Vitec Group (VTC) SWOT Analysis / TOWS Matrix / MBA Resources
Photography
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Vitec Group (United Kingdom)
Based on various researches at Oak Spring University , Vitec Group is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing energy prices, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Vitec Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vitec Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vitec Group 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 Vitec Group can be done for the following purposes –
1. Strategic planning of Vitec Group
2. Improving business portfolio management of Vitec Group
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Photography sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vitec Group
Strengths of Vitec Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vitec Group are -
Cross disciplinary teams
– Horizontal connected teams at the Vitec Group 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.
Low bargaining power of suppliers
– Suppliers of Vitec Group in the Consumer Cyclical sector have low bargaining power. Vitec Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vitec Group to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Vitec Group is one of the leading players in the Photography 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.
Digital Transformation in Photography industry
- digital transformation varies from industry to industry. For Vitec Group digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vitec Group 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.
Analytics focus
– Vitec Group 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 Photography 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.
Operational resilience
– The operational resilience strategy of Vitec Group comprises – understanding the underlying the factors in the Photography 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.
Ability to lead change in Photography
– Vitec Group is one of the leading players in the Photography industry in United Kingdom. Over the years it has not only transformed the business landscape in the Photography industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Vitec Group 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 Vitec Group in Photography industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Vitec Group has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vitec Group 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.
Effective Research and Development (R&D)
– Vitec Group has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Vitec Group staying ahead in the Photography industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Vitec Group is present in almost all the verticals within the Photography industry. This has provided Vitec Group 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.
Training and development
– Vitec Group has one of the best training and development program in Consumer Cyclical 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.
Weaknesses of Vitec Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vitec Group are -
Skills based hiring in Photography industry
– The stress on hiring functional specialists at Vitec Group 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.
Need for greater diversity
– Vitec Group 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.
Ability to respond to the competition
– As the decision making is very deliberative at Vitec Group, in the dynamic environment of Photography industry it has struggled to respond to the nimble upstart competition. Vitec Group has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of United Kingdom, Vitec Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Vitec Group products
– To increase the profitability and margins on the products, Vitec Group needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Vitec Group 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.
High dependence on Vitec Group ‘s star products
– The top 2 products and services of Vitec Group still accounts for major business revenue. This dependence on star products in Photography industry has resulted into insufficient focus on developing new products, even though Vitec Group has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Vitec Group is just above the Photography 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.
Products dominated business model
– Even though Vitec Group has some of the most successful models in the Photography industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Vitec Group should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Vitec Group has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Photography industry over the last five years. Vitec Group 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.
Workers concerns about automation
– As automation is fast increasing in the Photography industry, Vitec Group 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.
Vitec Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vitec Group are -
Leveraging digital technologies
– Vitec Group 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.
Learning at scale
– Online learning technologies has now opened space for Vitec Group 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.
Building a culture of innovation
– managers at Vitec Group 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 Photography industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Photography industry, but it has also influenced the consumer preferences. Vitec Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Vitec Group 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.
Using analytics as competitive advantage
– Vitec Group has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Photography sector. This continuous investment in analytics has enabled Vitec Group to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vitec Group to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Vitec Group can develop new processes and procedures in Photography 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.
Creating value in data economy
– The success of analytics program of Vitec Group has opened avenues for new revenue streams for the organization in Photography industry. This can help Vitec Group to build a more holistic ecosystem for Vitec Group products in the Photography industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vitec Group 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 Vitec Group to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vitec Group 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 Vitec Group to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Photography industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vitec Group 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. Vitec Group 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 Vitec Group in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Photography industry, and it will provide faster access to the consumers.
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. Vitec Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Vitec Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vitec Group are -
Environmental challenges
– Vitec Group 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. Vitec Group can take advantage of this fund but it will also bring new competitors in the Photography industry.
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 Vitec Group business can come under increasing regulations regarding data privacy, data security, etc.
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. Vitec Group 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.
Easy access to finance
– Easy access to finance in Photography industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vitec Group can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Vitec Group needs to understand the core reasons impacting the Photography industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Photography industry are lowering. It can presents Vitec Group with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Photography sector.
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.
Consumer confidence and its impact on Vitec Group 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 Photography industry and other sectors.
High dependence on third party suppliers
– Vitec Group 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.
Shortening product life cycle
– it is one of the major threat that Vitec Group is facing in Photography sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Vitec Group in the Photography sector and impact the bottomline of the organization.
Increasing wage structure of Vitec Group
– 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 Vitec Group.
Weighted SWOT Analysis of Vitec Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Vitec Group 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 Vitec Group 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 Vitec Group 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 Vitec Group 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 Vitec Group needs to make to build a sustainable competitive advantage.