– The stress on hiring functional specialists at Merchavia Holdings and Investments W1 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.
Compensation and incentives
– The revenue per employee of Merchavia Holdings and Investments W1 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 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 Merchavia Holdings and Investments W1 supply chain. Even after few cautionary changes, Merchavia Holdings and Investments W1 is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merchavia Holdings and Investments W1 vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Merchavia Holdings and Investments W1 needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Merchavia Holdings and Investments W1 can leverage the sales team experience to cultivate customer relationships as Merchavia Holdings and Investments W1 is planning to shift buying processes online.
Employees’ less understanding of Merchavia Holdings and Investments W1 strategy
– From the outside it seems that the employees of Merchavia Holdings and Investments W1 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.
No frontier risks strategy
– From the 10K / annual statement of Merchavia Holdings and Investments W1, it seems that company is thinking out the frontier risks that can impact 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.
Low market penetration in new markets
– Outside its home market of Israel, Merchavia Holdings and Investments W1 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Merchavia Holdings and Investments W1, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Merchavia Holdings and Investments W1 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Merchavia Holdings and Investments W1 products
– To increase the profitability and margins on the products, Merchavia Holdings and Investments W1 needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Merchavia Holdings and Investments W1 is dominated by functional specialists. It is not different from other players in the industry, but Merchavia Holdings and Investments W1 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merchavia Holdings and Investments W1 to focus more on services in the industry rather than just following the product oriented approach.
Merchavia Holdings and Investments W1 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Merchavia Holdings and Investments W1 are -
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. Merchavia Holdings and Investments W1 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. Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Merchavia Holdings and Investments W1 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.
Developing new processes and practices
– Merchavia Holdings and Investments W1 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.
Loyalty marketing
– Merchavia Holdings and Investments W1 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, Merchavia Holdings and Investments W1 is facing challenges because of the dominance of functional experts in the organization. Merchavia Holdings and Investments W1 can utilize new technology in the field of 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 Merchavia Holdings and Investments W1 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Merchavia Holdings and Investments W1 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Merchavia Holdings and Investments W1 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, Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Merchavia Holdings and Investments W1 has opened avenues for new revenue streams for the organization in industry. This can help Merchavia Holdings and Investments W1 to build a more holistic ecosystem for Merchavia Holdings and Investments W1 products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Merchavia Holdings and Investments W1 can improve the customer journey of consumers in the 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Merchavia Holdings and Investments W1 can use these opportunities to build new business models that can help the communities that Merchavia Holdings and Investments W1 operates in. Secondly it can use opportunities from government spending in sector.
Threats Merchavia Holdings and Investments W1 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Merchavia Holdings and Investments W1 are -
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. Merchavia Holdings and Investments W1 can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1
– 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 Merchavia Holdings and Investments W1.
Technology acceleration in Forth Industrial Revolution
– Merchavia Holdings and Investments W1 has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Merchavia Holdings and Investments W1 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 prominent markets.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Merchavia Holdings and Investments W1 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.
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 Merchavia Holdings and Investments W1.
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 Merchavia Holdings and Investments W1 in the sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Merchavia Holdings and Investments W1 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 industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Merchavia Holdings and Investments W1 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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, Merchavia Holdings and Investments W1 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Weighted SWOT Analysis of Merchavia Holdings and Investments W1 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 needs to make to build a sustainable competitive advantage.