B&M European Value Retail SA (BMEB) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Department & Discount)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for B&M European Value Retail SA (United Kingdom)
Based on various researches at Oak Spring University , B&M European Value Retail SA is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
wage bills are increasing, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of B&M European Value Retail SA
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that B&M European Value Retail SA can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the B&M European Value Retail SA, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which B&M European Value Retail SA 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 B&M European Value Retail SA can be done for the following purposes –
1. Strategic planning of B&M European Value Retail SA
2. Improving business portfolio management of B&M European Value Retail SA
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of B&M European Value Retail SA
Strengths of B&M European Value Retail SA | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of B&M European Value Retail SA are -
Low bargaining power of suppliers
– Suppliers of B&M European Value Retail SA in the Services sector have low bargaining power. B&M European Value Retail SA has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps B&M European Value Retail SA to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of B&M European Value Retail SA
– The covid-19 pandemic has put organizational resilience at the centre of everthing B&M European Value Retail SA does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– B&M European Value Retail SA is present in almost all the verticals within the Retail (Department & Discount) industry. This has provided B&M European Value Retail SA 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.
Effective Research and Development (R&D)
– B&M European Value Retail SA has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – B&M European Value Retail SA staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– B&M European Value Retail SA has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. B&M European Value Retail SA 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.
Ability to recruit top talent
– B&M European Value Retail SA is one of the leading players in the Retail (Department & Discount) 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 Retail (Department & Discount) industry
– B&M European Value Retail SA has clearly differentiated products in the market place. This has enabled B&M European Value Retail SA to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped B&M European Value Retail SA to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of B&M European Value Retail SA comprises – understanding the underlying the factors in the Retail (Department & Discount) 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.
Training and development
– B&M European Value Retail SA has one of the best training and development program in Services 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.
Learning organization
- B&M European Value Retail SA 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 B&M European Value Retail SA is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at B&M European Value Retail SA emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that B&M European Value Retail SA 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.
Cross disciplinary teams
– Horizontal connected teams at the B&M European Value Retail SA 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.
Weaknesses of B&M European Value Retail SA | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of B&M European Value Retail SA are -
High cash cycle compare to competitors
B&M European Value Retail SA has a high cash cycle compare to other players in the Retail (Department & Discount) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Workers concerns about automation
– As automation is fast increasing in the Retail (Department & Discount) industry, B&M European Value Retail SA needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– From the 10K / annual statement of B&M European Value Retail SA, it seems that company is thinking out the frontier risks that can impact Retail (Department & Discount) 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 B&M European Value Retail SA has some of the most successful models in the Retail (Department & Discount) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. B&M European Value Retail SA should strive to include more intangible value offerings along with its core products and services.
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 B&M European Value Retail SA supply chain. Even after few cautionary changes, B&M European Value Retail SA is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left B&M European Value Retail SA vulnerable to further global disruptions in South East Asia.
High dependence on B&M European Value Retail SA ‘s star products
– The top 2 products and services of B&M European Value Retail SA still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though B&M European Value Retail SA has relatively successful track record of launching new products.
Lack of clear differentiation of B&M European Value Retail SA products
– To increase the profitability and margins on the products, B&M European Value Retail SA needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, B&M European Value Retail SA has high operating costs in the Retail (Department & Discount) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract B&M European Value Retail SA lucrative customers.
Increasing silos among functional specialists
– The organizational structure of B&M European Value Retail SA is dominated by functional specialists. It is not different from other players in the Retail (Department & Discount) industry, but B&M European Value Retail SA needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help B&M European Value Retail SA to focus more on services in the Retail (Department & Discount) industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, B&M European Value Retail SA has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Department & Discount) industry over the last five years. B&M European Value Retail SA 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, B&M European Value Retail SA is slow explore the new channels of communication. These new channels of communication can help B&M European Value Retail SA to provide better information regarding Retail (Department & Discount) products and services. It can also build an online community to further reach out to potential customers.
B&M European Value Retail SA Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of B&M European Value Retail SA are -
Leveraging digital technologies
– B&M European Value Retail SA 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.
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 B&M European Value Retail SA 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, B&M European Value Retail SA 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.
Loyalty marketing
– B&M European Value Retail SA has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, B&M European Value Retail SA is facing challenges because of the dominance of functional experts in the organization. B&M European Value Retail SA can utilize new technology in the field of Retail (Department & Discount) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– B&M European Value Retail SA has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled B&M European Value Retail SA to build a competitive advantage using analytics. The analytics driven competitive advantage can help B&M European Value Retail SA to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for B&M European Value Retail SA 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects B&M European Value Retail SA can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– B&M European Value Retail SA can develop new processes and procedures in Retail (Department & Discount) 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.
Building a culture of innovation
– managers at B&M European Value Retail SA 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 Retail (Department & Discount) industry.
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. B&M European Value Retail SA can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Department & Discount) industry, but it has also influenced the consumer preferences. B&M European Value Retail SA can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help B&M European Value Retail SA to increase its market reach. B&M European Value Retail SA 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.
Threats B&M European Value Retail SA External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of B&M European Value Retail SA are -
Regulatory challenges
– B&M European Value Retail SA 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 Retail (Department & Discount) industry regulations.
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 B&M European Value Retail SA business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, B&M European Value Retail SA may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Department & Discount) sector.
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 B&M European Value Retail SA in the Retail (Department & Discount) sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– B&M European Value Retail SA has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, B&M European Value Retail SA needs to keep up with the evolution of technology in the Retail (Department & Discount) 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.
Easy access to finance
– Easy access to finance in Retail (Department & Discount) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. B&M European Value Retail SA can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. B&M European Value Retail SA 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, B&M European Value Retail SA 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 B&M European Value Retail SA prominent markets.
Increasing wage structure of B&M European Value Retail SA
– 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 B&M European Value Retail SA.
High dependence on third party suppliers
– B&M European Value Retail SA 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.
Environmental challenges
– B&M European Value Retail SA 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. B&M European Value Retail SA can take advantage of this fund but it will also bring new competitors in the Retail (Department & Discount) industry.
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.
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 B&M European Value Retail SA.
Weighted SWOT Analysis of B&M European Value Retail SA Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at B&M European Value Retail SA 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 B&M European Value Retail SA 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 B&M European Value Retail SA 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 B&M European Value Retail SA 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 B&M European Value Retail SA needs to make to build a sustainable competitive advantage.