SWOT Analysis / TOWS Matrix for Abbott Labs (United Kingdom)
Based on various researches at Oak Spring University , Abbott Labs is operating in a macro-environment that has been destablized by – wage bills are increasing, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing commodity prices, there is backlash against globalization, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Abbott Labs can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Abbott Labs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Abbott Labs 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 Abbott Labs can be done for the following purposes –
1. Strategic planning of Abbott Labs
2. Improving business portfolio management of Abbott Labs
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Medical Equipment & Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Abbott Labs
Strengths of Abbott Labs | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Abbott Labs are -
Low bargaining power of suppliers
– Suppliers of Abbott Labs in the Healthcare sector have low bargaining power. Abbott Labs has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Abbott Labs to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Abbott Labs 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 Medical Equipment & Supplies industry. The technology infrastructure of United Kingdom 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.
Ability to lead change in Medical Equipment & Supplies
– Abbott Labs is one of the leading players in the Medical Equipment & Supplies industry in United Kingdom. Over the years it has not only transformed the business landscape in the Medical Equipment & Supplies industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Abbott Labs 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
– Abbott Labs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Abbott Labs 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.
Diverse revenue streams
– Abbott Labs is present in almost all the verticals within the Medical Equipment & Supplies industry. This has provided Abbott Labs 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.
Strong track record of project management in the Medical Equipment & Supplies industry
– Abbott Labs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Abbott Labs 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 Abbott Labs in Medical Equipment & Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Abbott Labs is one of the leading players in the Medical Equipment & Supplies industry in United Kingdom. It is in a position to attract the best talent available in United Kingdom. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Abbott Labs 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.
Digital Transformation in Medical Equipment & Supplies industry
- digital transformation varies from industry to industry. For Abbott Labs digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Abbott Labs 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.
Innovation driven organization
– Abbott Labs is one of the most innovative firm in Medical Equipment & Supplies sector.
Weaknesses of Abbott Labs | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Abbott Labs are -
Skills based hiring in Medical Equipment & Supplies industry
– The stress on hiring functional specialists at Abbott Labs has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Lack of clear differentiation of Abbott Labs products
– To increase the profitability and margins on the products, Abbott Labs needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Abbott Labs is just above the Medical Equipment & Supplies 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 cash cycle compare to competitors
Abbott Labs has a high cash cycle compare to other players in the Medical Equipment & Supplies 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 Abbott Labs, in the dynamic environment of Medical Equipment & Supplies industry it has struggled to respond to the nimble upstart competition. Abbott Labs 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, Abbott Labs 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.
Products dominated business model
– Even though Abbott Labs has some of the most successful models in the Medical Equipment & Supplies industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Abbott Labs should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Medical Equipment & Supplies industry
– because of the regulatory requirements in United Kingdom, Abbott Labs is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Medical Equipment & Supplies industry.
Low market penetration in new markets
– Outside its home market of United Kingdom, Abbott Labs needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Abbott Labs is dominated by functional specialists. It is not different from other players in the Medical Equipment & Supplies industry, but Abbott Labs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Abbott Labs to focus more on services in the Medical Equipment & Supplies industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Abbott Labs is one of the leading players in the Medical Equipment & Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Medical Equipment & Supplies industry in last five years.
Abbott Labs Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Abbott Labs are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Abbott Labs 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 Abbott Labs to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Abbott Labs to increase its market reach. Abbott Labs 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.
Creating value in data economy
– The success of analytics program of Abbott Labs has opened avenues for new revenue streams for the organization in Medical Equipment & Supplies industry. This can help Abbott Labs to build a more holistic ecosystem for Abbott Labs products in the Medical Equipment & Supplies industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Abbott Labs can use the latest technology developments to improve its manufacturing and designing process in Medical Equipment & Supplies 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Medical Equipment & Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Abbott Labs 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. Abbott Labs 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Abbott Labs 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 Abbott Labs to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Abbott Labs can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Abbott Labs can use these opportunities to build new business models that can help the communities that Abbott Labs operates in. Secondly it can use opportunities from government spending in Medical Equipment & Supplies sector.
Loyalty marketing
– Abbott Labs 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.
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. Abbott Labs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Abbott Labs can develop new processes and procedures in Medical Equipment & Supplies 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.
Building a culture of innovation
– managers at Abbott Labs 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 Medical Equipment & Supplies industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Abbott Labs 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.
Threats Abbott Labs External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Abbott Labs are -
Increasing wage structure of Abbott Labs
– 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 Abbott Labs.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Medical Equipment & Supplies industry are lowering. It can presents Abbott Labs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Medical Equipment & Supplies sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Abbott Labs in Medical Equipment & Supplies industry. The Medical Equipment & Supplies 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 Abbott Labs.
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 Abbott Labs business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Abbott Labs may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Medical Equipment & Supplies sector.
Stagnating economy with rate increase
– Abbott Labs 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 Medical Equipment & Supplies industry.
Technology acceleration in Forth Industrial Revolution
– Abbott Labs has witnessed rapid integration of technology during Covid-19 in the Medical Equipment & Supplies industry. As one of the leading players in the industry, Abbott Labs needs to keep up with the evolution of technology in the Medical Equipment & Supplies 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.
High dependence on third party suppliers
– Abbott Labs 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.
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.
Easy access to finance
– Easy access to finance in Medical Equipment & Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Abbott Labs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Abbott Labs needs to understand the core reasons impacting the Medical Equipment & Supplies industry. This will help it in building a better workplace.
Environmental challenges
– Abbott Labs 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. Abbott Labs can take advantage of this fund but it will also bring new competitors in the Medical Equipment & Supplies industry.
Weighted SWOT Analysis of Abbott Labs Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Abbott Labs 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 Abbott Labs 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 Abbott Labs 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 Abbott Labs 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 Abbott Labs needs to make to build a sustainable competitive advantage.
