PostNL (0P47) SWOT Analysis / TOWS Matrix / MBA Resources
Business Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for PostNL (United Kingdom)
Based on various researches at Oak Spring University , PostNL is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, geopolitical disruptions, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 PostNL can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the PostNL, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which PostNL 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 PostNL can be done for the following purposes –
1. Strategic planning of PostNL
2. Improving business portfolio management of PostNL
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of PostNL
Strengths of PostNL | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of PostNL are -
Cross disciplinary teams
– Horizontal connected teams at the PostNL 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)
– PostNL has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – PostNL staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of PostNL in Business Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– PostNL has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled PostNL to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Business Services industry
– PostNL is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Business Services industry
– PostNL has clearly differentiated products in the market place. This has enabled PostNL to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped PostNL to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– PostNL has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of PostNL have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– PostNL 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 Business 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.
Learning organization
- PostNL 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 PostNL is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at PostNL emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– PostNL is present in almost all the verticals within the Business Services industry. This has provided PostNL 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.
Low bargaining power of suppliers
– Suppliers of PostNL in the Services sector have low bargaining power. PostNL has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps PostNL to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– PostNL is one of the leading players in the Business 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.
Weaknesses of PostNL | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of PostNL are -
Increasing silos among functional specialists
– The organizational structure of PostNL is dominated by functional specialists. It is not different from other players in the Business Services industry, but PostNL needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help PostNL to focus more on services in the Business Services industry rather than just following the product oriented approach.
Employees’ less understanding of PostNL strategy
– From the outside it seems that the employees of PostNL 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.
Need for greater diversity
– PostNL 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.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in United Kingdom, PostNL is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Business Services industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, PostNL is slow explore the new channels of communication. These new channels of communication can help PostNL to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As PostNL is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
High cash cycle compare to competitors
PostNL has a high cash cycle compare to other players in the Business Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, PostNL 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.
Lack of clear differentiation of PostNL products
– To increase the profitability and margins on the products, PostNL needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that PostNL needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at PostNL can leverage the sales team experience to cultivate customer relationships as PostNL is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at PostNL, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. PostNL has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
PostNL Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of PostNL are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Business Services industry, but it has also influenced the consumer preferences. PostNL 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 PostNL can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 PostNL 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
– PostNL can improve the customer journey of consumers in the Business Services 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.
Better consumer reach
– The expansion of the 5G network will help PostNL to increase its market reach. PostNL 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.
Loyalty marketing
– PostNL 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.
Building a culture of innovation
– managers at PostNL 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 Business Services industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, PostNL 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 PostNL to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– PostNL can develop new processes and procedures in Business 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, PostNL can use these opportunities to build new business models that can help the communities that PostNL operates in. Secondly it can use opportunities from government spending in Business Services sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for PostNL in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. PostNL 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. PostNL 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for PostNL to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for PostNL to hire the very best people irrespective of their geographical location.
Threats PostNL External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of PostNL are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, PostNL 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 PostNL prominent markets.
Shortening product life cycle
– it is one of the major threat that PostNL is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– PostNL 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, PostNL may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.
Stagnating economy with rate increase
– PostNL 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 Business Services industry.
Increasing wage structure of PostNL
– 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 PostNL.
Environmental challenges
– PostNL 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. PostNL can take advantage of this fund but it will also bring new competitors in the Business Services industry.
Regulatory challenges
– PostNL 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 Business Services industry regulations.
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. PostNL needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents PostNL with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services 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 PostNL in the Business Services 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.
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 PostNL.
Weighted SWOT Analysis of PostNL Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at PostNL 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 PostNL 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 PostNL 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 PostNL 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 PostNL needs to make to build a sustainable competitive advantage.