Thyssenkrupp AG (0O1C) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Thyssenkrupp AG (United Kingdom)
Based on various researches at Oak Spring University , Thyssenkrupp AG is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing energy prices, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing commodity prices, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Thyssenkrupp AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Thyssenkrupp AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Thyssenkrupp AG 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 Thyssenkrupp AG can be done for the following purposes –
1. Strategic planning of Thyssenkrupp AG
2. Improving business portfolio management of Thyssenkrupp AG
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Thyssenkrupp AG
Strengths of Thyssenkrupp AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Thyssenkrupp AG are -
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Thyssenkrupp AG has clearly differentiated products in the market place. This has enabled Thyssenkrupp AG to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Thyssenkrupp AG to invest into research and development (R&D) and innovation.
Training and development
– Thyssenkrupp AG has one of the best training and development program in Basic Materials 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.
Operational resilience
– The operational resilience strategy of Thyssenkrupp AG comprises – understanding the underlying the factors in the Misc. Fabricated Products 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.
Ability to recruit top talent
– Thyssenkrupp AG is one of the leading players in the Misc. Fabricated Products 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.
Successful track record of launching new products
– Thyssenkrupp AG has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Thyssenkrupp AG 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.
Cross disciplinary teams
– Horizontal connected teams at the Thyssenkrupp AG 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.
Organizational Resilience of Thyssenkrupp AG
– The covid-19 pandemic has put organizational resilience at the centre of everthing Thyssenkrupp AG does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Thyssenkrupp AG 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 Misc. Fabricated Products 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 Misc. Fabricated Products
– Thyssenkrupp AG is one of the leading players in the Misc. Fabricated Products industry in United Kingdom. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Thyssenkrupp AG in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Thyssenkrupp AG is one of the most innovative firm in Misc. Fabricated Products sector.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Thyssenkrupp AG digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Thyssenkrupp AG 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.
Low bargaining power of suppliers
– Suppliers of Thyssenkrupp AG in the Basic Materials sector have low bargaining power. Thyssenkrupp AG has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Thyssenkrupp AG to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Thyssenkrupp AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Thyssenkrupp AG are -
Aligning sales with marketing
– From the outside it seems that Thyssenkrupp AG needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Thyssenkrupp AG can leverage the sales team experience to cultivate customer relationships as Thyssenkrupp AG is planning to shift buying processes online.
High dependence on Thyssenkrupp AG ‘s star products
– The top 2 products and services of Thyssenkrupp AG still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Thyssenkrupp AG has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Thyssenkrupp AG, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. Thyssenkrupp AG has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of United Kingdom, Thyssenkrupp AG needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Thyssenkrupp AG, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
Products dominated business model
– Even though Thyssenkrupp AG has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Thyssenkrupp AG should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Thyssenkrupp AG is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
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 Thyssenkrupp AG supply chain. Even after few cautionary changes, Thyssenkrupp AG is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Thyssenkrupp AG vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Thyssenkrupp AG is just above the Misc. Fabricated Products 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.
Slow decision making process
– As mentioned earlier in the report, Thyssenkrupp AG has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Fabricated Products industry over the last five years. Thyssenkrupp AG 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.
High operating costs
– Compare to the competitors, Thyssenkrupp AG has high operating costs in the Misc. Fabricated Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Thyssenkrupp AG lucrative customers.
Thyssenkrupp AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Thyssenkrupp AG are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Thyssenkrupp AG can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Thyssenkrupp AG in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Thyssenkrupp AG to increase its market reach. Thyssenkrupp AG 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Thyssenkrupp AG 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. Thyssenkrupp AG 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, Thyssenkrupp AG 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 Thyssenkrupp AG to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Thyssenkrupp AG has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Thyssenkrupp AG to build a competitive advantage using analytics. The analytics driven competitive advantage can help Thyssenkrupp AG to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Thyssenkrupp AG 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Thyssenkrupp AG is facing challenges because of the dominance of functional experts in the organization. Thyssenkrupp AG can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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, Thyssenkrupp AG can use these opportunities to build new business models that can help the communities that Thyssenkrupp AG operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Creating value in data economy
– The success of analytics program of Thyssenkrupp AG has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Thyssenkrupp AG to build a more holistic ecosystem for Thyssenkrupp AG products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, 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 Thyssenkrupp AG 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.
Buying journey improvements
– Thyssenkrupp AG can improve the customer journey of consumers in the Misc. Fabricated Products 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Thyssenkrupp AG can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Thyssenkrupp AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Thyssenkrupp AG 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.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Thyssenkrupp AG can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Thyssenkrupp AG may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Fabricated Products sector.
Stagnating economy with rate increase
– Thyssenkrupp AG 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 Misc. Fabricated Products industry.
High dependence on third party suppliers
– Thyssenkrupp AG 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.
Increasing wage structure of Thyssenkrupp AG
– 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 Thyssenkrupp AG.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Thyssenkrupp AG in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
Technology acceleration in Forth Industrial Revolution
– Thyssenkrupp AG has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Thyssenkrupp AG needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Thyssenkrupp AG 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 Thyssenkrupp AG prominent markets.
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 Thyssenkrupp AG in the Misc. Fabricated Products sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Thyssenkrupp AG is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Thyssenkrupp AG 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. Thyssenkrupp AG needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Thyssenkrupp AG Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Thyssenkrupp AG 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 Thyssenkrupp AG 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 Thyssenkrupp AG 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 Thyssenkrupp AG 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 Thyssenkrupp AG needs to make to build a sustainable competitive advantage.