SWOT Analysis / TOWS Matrix for Buzzi Unicem (United Kingdom)
Based on various researches at Oak Spring University , Buzzi Unicem is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing energy prices, central banks are concerned over increasing inflation,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Buzzi Unicem can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Buzzi Unicem, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Buzzi Unicem 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 Buzzi Unicem can be done for the following purposes –
1. Strategic planning of Buzzi Unicem
2. Improving business portfolio management of Buzzi Unicem
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Buzzi Unicem
Strengths of Buzzi Unicem | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Buzzi Unicem are -
Ability to recruit top talent
– Buzzi Unicem is one of the leading players in the Construction - Raw Materials 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.
Innovation driven organization
– Buzzi Unicem is one of the most innovative firm in Construction - Raw Materials sector.
Digital Transformation in Construction - Raw Materials industry
- digital transformation varies from industry to industry. For Buzzi Unicem digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Buzzi Unicem 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.
Cross disciplinary teams
– Horizontal connected teams at the Buzzi Unicem 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.
Effective Research and Development (R&D)
– Buzzi Unicem has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Buzzi Unicem staying ahead in the Construction - Raw Materials industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Buzzi Unicem in the Capital Goods sector have low bargaining power. Buzzi Unicem has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Buzzi Unicem to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Buzzi Unicem has one of the best training and development program in Capital Goods 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.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Buzzi Unicem has clearly differentiated products in the market place. This has enabled Buzzi Unicem to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Buzzi Unicem to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Buzzi Unicem comprises – understanding the underlying the factors in the Construction - Raw Materials 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.
High switching costs
– The high switching costs that Buzzi Unicem 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.
High brand equity
– Buzzi Unicem has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Buzzi Unicem to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Buzzi Unicem 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 Buzzi Unicem is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Buzzi Unicem emphasize – knowledge, initiative, and innovation.
Weaknesses of Buzzi Unicem | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Buzzi Unicem are -
Compensation and incentives
– The revenue per employee of Buzzi Unicem is just above the Construction - Raw Materials 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.
High dependence on Buzzi Unicem ‘s star products
– The top 2 products and services of Buzzi Unicem still accounts for major business revenue. This dependence on star products in Construction - Raw Materials industry has resulted into insufficient focus on developing new products, even though Buzzi Unicem has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Buzzi Unicem is slow explore the new channels of communication. These new channels of communication can help Buzzi Unicem to provide better information regarding Construction - Raw Materials products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Buzzi Unicem needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction - Raw Materials industry have deep experience in developing customer relationships. Marketing department at Buzzi Unicem can leverage the sales team experience to cultivate customer relationships as Buzzi Unicem is planning to shift buying processes online.
Employees’ less understanding of Buzzi Unicem strategy
– From the outside it seems that the employees of Buzzi Unicem 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.
Slow to strategic competitive environment developments
– As Buzzi Unicem is one of the leading players in the Construction - Raw Materials industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction - Raw Materials industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Buzzi Unicem, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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.
Lack of clear differentiation of Buzzi Unicem products
– To increase the profitability and margins on the products, Buzzi Unicem needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Buzzi Unicem has high operating costs in the Construction - Raw Materials industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Buzzi Unicem lucrative customers.
High cash cycle compare to competitors
Buzzi Unicem has a high cash cycle compare to other players in the Construction - Raw Materials 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 Construction - Raw Materials industry, Buzzi Unicem 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.
Buzzi Unicem Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Buzzi Unicem are -
Better consumer reach
– The expansion of the 5G network will help Buzzi Unicem to increase its market reach. Buzzi Unicem 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.
Leveraging digital technologies
– Buzzi Unicem 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.
Manufacturing automation
– Buzzi Unicem can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.
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. Buzzi Unicem can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Buzzi Unicem 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 Construction - Raw Materials industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Buzzi Unicem is facing challenges because of the dominance of functional experts in the organization. Buzzi Unicem can utilize new technology in the field of Construction - Raw Materials industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction - Raw Materials industry, but it has also influenced the consumer preferences. Buzzi Unicem can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Buzzi Unicem 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
– Buzzi Unicem can develop new processes and procedures in Construction - Raw Materials 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.
Learning at scale
– Online learning technologies has now opened space for Buzzi Unicem 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Buzzi Unicem can use these opportunities to build new business models that can help the communities that Buzzi Unicem operates in. Secondly it can use opportunities from government spending in Construction - Raw Materials sector.
Using analytics as competitive advantage
– Buzzi Unicem has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction - Raw Materials sector. This continuous investment in analytics has enabled Buzzi Unicem to build a competitive advantage using analytics. The analytics driven competitive advantage can help Buzzi Unicem to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Buzzi Unicem 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.
Threats Buzzi Unicem External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Buzzi Unicem are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Buzzi Unicem with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
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. Buzzi Unicem needs to understand the core reasons impacting the Construction - Raw Materials industry. This will help it in building a better workplace.
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 Buzzi Unicem.
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.
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 Buzzi Unicem in the Construction - Raw Materials sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Buzzi Unicem has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Buzzi Unicem needs to keep up with the evolution of technology in the Construction - Raw Materials 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, Buzzi Unicem 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 Buzzi Unicem prominent markets.
Consumer confidence and its impact on Buzzi Unicem 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 Construction - Raw Materials industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Buzzi Unicem is facing in Construction - Raw Materials 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 Buzzi Unicem business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Buzzi Unicem 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 Construction - Raw Materials industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Buzzi Unicem may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials sector.
Easy access to finance
– Easy access to finance in Construction - Raw Materials industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Buzzi Unicem can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Buzzi Unicem Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Buzzi Unicem 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 Buzzi Unicem 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 Buzzi Unicem 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 Buzzi Unicem 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 Buzzi Unicem needs to make to build a sustainable competitive advantage.