SWOT Analysis / TOWS Matrix for Veolia Environnement (United Kingdom)
Based on various researches at Oak Spring University , Veolia Environnement is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Veolia Environnement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Veolia Environnement can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Veolia Environnement, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Veolia Environnement 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 Veolia Environnement can be done for the following purposes –
1. Strategic planning of Veolia Environnement
2. Improving business portfolio management of Veolia Environnement
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Veolia Environnement
Strengths of Veolia Environnement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Veolia Environnement are -
Learning organization
- Veolia Environnement 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 Veolia Environnement is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Veolia Environnement emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Veolia Environnement 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 Veolia Environnement in Waste Management Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Veolia Environnement has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Veolia Environnement staying ahead in the Waste Management Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Veolia Environnement has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Waste Management Services industry. Secondly the value chain collaborators of Veolia Environnement have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Veolia Environnement 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.
Low bargaining power of suppliers
– Suppliers of Veolia Environnement in the Services sector have low bargaining power. Veolia Environnement has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Veolia Environnement to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Veolia Environnement is one of the most innovative firm in Waste Management Services sector.
Operational resilience
– The operational resilience strategy of Veolia Environnement comprises – understanding the underlying the factors in the Waste Management Services 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.
Sustainable margins compare to other players in Waste Management Services industry
– Veolia Environnement has clearly differentiated products in the market place. This has enabled Veolia Environnement to fetch slight price premium compare to the competitors in the Waste Management Services industry. The sustainable margins have also helped Veolia Environnement to invest into research and development (R&D) and innovation.
High brand equity
– Veolia Environnement has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Veolia Environnement to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Waste Management Services industry
– Veolia Environnement is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Veolia Environnement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Veolia Environnement are -
Low market penetration in new markets
– Outside its home market of United Kingdom, Veolia Environnement needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Veolia Environnement 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 Veolia Environnement, it seems that company is thinking out the frontier risks that can impact Waste Management Services 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.
Ability to respond to the competition
– As the decision making is very deliberative at Veolia Environnement, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. Veolia Environnement has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Veolia Environnement is dominated by functional specialists. It is not different from other players in the Waste Management Services industry, but Veolia Environnement needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Veolia Environnement to focus more on services in the Waste Management Services industry rather than just following the product oriented approach.
High bargaining power of channel partners in Waste Management Services industry
– because of the regulatory requirements in United Kingdom, Veolia Environnement 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 Waste Management Services industry.
Aligning sales with marketing
– From the outside it seems that Veolia Environnement needs to have more collaboration between its sales team and marketing team. Sales professionals in the Waste Management Services industry have deep experience in developing customer relationships. Marketing department at Veolia Environnement can leverage the sales team experience to cultivate customer relationships as Veolia Environnement is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Veolia Environnement has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Waste Management Services industry over the last five years. Veolia Environnement 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.
Employees’ less understanding of Veolia Environnement strategy
– From the outside it seems that the employees of Veolia Environnement 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 operating costs
– Compare to the competitors, Veolia Environnement has high operating costs in the Waste Management Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Veolia Environnement lucrative customers.
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 Veolia Environnement supply chain. Even after few cautionary changes, Veolia Environnement is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Veolia Environnement vulnerable to further global disruptions in South East Asia.
Veolia Environnement Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Veolia Environnement are -
Developing new processes and practices
– Veolia Environnement can develop new processes and procedures in Waste Management 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.
Using analytics as competitive advantage
– Veolia Environnement has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Waste Management Services sector. This continuous investment in analytics has enabled Veolia Environnement to build a competitive advantage using analytics. The analytics driven competitive advantage can help Veolia Environnement to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Veolia Environnement has opened avenues for new revenue streams for the organization in Waste Management Services industry. This can help Veolia Environnement to build a more holistic ecosystem for Veolia Environnement products in the Waste Management Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Veolia Environnement can use these opportunities to build new business models that can help the communities that Veolia Environnement operates in. Secondly it can use opportunities from government spending in Waste Management Services sector.
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. Veolia Environnement can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Veolia Environnement can use the latest technology developments to improve its manufacturing and designing process in Waste Management 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Veolia Environnement 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 Veolia Environnement to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Veolia Environnement can improve the customer journey of consumers in the Waste Management Services 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Waste Management Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Veolia Environnement 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. Veolia Environnement 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Veolia Environnement 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Veolia Environnement is facing challenges because of the dominance of functional experts in the organization. Veolia Environnement can utilize new technology in the field of Waste Management Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Veolia Environnement in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Waste Management Services industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Veolia Environnement 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 Waste Management Services industry.
Threats Veolia Environnement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Veolia Environnement are -
High dependence on third party suppliers
– Veolia Environnement 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.
Stagnating economy with rate increase
– Veolia Environnement 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 Waste Management Services industry.
Consumer confidence and its impact on Veolia Environnement 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 Waste Management Services industry and other sectors.
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 Veolia Environnement.
Environmental challenges
– Veolia Environnement 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. Veolia Environnement can take advantage of this fund but it will also bring new competitors in the Waste Management Services industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Veolia Environnement may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Waste Management Services sector.
Easy access to finance
– Easy access to finance in Waste Management Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Veolia Environnement can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Veolia Environnement 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 Veolia Environnement prominent markets.
Technology acceleration in Forth Industrial Revolution
– Veolia Environnement has witnessed rapid integration of technology during Covid-19 in the Waste Management Services industry. As one of the leading players in the industry, Veolia Environnement needs to keep up with the evolution of technology in the Waste Management 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Waste Management Services industry are lowering. It can presents Veolia Environnement with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Waste Management Services sector.
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. Veolia Environnement 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.
Weighted SWOT Analysis of Veolia Environnement Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement 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 Veolia Environnement needs to make to build a sustainable competitive advantage.