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 – there is backlash against globalization, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%,
challanges to central banks by blockchain based private currencies, increasing energy prices, 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 -
Highly skilled collaborators
– Merchavia Holdings and Investments W1 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Merchavia Holdings and Investments W1 have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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.
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.
Learning organization
- Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Merchavia Holdings and Investments W1 emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Merchavia Holdings and Investments W1 is one of the leading players in the 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.
Sustainable margins compare to other players in industry
– Merchavia Holdings and Investments W1 has clearly differentiated products in the market place. This has enabled Merchavia Holdings and Investments W1 to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Merchavia Holdings and Investments W1 to invest into research and development (R&D) and innovation.
Analytics focus
– Merchavia Holdings and Investments W1 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 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.
High switching costs
– The high switching costs that Merchavia Holdings and Investments W1 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.
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.
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 -
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.
High operating costs
– Compare to the competitors, Merchavia Holdings and Investments W1 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 Merchavia Holdings and Investments W1 lucrative customers.
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.
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.
Slow to strategic competitive environment developments
– As Merchavia Holdings and Investments W1 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.
Need for greater diversity
– Merchavia Holdings and Investments W1 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.
High cash cycle compare to competitors
Merchavia Holdings and Investments W1 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.
Slow decision making process
– As mentioned earlier in the report, Merchavia Holdings and Investments W1 has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Merchavia Holdings and Investments W1 even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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.
Capital Spending Reduction
– Even during the low interest decade, Merchavia Holdings and Investments W1 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 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.
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 -
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.
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.
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.
Using analytics as competitive advantage
– Merchavia Holdings and Investments W1 has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Merchavia Holdings and Investments W1 to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merchavia Holdings and Investments W1 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Merchavia Holdings and Investments W1 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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Merchavia Holdings and Investments W1 to increase its market reach. Merchavia Holdings and Investments W1 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.
Leveraging digital technologies
– Merchavia Holdings and Investments W1 can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merchavia Holdings and Investments W1 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.
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 -
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.
Regulatory challenges
– Merchavia Holdings and Investments W1 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 industry regulations.
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.
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.
Shortening product life cycle
– it is one of the major threat that Merchavia Holdings and Investments W1 is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
High dependence on third party suppliers
– Merchavia Holdings and Investments W1 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.
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.
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 Merchavia Holdings and Investments W1 business can come under increasing regulations regarding data privacy, data security, etc.
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. Merchavia Holdings and Investments W1 needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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.
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. Merchavia Holdings and Investments W1 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.
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.