On The Beach (OTB) SWOT Analysis / TOWS Matrix / MBA Resources
Personal Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for On The Beach (United Kingdom)
Based on various researches at Oak Spring University , On The Beach is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that On The Beach can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the On The Beach, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which On The Beach 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 On The Beach can be done for the following purposes –
1. Strategic planning of On The Beach
2. Improving business portfolio management of On The Beach
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of On The Beach
Strengths of On The Beach | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of On The Beach are -
Training and development
– On The Beach 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
– On The Beach is one of the leading players in the Personal 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
– On The Beach is present in almost all the verticals within the Personal Services industry. This has provided On The Beach 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.
Analytics focus
– On The Beach 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 Personal 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
- On The Beach 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 On The Beach is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at On The Beach emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– On The Beach is one of the most innovative firm in Personal Services sector.
Effective Research and Development (R&D)
– On The Beach has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – On The Beach staying ahead in the Personal Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– On The Beach has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled On The Beach to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– On The Beach has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. On The Beach 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.
Low bargaining power of suppliers
– Suppliers of On The Beach in the Services sector have low bargaining power. On The Beach has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps On The Beach to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the On The Beach 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.
Ability to lead change in Personal Services
– On The Beach is one of the leading players in the Personal Services industry in United Kingdom. Over the years it has not only transformed the business landscape in the Personal Services industry in United Kingdom but also across the existing markets. The ability to lead change has enabled On The Beach in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of On The Beach | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of On The Beach are -
Products dominated business model
– Even though On The Beach has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. On The Beach should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of On The Beach, it seems that company is thinking out the frontier risks that can impact Personal 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.
Low market penetration in new markets
– Outside its home market of United Kingdom, On The Beach needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at On The Beach, in the dynamic environment of Personal Services industry it has struggled to respond to the nimble upstart competition. On The Beach has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of On The Beach products
– To increase the profitability and margins on the products, On The Beach needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, On The Beach 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 Personal Services industry using digital technology.
Skills based hiring in Personal Services industry
– The stress on hiring functional specialists at On The Beach 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.
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 On The Beach supply chain. Even after few cautionary changes, On The Beach is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left On The Beach vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, On The Beach is slow explore the new channels of communication. These new channels of communication can help On The Beach to provide better information regarding Personal Services products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
On The Beach has a high cash cycle compare to other players in the Personal 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.
High dependence on On The Beach ‘s star products
– The top 2 products and services of On The Beach still accounts for major business revenue. This dependence on star products in Personal Services industry has resulted into insufficient focus on developing new products, even though On The Beach has relatively successful track record of launching new products.
On The Beach Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of On The Beach are -
Use of Bitcoin and other crypto currencies for transactions in Personal Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for On The Beach in the Personal Services industry. Now On The Beach can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal Services industry, but it has also influenced the consumer preferences. On The Beach can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– On The Beach can use the latest technology developments to improve its manufacturing and designing process in Personal 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, On The Beach 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.
Loyalty marketing
– On The Beach 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.
Using analytics as competitive advantage
– On The Beach has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal Services sector. This continuous investment in analytics has enabled On The Beach to build a competitive advantage using analytics. The analytics driven competitive advantage can help On The Beach to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for On The Beach in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal Services industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects On The Beach can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– On The Beach can improve the customer journey of consumers in the Personal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, On The Beach 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 On The Beach to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for On The Beach 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 On The Beach to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for On The Beach 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, On The Beach is facing challenges because of the dominance of functional experts in the organization. On The Beach can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats On The Beach External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of On The Beach are -
Stagnating economy with rate increase
– On The Beach 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 Personal Services industry.
Technology acceleration in Forth Industrial Revolution
– On The Beach has witnessed rapid integration of technology during Covid-19 in the Personal Services industry. As one of the leading players in the industry, On The Beach needs to keep up with the evolution of technology in the Personal Services 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.
Increasing wage structure of On The Beach
– 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 On The Beach.
High dependence on third party suppliers
– On The Beach 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.
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. On The Beach 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.
Shortening product life cycle
– it is one of the major threat that On The Beach is facing in Personal Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for On The Beach in Personal Services industry. The Personal Services 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, On The Beach 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 On The Beach prominent markets.
Easy access to finance
– Easy access to finance in Personal Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. On The Beach can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on On The Beach 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 Personal Services industry and other sectors.
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 On The Beach in the Personal Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of On The Beach Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at On The Beach 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 On The Beach 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 On The Beach 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 On The Beach 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 On The Beach needs to make to build a sustainable competitive advantage.
