Fairfax Media (FXJ) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Fairfax Media (Australia)

Based on various researches at Oak Spring University , Fairfax Media is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , there is backlash against globalization, wage bills are increasing, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing commodity prices, etc

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Introduction to SWOT Analysis of Fairfax Media

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fairfax Media can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fairfax Media, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fairfax Media 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Fairfax Media can be done for the following purposes –
1. Strategic planning of Fairfax Media
2. Improving business portfolio management of Fairfax Media
3. Assessing feasibility of the new initiative in Australia
4. Making a Printing & Publishing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fairfax Media

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Strengths of Fairfax Media | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Fairfax Media are -

Ability to recruit top talent

– Fairfax Media is one of the leading players in the Printing & Publishing industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.

Effective Research and Development (R&D)

– Fairfax Media has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Fairfax Media staying ahead in the Printing & Publishing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management in the Printing & Publishing industry

– Fairfax Media is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High brand equity

– Fairfax Media has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fairfax Media to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Fairfax Media 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 Fairfax Media is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Fairfax Media emphasize – knowledge, initiative, and innovation.

Operational resilience

– The operational resilience strategy of Fairfax Media comprises – understanding the underlying the factors in the Printing & Publishing 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.

Superior customer experience

– The customer experience strategy of Fairfax Media in Printing & Publishing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

– Suppliers of Fairfax Media in the Services sector have low bargaining power. Fairfax Media has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fairfax Media to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– Fairfax Media has one of the best training and development program in Services 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.

Highly skilled collaborators

– Fairfax Media has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Printing & Publishing industry. Secondly the value chain collaborators of Fairfax Media have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to lead change in Printing & Publishing

– Fairfax Media is one of the leading players in the Printing & Publishing industry in Australia. Over the years it has not only transformed the business landscape in the Printing & Publishing industry in Australia but also across the existing markets. The ability to lead change has enabled Fairfax Media in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High switching costs

– The high switching costs that Fairfax Media 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.

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Weaknesses of Fairfax Media | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Fairfax Media are -

Increasing silos among functional specialists

– The organizational structure of Fairfax Media is dominated by functional specialists. It is not different from other players in the Printing & Publishing industry, but Fairfax Media needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fairfax Media to focus more on services in the Printing & Publishing industry rather than just following the product oriented approach.

No frontier risks strategy

– From the 10K / annual statement of Fairfax Media, it seems that company is thinking out the frontier risks that can impact Printing & Publishing 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 Australia, Fairfax Media needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Interest costs

– Compare to the competition, Fairfax Media 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.

Lack of clear differentiation of Fairfax Media products

– To increase the profitability and margins on the products, Fairfax Media needs to provide more differentiated products than what it is currently offering in the marketplace.

Employees’ less understanding of Fairfax Media strategy

– From the outside it seems that the employees of Fairfax Media 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.

High cash cycle compare to competitors

Fairfax Media has a high cash cycle compare to other players in the Printing & Publishing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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 Fairfax Media supply chain. Even after few cautionary changes, Fairfax Media is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fairfax Media vulnerable to further global disruptions in South East Asia.

Slow to strategic competitive environment developments

– As Fairfax Media is one of the leading players in the Printing & Publishing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Printing & Publishing industry in last five years.

Ability to respond to the competition

– As the decision making is very deliberative at Fairfax Media, in the dynamic environment of Printing & Publishing industry it has struggled to respond to the nimble upstart competition. Fairfax Media has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Products dominated business model

– Even though Fairfax Media has some of the most successful models in the Printing & Publishing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Fairfax Media should strive to include more intangible value offerings along with its core products and services.

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Fairfax Media Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Fairfax Media are -

Leveraging digital technologies

– Fairfax Media 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Fairfax Media can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Fairfax Media 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 Fairfax Media to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

– The expansion of the 5G network will help Fairfax Media to increase its market reach. Fairfax Media 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.

Learning at scale

– Online learning technologies has now opened space for Fairfax Media 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fairfax Media can use these opportunities to build new business models that can help the communities that Fairfax Media operates in. Secondly it can use opportunities from government spending in Printing & Publishing sector.

Use of Bitcoin and other crypto currencies for transactions in Printing & Publishing industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fairfax Media in the Printing & Publishing industry. Now Fairfax Media can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– Fairfax Media can use the latest technology developments to improve its manufacturing and designing process in Printing & Publishing 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.

Loyalty marketing

– Fairfax Media 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.

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 Fairfax Media 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.

Building a culture of innovation

– managers at Fairfax Media 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 Printing & Publishing industry.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Printing & Publishing industry, but it has also influenced the consumer preferences. Fairfax Media can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Printing & Publishing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fairfax Media 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. Fairfax Media 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.

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Threats Fairfax Media External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Fairfax Media are -

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.

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.

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. Fairfax Media 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.

Increasing wage structure of Fairfax Media

– 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 Fairfax Media.

Regulatory challenges

– Fairfax Media 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 Printing & Publishing industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Printing & Publishing industry are lowering. It can presents Fairfax Media with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing & Publishing sector.

Technology acceleration in Forth Industrial Revolution

– Fairfax Media has witnessed rapid integration of technology during Covid-19 in the Printing & Publishing industry. As one of the leading players in the industry, Fairfax Media needs to keep up with the evolution of technology in the Printing & Publishing 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.

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 Fairfax Media in the Printing & Publishing sector and impact the bottomline of the organization.

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 Fairfax Media 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. Fairfax Media needs to understand the core reasons impacting the Printing & Publishing industry. This will help it in building a better workplace.

Easy access to finance

– Easy access to finance in Printing & Publishing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fairfax Media can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Shortening product life cycle

– it is one of the major threat that Fairfax Media is facing in Printing & Publishing 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, Fairfax Media may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing & Publishing sector.

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Weighted SWOT Analysis of Fairfax Media Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fairfax Media 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 Fairfax Media 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 Fairfax Media 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 Fairfax Media 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 Fairfax Media needs to make to build a sustainable competitive advantage.

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