SWOT Analysis / TOWS Matrix for Forval Telecom (Japan)
Based on various researches at Oak Spring University , Forval Telecom is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing, there is backlash against globalization, technology disruption, increasing commodity prices,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Forval Telecom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Forval Telecom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Forval Telecom 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 Forval Telecom can be done for the following purposes –
1. Strategic planning of Forval Telecom
2. Improving business portfolio management of Forval Telecom
3. Assessing feasibility of the new initiative in Japan
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Forval Telecom
Strengths of Forval Telecom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Forval Telecom are -
Innovation driven organization
– Forval Telecom is one of the most innovative firm in Communications Services sector.
Highly skilled collaborators
– Forval Telecom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of Forval Telecom have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Forval Telecom is one of the leading players in the Communications Services industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management in the Communications Services industry
– Forval Telecom is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Forval Telecom in the Services sector have low bargaining power. Forval Telecom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Forval Telecom to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Forval Telecom
– The covid-19 pandemic has put organizational resilience at the centre of everthing Forval Telecom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Communications Services
– Forval Telecom is one of the leading players in the Communications Services industry in Japan. Over the years it has not only transformed the business landscape in the Communications Services industry in Japan but also across the existing markets. The ability to lead change has enabled Forval Telecom in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Forval Telecom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Forval Telecom 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.
Digital Transformation in Communications Services industry
- digital transformation varies from industry to industry. For Forval Telecom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Forval Telecom 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.
Sustainable margins compare to other players in Communications Services industry
– Forval Telecom has clearly differentiated products in the market place. This has enabled Forval Telecom to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped Forval Telecom to invest into research and development (R&D) and innovation.
Learning organization
- Forval Telecom 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 Forval Telecom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Forval Telecom emphasize – knowledge, initiative, and innovation.
Analytics focus
– Forval Telecom 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 Communications Services industry. The technology infrastructure of Japan 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.
Weaknesses of Forval Telecom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Forval Telecom are -
Products dominated business model
– Even though Forval Telecom has some of the most successful models in the Communications Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Forval Telecom should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Forval Telecom 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.
Slow to strategic competitive environment developments
– As Forval Telecom is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
Employees’ less understanding of Forval Telecom strategy
– From the outside it seems that the employees of Forval Telecom 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.
Aligning sales with marketing
– From the outside it seems that Forval Telecom needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Services industry have deep experience in developing customer relationships. Marketing department at Forval Telecom can leverage the sales team experience to cultivate customer relationships as Forval Telecom is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Forval Telecom is dominated by functional specialists. It is not different from other players in the Communications Services industry, but Forval Telecom needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Forval Telecom to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Forval Telecom 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 Communications Services industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Forval Telecom is slow explore the new channels of communication. These new channels of communication can help Forval Telecom to provide better information regarding Communications Services products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Forval Telecom, in the dynamic environment of Communications Services industry it has struggled to respond to the nimble upstart competition. Forval Telecom has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Forval Telecom has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on Forval Telecom ‘s star products
– The top 2 products and services of Forval Telecom still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Forval Telecom has relatively successful track record of launching new products.
Forval Telecom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Forval Telecom are -
Manufacturing automation
– Forval Telecom can use the latest technology developments to improve its manufacturing and designing process in Communications 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Forval Telecom is facing challenges because of the dominance of functional experts in the organization. Forval Telecom can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Forval Telecom 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. Forval Telecom 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 Forval Telecom 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.
Creating value in data economy
– The success of analytics program of Forval Telecom has opened avenues for new revenue streams for the organization in Communications Services industry. This can help Forval Telecom to build a more holistic ecosystem for Forval Telecom products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Forval Telecom 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.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Forval Telecom in the Communications Services industry. Now Forval Telecom can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Forval Telecom 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. Forval Telecom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Forval Telecom to increase its market reach. Forval Telecom 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.
Building a culture of innovation
– managers at Forval Telecom can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Communications Services industry.
Developing new processes and practices
– Forval Telecom can develop new processes and procedures in Communications Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Forval Telecom can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Forval Telecom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Forval Telecom are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Forval Telecom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
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 Forval Telecom.
Environmental challenges
– Forval Telecom 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. Forval Telecom can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Forval Telecom 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 Forval Telecom prominent markets.
Technology acceleration in Forth Industrial Revolution
– Forval Telecom has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, Forval Telecom needs to keep up with the evolution of technology in the Communications 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Communications Services industry are lowering. It can presents Forval Telecom with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Services sector.
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 Forval Telecom business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Forval Telecom 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 Communications Services industry.
High dependence on third party suppliers
– Forval Telecom 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.
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 Forval Telecom in the Communications Services sector and impact the bottomline of the organization.
Increasing wage structure of Forval Telecom
– 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 Forval Telecom.
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
– Forval Telecom 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 Communications Services industry regulations.
Weighted SWOT Analysis of Forval Telecom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Forval Telecom 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 Forval Telecom 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 Forval Telecom 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 Forval Telecom 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 Forval Telecom needs to make to build a sustainable competitive advantage.