BIC (0MGP) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for BIC (United Kingdom)

Based on various researches at Oak Spring University , BIC is operating in a macro-environment that has been destablized by – increasing commodity prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, technology disruption, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of BIC

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

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

The strengths of BIC are -

Ability to lead change in Office Supplies

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

Superior customer experience

– The customer experience strategy of BIC in Office Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Diverse revenue streams

– BIC is present in almost all the verticals within the Office Supplies industry. This has provided BIC 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.

Digital Transformation in Office Supplies industry

- digital transformation varies from industry to industry. For BIC digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. BIC 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

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

Successful track record of launching new products

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

Analytics focus

– BIC 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 Office Supplies 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.

Innovation driven organization

– BIC is one of the most innovative firm in Office Supplies sector.

Cross disciplinary teams

– Horizontal connected teams at the BIC 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.

Sustainable margins compare to other players in Office Supplies industry

– BIC has clearly differentiated products in the market place. This has enabled BIC to fetch slight price premium compare to the competitors in the Office Supplies industry. The sustainable margins have also helped BIC to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

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

Highly skilled collaborators

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

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

The weaknesses of BIC are -

Ability to respond to the competition

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

Capital Spending Reduction

– Even during the low interest decade, BIC 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 Office Supplies industry using digital technology.

High operating costs

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

Slow decision making process

– As mentioned earlier in the report, BIC has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Supplies industry over the last five years. BIC 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.

Low market penetration in new markets

– Outside its home market of United Kingdom, BIC needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Interest costs

– Compare to the competition, BIC has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Compensation and incentives

– The revenue per employee of BIC is just above the Office Supplies 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.

Employees’ less understanding of BIC strategy

– From the outside it seems that the employees of BIC 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 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 BIC supply chain. Even after few cautionary changes, BIC is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left BIC vulnerable to further global disruptions in South East Asia.

Slow to strategic competitive environment developments

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

High cash cycle compare to competitors

BIC has a high cash cycle compare to other players in the Office Supplies industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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

The opportunities of BIC are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Office Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. BIC 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. BIC 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.

Reforming the budgeting process

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

Better consumer reach

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

Manufacturing automation

– BIC can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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.

Low interest rates

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

Using analytics as competitive advantage

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

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for BIC in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Office Supplies industry, and it will provide faster access to the consumers.

Redefining models of collaboration and team work

– As explained in the weaknesses section, BIC is facing challenges because of the dominance of functional experts in the organization. BIC can utilize new technology in the field of Office Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Buying journey improvements

– BIC can improve the customer journey of consumers in the Office Supplies 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.

Building a culture of innovation

– managers at BIC 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 Office Supplies industry.

Finding new ways to collaborate

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

Learning at scale

– Online learning technologies has now opened space for BIC 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.

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

The threats of BIC 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.

Increasing wage structure of BIC

– 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 BIC.

Increasing international competition and downward pressure on margins

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

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 Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. BIC 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 BIC.

Barriers of entry lowering

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

Environmental challenges

– BIC 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. BIC can take advantage of this fund but it will also bring new competitors in the Office Supplies industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, BIC may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Supplies sector.

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 BIC business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for BIC in Office Supplies industry. The Office Supplies 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.

Regulatory challenges

– BIC 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 Office Supplies industry regulations.

Consumer confidence and its impact on BIC 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 Office Supplies industry and other sectors.

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Weighted SWOT Analysis of BIC Template, Example

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

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