Vitec Group (VTC) SWOT Analysis / TOWS Matrix / MBA Resources
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 energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, technology disruption, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
there is increasing trade war between United States & China, geopolitical disruptions, 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 -
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.
High brand equity
– Vitec Group has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vitec Group to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Vitec Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Photography industry. Secondly the value chain collaborators of Vitec Group have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Vitec Group 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.
– 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.
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.
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.
Organizational Resilience of Vitec Group
– The covid-19 pandemic has put organizational resilience at the centre of everthing Vitec Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Vitec Group is one of the most innovative firm in Photography sector.
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.
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.
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.
Weaknesses of Vitec Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vitec Group are -
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 Vitec Group supply chain. Even after few cautionary changes, Vitec Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vitec Group vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Vitec Group has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Photography industry using digital technology.
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.
– 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.
Slow to strategic competitive environment developments
– As Vitec Group is one of the leading players in the Photography industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Photography industry in last five years.
High cash cycle compare to competitors
Vitec Group has a high cash cycle compare to other players in the Photography industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– From the 10K / annual statement of Vitec Group, it seems that company is thinking out the frontier risks that can impact Photography 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.
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.
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.
Employees’ less understanding of Vitec Group strategy
– From the outside it seems that the employees of Vitec Group 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.
Vitec Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vitec Group are -
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.
– Vitec Group can use the latest technology developments to improve its manufacturing and designing process in Photography 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vitec Group is facing challenges because of the dominance of functional experts in the organization. Vitec Group can utilize new technology in the field of Photography industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vitec Group 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vitec Group can use these opportunities to build new business models that can help the communities that Vitec Group operates in. Secondly it can use opportunities from government spending in Photography sector.
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.
– Vitec Group 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.
Threats Vitec Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vitec Group are -
Technology acceleration in Forth Industrial Revolution
– Vitec Group has witnessed rapid integration of technology during Covid-19 in the Photography industry. As one of the leading players in the industry, Vitec Group needs to keep up with the evolution of technology in the Photography 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.
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.
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.
– Vitec Group 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 Photography industry regulations.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Vitec Group may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Photography sector.
Stagnating economy with rate increase
– Vitec Group 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 Photography industry.
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.
– 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vitec Group in Photography industry. The Photography industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
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.