Datalogic (DAL) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Peripherals
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Datalogic (Italy)
Based on various researches at Oak Spring University , Datalogic is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, wage bills are increasing, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Datalogic can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Datalogic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Datalogic 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 Datalogic can be done for the following purposes –
1. Strategic planning of Datalogic
2. Improving business portfolio management of Datalogic
3. Assessing feasibility of the new initiative in Italy
4. Making a Computer Peripherals sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Datalogic
Strengths of Datalogic | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Datalogic are -
Innovation driven organization
– Datalogic is one of the most innovative firm in Computer Peripherals sector.
Training and development
– Datalogic has one of the best training and development program in Technology 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
- Datalogic 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 Datalogic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Datalogic emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Datalogic has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Datalogic staying ahead in the Computer Peripherals industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Datalogic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Datalogic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Datalogic comprises – understanding the underlying the factors in the Computer Peripherals 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.
Cross disciplinary teams
– Horizontal connected teams at the Datalogic 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.
High switching costs
– The high switching costs that Datalogic 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 Peripherals industry
– Datalogic has clearly differentiated products in the market place. This has enabled Datalogic to fetch slight price premium compare to the competitors in the Computer Peripherals industry. The sustainable margins have also helped Datalogic to invest into research and development (R&D) and innovation.
Analytics focus
– Datalogic 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 Peripherals industry. The technology infrastructure of Italy 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.
Digital Transformation in Computer Peripherals industry
- digital transformation varies from industry to industry. For Datalogic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Datalogic 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.
Successful track record of launching new products
– Datalogic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Datalogic 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.
Weaknesses of Datalogic | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Datalogic are -
High operating costs
– Compare to the competitors, Datalogic has high operating costs in the Computer Peripherals industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Datalogic lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Computer Peripherals industry, Datalogic 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.
No frontier risks strategy
– From the 10K / annual statement of Datalogic, it seems that company is thinking out the frontier risks that can impact Computer Peripherals 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.
Aligning sales with marketing
– From the outside it seems that Datalogic needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Peripherals industry have deep experience in developing customer relationships. Marketing department at Datalogic can leverage the sales team experience to cultivate customer relationships as Datalogic is planning to shift buying processes online.
Lack of clear differentiation of Datalogic products
– To increase the profitability and margins on the products, Datalogic needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Datalogic is dominated by functional specialists. It is not different from other players in the Computer Peripherals industry, but Datalogic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Datalogic to focus more on services in the Computer Peripherals industry rather than just following the product oriented approach.
High cash cycle compare to competitors
Datalogic has a high cash cycle compare to other players in the Computer Peripherals industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at Datalogic, in the dynamic environment of Computer Peripherals industry it has struggled to respond to the nimble upstart competition. Datalogic has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Datalogic has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Peripherals industry over the last five years. Datalogic 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.
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 Datalogic supply chain. Even after few cautionary changes, Datalogic is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Datalogic vulnerable to further global disruptions in South East Asia.
High dependence on Datalogic ‘s star products
– The top 2 products and services of Datalogic still accounts for major business revenue. This dependence on star products in Computer Peripherals industry has resulted into insufficient focus on developing new products, even though Datalogic has relatively successful track record of launching new products.
Datalogic Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Datalogic are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Datalogic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Peripherals industry, and it will provide faster access to the consumers.
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. Datalogic can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Computer Peripherals industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Datalogic in the Computer Peripherals industry. Now Datalogic can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Datalogic 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 Datalogic to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Datalogic has opened avenues for new revenue streams for the organization in Computer Peripherals industry. This can help Datalogic to build a more holistic ecosystem for Datalogic products in the Computer Peripherals 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 Peripherals industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Datalogic 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. Datalogic 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 Peripherals industry, but it has also influenced the consumer preferences. Datalogic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Datalogic can use these opportunities to build new business models that can help the communities that Datalogic operates in. Secondly it can use opportunities from government spending in Computer Peripherals sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Datalogic is facing challenges because of the dominance of functional experts in the organization. Datalogic can utilize new technology in the field of Computer Peripherals industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Datalogic 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.
Manufacturing automation
– Datalogic can use the latest technology developments to improve its manufacturing and designing process in Computer Peripherals 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.
Buying journey improvements
– Datalogic can improve the customer journey of consumers in the Computer Peripherals 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Datalogic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Datalogic External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Datalogic are -
Regulatory challenges
– Datalogic 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 Peripherals industry regulations.
Stagnating economy with rate increase
– Datalogic 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 Computer Peripherals industry.
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 Datalogic business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Datalogic in Computer Peripherals industry. The Computer Peripherals 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Peripherals industry are lowering. It can presents Datalogic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Peripherals sector.
Environmental challenges
– Datalogic 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. Datalogic can take advantage of this fund but it will also bring new competitors in the Computer Peripherals industry.
Shortening product life cycle
– it is one of the major threat that Datalogic is facing in Computer Peripherals sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Datalogic 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 Peripherals sector.
High dependence on third party suppliers
– Datalogic 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.
Easy access to finance
– Easy access to finance in Computer Peripherals industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Datalogic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Consumer confidence and its impact on Datalogic 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 Peripherals industry and other sectors.
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.
Weighted SWOT Analysis of Datalogic Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Datalogic 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 Datalogic 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 Datalogic 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 Datalogic 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 Datalogic needs to make to build a sustainable competitive advantage.