Based on various researches at Oak Spring University , Magnitogorskiy Metallurgichesk DRC is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, 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, geopolitical disruptions, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of Magnitogorskiy Metallurgichesk DRC
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Magnitogorskiy Metallurgichesk DRC can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Magnitogorskiy Metallurgichesk DRC, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC can be done for the following purposes –
1. Strategic planning of Magnitogorskiy Metallurgichesk DRC
2. Improving business portfolio management of Magnitogorskiy Metallurgichesk DRC
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Magnitogorskiy Metallurgichesk DRC
Strengths of Magnitogorskiy Metallurgichesk DRC | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Magnitogorskiy Metallurgichesk DRC are -
Digital Transformation in industry
- digital transformation varies from industry to industry. For Magnitogorskiy Metallurgichesk DRC digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Magnitogorskiy Metallurgichesk DRC 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.
High brand equity
– Magnitogorskiy Metallurgichesk DRC has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Magnitogorskiy Metallurgichesk DRC to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Magnitogorskiy Metallurgichesk DRC emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Magnitogorskiy Metallurgichesk DRC has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Magnitogorskiy Metallurgichesk DRC staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC
– The covid-19 pandemic has put organizational resilience at the centre of everthing Magnitogorskiy Metallurgichesk DRC does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Magnitogorskiy Metallurgichesk DRC 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.
Training and development
– Magnitogorskiy Metallurgichesk DRC has one of the best training and development program in 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.
Strong track record of project management in the industry
– Magnitogorskiy Metallurgichesk DRC is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Magnitogorskiy Metallurgichesk DRC is one of the most innovative firm in sector.
Ability to recruit top talent
– Magnitogorskiy Metallurgichesk DRC is one of the leading players in the 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.
Sustainable margins compare to other players in industry
– Magnitogorskiy Metallurgichesk DRC has clearly differentiated products in the market place. This has enabled Magnitogorskiy Metallurgichesk DRC to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Magnitogorskiy Metallurgichesk DRC to invest into research and development (R&D) and innovation.
Weaknesses of Magnitogorskiy Metallurgichesk DRC | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Magnitogorskiy Metallurgichesk DRC are -
Aligning sales with marketing
– From the outside it seems that Magnitogorskiy Metallurgichesk DRC needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Magnitogorskiy Metallurgichesk DRC can leverage the sales team experience to cultivate customer relationships as Magnitogorskiy Metallurgichesk DRC is planning to shift buying processes online.
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 Magnitogorskiy Metallurgichesk DRC supply chain. Even after few cautionary changes, Magnitogorskiy Metallurgichesk DRC is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Magnitogorskiy Metallurgichesk DRC vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Magnitogorskiy Metallurgichesk DRC is just above the 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.
Capital Spending Reduction
– Even during the low interest decade, Magnitogorskiy Metallurgichesk DRC has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Need for greater diversity
– Magnitogorskiy Metallurgichesk DRC 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.
Products dominated business model
– Even though Magnitogorskiy Metallurgichesk DRC has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Magnitogorskiy Metallurgichesk DRC should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of Magnitogorskiy Metallurgichesk DRC, it seems that company is thinking out the frontier risks that can impact 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.
Skills based hiring in industry
– The stress on hiring functional specialists at Magnitogorskiy Metallurgichesk DRC has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ less understanding of Magnitogorskiy Metallurgichesk DRC strategy
– From the outside it seems that the employees of Magnitogorskiy Metallurgichesk DRC 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.
Lack of clear differentiation of Magnitogorskiy Metallurgichesk DRC products
– To increase the profitability and margins on the products, Magnitogorskiy Metallurgichesk DRC needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Magnitogorskiy Metallurgichesk DRC is dominated by functional specialists. It is not different from other players in the industry, but Magnitogorskiy Metallurgichesk DRC needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Magnitogorskiy Metallurgichesk DRC to focus more on services in the industry rather than just following the product oriented approach.
Magnitogorskiy Metallurgichesk DRC Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Magnitogorskiy Metallurgichesk DRC are -
Manufacturing automation
– Magnitogorskiy Metallurgichesk DRC can use the latest technology developments to improve its manufacturing and designing process in 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Magnitogorskiy Metallurgichesk DRC can use these opportunities to build new business models that can help the communities that Magnitogorskiy Metallurgichesk DRC operates in. Secondly it can use opportunities from government spending in sector.
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 Magnitogorskiy Metallurgichesk DRC 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
– Magnitogorskiy Metallurgichesk DRC can improve the customer journey of consumers in the 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Magnitogorskiy Metallurgichesk DRC in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Magnitogorskiy Metallurgichesk DRC can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Magnitogorskiy Metallurgichesk DRC has opened avenues for new revenue streams for the organization in industry. This can help Magnitogorskiy Metallurgichesk DRC to build a more holistic ecosystem for Magnitogorskiy Metallurgichesk DRC products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Magnitogorskiy Metallurgichesk DRC 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Magnitogorskiy Metallurgichesk DRC in the industry. Now Magnitogorskiy Metallurgichesk DRC can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Magnitogorskiy Metallurgichesk DRC can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Magnitogorskiy Metallurgichesk DRC can develop new processes and procedures in 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.
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. Magnitogorskiy Metallurgichesk DRC can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Magnitogorskiy Metallurgichesk DRC External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Magnitogorskiy Metallurgichesk DRC are -
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. Magnitogorskiy Metallurgichesk DRC needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Environmental challenges
– Magnitogorskiy Metallurgichesk DRC 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. Magnitogorskiy Metallurgichesk DRC can take advantage of this fund but it will also bring new competitors in the industry.
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.
Consumer confidence and its impact on Magnitogorskiy Metallurgichesk DRC 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 industry and other sectors.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Magnitogorskiy Metallurgichesk DRC can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Magnitogorskiy Metallurgichesk DRC.
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 Magnitogorskiy Metallurgichesk DRC business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC in the sector and impact the bottomline of the organization.
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.
Regulatory challenges
– Magnitogorskiy Metallurgichesk DRC 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 industry regulations.
Shortening product life cycle
– it is one of the major threat that Magnitogorskiy Metallurgichesk DRC is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Magnitogorskiy Metallurgichesk DRC
– 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 Magnitogorskiy Metallurgichesk DRC.
Weighted SWOT Analysis of Magnitogorskiy Metallurgichesk DRC Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC 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 Magnitogorskiy Metallurgichesk DRC needs to make to build a sustainable competitive advantage.