G4S (GFS) SWOT Analysis / TOWS Matrix / MBA Resources
Security Systems & Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for G4S (United Kingdom)
Based on various researches at Oak Spring University , G4S is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that G4S can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the G4S, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which G4S 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 G4S can be done for the following purposes –
1. Strategic planning of G4S
2. Improving business portfolio management of G4S
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Security Systems & Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of G4S
Strengths of G4S | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of G4S are -
Successful track record of launching new products
– G4S has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. G4S 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.
Sustainable margins compare to other players in Security Systems & Services industry
– G4S has clearly differentiated products in the market place. This has enabled G4S to fetch slight price premium compare to the competitors in the Security Systems & Services industry. The sustainable margins have also helped G4S to invest into research and development (R&D) and innovation.
Analytics focus
– G4S 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 Security Systems & Services 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.
Digital Transformation in Security Systems & Services industry
- digital transformation varies from industry to industry. For G4S digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. G4S has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of G4S in the Services sector have low bargaining power. G4S has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps G4S to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the G4S 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.
Highly skilled collaborators
– G4S has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Security Systems & Services industry. Secondly the value chain collaborators of G4S have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– G4S is one of the most innovative firm in Security Systems & Services sector.
High switching costs
– The high switching costs that G4S 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
– G4S 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.
Ability to recruit top talent
– G4S is one of the leading players in the Security Systems & Services 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.
Diverse revenue streams
– G4S is present in almost all the verticals within the Security Systems & Services industry. This has provided G4S 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.
Weaknesses of G4S | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of G4S are -
Low market penetration in new markets
– Outside its home market of United Kingdom, G4S needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Security Systems & Services industry
– The stress on hiring functional specialists at G4S 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.
Slow to strategic competitive environment developments
– As G4S is one of the leading players in the Security Systems & Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Security Systems & Services industry in last five years.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of G4S supply chain. Even after few cautionary changes, G4S is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left G4S vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of G4S is just above the Security Systems & Services 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.
No frontier risks strategy
– From the 10K / annual statement of G4S, it seems that company is thinking out the frontier risks that can impact Security Systems & Services 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.
Need for greater diversity
– G4S 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.
Employees’ less understanding of G4S strategy
– From the outside it seems that the employees of G4S 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 G4S ‘s star products
– The top 2 products and services of G4S still accounts for major business revenue. This dependence on star products in Security Systems & Services industry has resulted into insufficient focus on developing new products, even though G4S has relatively successful track record of launching new products.
Lack of clear differentiation of G4S products
– To increase the profitability and margins on the products, G4S needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though G4S has some of the most successful models in the Security Systems & Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. G4S should strive to include more intangible value offerings along with its core products and services.
G4S Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of G4S are -
Building a culture of innovation
– managers at G4S 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 Security Systems & Services industry.
Creating value in data economy
– The success of analytics program of G4S has opened avenues for new revenue streams for the organization in Security Systems & Services industry. This can help G4S to build a more holistic ecosystem for G4S products in the Security Systems & Services industry by providing – data insight services, data privacy related products, data based consulting services, 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. G4S 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 Security Systems & Services industry, but it has also influenced the consumer preferences. G4S can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, G4S can use these opportunities to build new business models that can help the communities that G4S operates in. Secondly it can use opportunities from government spending in Security Systems & Services sector.
Use of Bitcoin and other crypto currencies for transactions in Security Systems & Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for G4S in the Security Systems & Services industry. Now G4S can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– G4S has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Security Systems & Services sector. This continuous investment in analytics has enabled G4S to build a competitive advantage using analytics. The analytics driven competitive advantage can help G4S to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– G4S 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Security Systems & Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. G4S 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. G4S 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for G4S in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Security Systems & Services industry, and it will provide faster access to the consumers.
Manufacturing automation
– G4S can use the latest technology developments to improve its manufacturing and designing process in Security Systems & Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects G4S 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
– G4S can develop new processes and procedures in Security Systems & Services 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.
Threats G4S External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of G4S are -
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. G4S 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.
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 G4S in the Security Systems & Services sector and impact the bottomline 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 G4S.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Security Systems & Services industry are lowering. It can presents G4S with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Security Systems & Services 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. G4S needs to understand the core reasons impacting the Security Systems & Services industry. This will help it in building a better workplace.
Increasing wage structure of G4S
– 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 G4S.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, G4S may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Security Systems & Services sector.
High dependence on third party suppliers
– G4S 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.
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.
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 G4S 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, G4S 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 G4S prominent markets.
Environmental challenges
– G4S 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. G4S can take advantage of this fund but it will also bring new competitors in the Security Systems & Services industry.
Weighted SWOT Analysis of G4S Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at G4S 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 G4S 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 G4S 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 G4S 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 G4S needs to make to build a sustainable competitive advantage.