Fresenius SE (0OO9) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Fresenius SE (United Kingdom)

Based on various researches at Oak Spring University , Fresenius SE is operating in a macro-environment that has been destablized by – there is backlash against globalization, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing energy prices, etc

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Introduction to SWOT Analysis of Fresenius SE

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fresenius SE can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fresenius SE, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fresenius SE 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 Fresenius SE can be done for the following purposes –
1. Strategic planning of Fresenius SE
2. Improving business portfolio management of Fresenius SE
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Healthcare Facilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fresenius SE

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Strengths of Fresenius SE | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Fresenius SE are -

Operational resilience

– The operational resilience strategy of Fresenius SE comprises – understanding the underlying the factors in the Healthcare Facilities 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.

Analytics focus

– Fresenius SE 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 Healthcare Facilities 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.

High brand equity

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

Diverse revenue streams

– Fresenius SE is present in almost all the verticals within the Healthcare Facilities industry. This has provided Fresenius SE 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.

Ability to lead change in Healthcare Facilities

– Fresenius SE is one of the leading players in the Healthcare Facilities industry in United Kingdom. Over the years it has not only transformed the business landscape in the Healthcare Facilities industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Fresenius SE in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Organizational Resilience of Fresenius SE

– The covid-19 pandemic has put organizational resilience at the centre of everthing Fresenius SE does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Low bargaining power of suppliers

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

Cross disciplinary teams

– Horizontal connected teams at the Fresenius SE 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.

Successful track record of launching new products

– Fresenius SE has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fresenius SE 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.

Highly skilled collaborators

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

Learning organization

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

Effective Research and Development (R&D)

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

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Weaknesses of Fresenius SE | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Fresenius SE are -

Ability to respond to the competition

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

Lack of clear differentiation of Fresenius SE products

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

Employees’ less understanding of Fresenius SE strategy

– From the outside it seems that the employees of Fresenius SE 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 dependence on Fresenius SE ‘s star products

– The top 2 products and services of Fresenius SE still accounts for major business revenue. This dependence on star products in Healthcare Facilities industry has resulted into insufficient focus on developing new products, even though Fresenius SE has relatively successful track record of launching new products.

Products dominated business model

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

High operating costs

– Compare to the competitors, Fresenius SE has high operating costs in the Healthcare Facilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fresenius SE lucrative customers.

Workers concerns about automation

– As automation is fast increasing in the Healthcare Facilities industry, Fresenius SE 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.

Need for greater diversity

– Fresenius SE 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.

No frontier risks strategy

– From the 10K / annual statement of Fresenius SE, it seems that company is thinking out the frontier risks that can impact Healthcare Facilities 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.

Increasing silos among functional specialists

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

High bargaining power of channel partners in Healthcare Facilities industry

– because of the regulatory requirements in United Kingdom, Fresenius SE 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 Healthcare Facilities industry.

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Fresenius SE Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Fresenius SE are -

Use of Bitcoin and other crypto currencies for transactions in Healthcare Facilities industry

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

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 Fresenius SE 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.

Developing new processes and practices

– Fresenius SE can develop new processes and procedures in Healthcare Facilities 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.

Better consumer reach

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

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. Fresenius SE can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

– Fresenius SE has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Healthcare Facilities sector. This continuous investment in analytics has enabled Fresenius SE to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fresenius SE to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Learning at scale

– Online learning technologies has now opened space for Fresenius SE 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Fresenius SE 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.

Creating value in data economy

– The success of analytics program of Fresenius SE has opened avenues for new revenue streams for the organization in Healthcare Facilities industry. This can help Fresenius SE to build a more holistic ecosystem for Fresenius SE products in the Healthcare Facilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Fresenius SE can improve the customer journey of consumers in the Healthcare Facilities 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.

Harnessing reconfiguration of the global supply chains

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

Building a culture of innovation

– managers at Fresenius SE 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 Healthcare Facilities industry.

Increase in government spending

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

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Threats Fresenius SE External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Fresenius SE are -

Technology acceleration in Forth Industrial Revolution

– Fresenius SE has witnessed rapid integration of technology during Covid-19 in the Healthcare Facilities industry. As one of the leading players in the industry, Fresenius SE needs to keep up with the evolution of technology in the Healthcare Facilities 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Fresenius SE in Healthcare Facilities industry. The Healthcare Facilities 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.

Consumer confidence and its impact on Fresenius SE 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 Healthcare Facilities industry and other sectors.

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. Fresenius SE needs to understand the core reasons impacting the Healthcare Facilities industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Fresenius SE 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 Fresenius SE prominent markets.

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.

Easy access to finance

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

Increasing wage structure of Fresenius SE

– 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 Fresenius SE.

Environmental challenges

– Fresenius SE 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. Fresenius SE can take advantage of this fund but it will also bring new competitors in the Healthcare Facilities industry.

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. Fresenius SE 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.

Barriers of entry lowering

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

Shortening product life cycle

– it is one of the major threat that Fresenius SE is facing in Healthcare Facilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Fresenius SE Template, Example

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

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