Synectics (SNXS) SWOT Analysis / TOWS Matrix / MBA Resources
Security Systems & Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Synectics (United Kingdom)
Based on various researches at Oak Spring University , Synectics is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
technology disruption, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Synectics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Synectics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Synectics 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 Synectics can be done for the following purposes –
1. Strategic planning of Synectics
2. Improving business portfolio management of Synectics
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 Synectics
Strengths of Synectics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Synectics are -
Successful track record of launching new products
– Synectics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Synectics 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.
Training and development
– Synectics 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.
Digital Transformation in Security Systems & Services industry
- digital transformation varies from industry to industry. For Synectics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Synectics 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.
High switching costs
– The high switching costs that Synectics 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.
Superior customer experience
– The customer experience strategy of Synectics in Security Systems & Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Synectics 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.
Effective Research and Development (R&D)
– Synectics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Synectics staying ahead in the Security Systems & Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Synectics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Synectics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Security Systems & Services industry
– Synectics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Synectics is present in almost all the verticals within the Security Systems & Services industry. This has provided Synectics 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.
Innovation driven organization
– Synectics is one of the most innovative firm in Security Systems & Services sector.
Sustainable margins compare to other players in Security Systems & Services industry
– Synectics has clearly differentiated products in the market place. This has enabled Synectics to fetch slight price premium compare to the competitors in the Security Systems & Services industry. The sustainable margins have also helped Synectics to invest into research and development (R&D) and innovation.
Weaknesses of Synectics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Synectics 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 Synectics supply chain. Even after few cautionary changes, Synectics is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Synectics vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Synectics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Security Systems & Services industry have deep experience in developing customer relationships. Marketing department at Synectics can leverage the sales team experience to cultivate customer relationships as Synectics is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of United Kingdom, Synectics needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Synectics 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. Synectics should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Synectics is slow explore the new channels of communication. These new channels of communication can help Synectics to provide better information regarding Security Systems & Services products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Synectics, in the dynamic environment of Security Systems & Services industry it has struggled to respond to the nimble upstart competition. Synectics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Security Systems & Services industry
– The stress on hiring functional specialists at Synectics 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 operating costs
– Compare to the competitors, Synectics has high operating costs in the Security Systems & Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Synectics lucrative customers.
Compensation and incentives
– The revenue per employee of Synectics 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.
Interest costs
– Compare to the competition, Synectics 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.
Increasing silos among functional specialists
– The organizational structure of Synectics is dominated by functional specialists. It is not different from other players in the Security Systems & Services industry, but Synectics needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Synectics to focus more on services in the Security Systems & Services industry rather than just following the product oriented approach.
Synectics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Synectics are -
Using analytics as competitive advantage
– Synectics 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 Synectics to build a competitive advantage using analytics. The analytics driven competitive advantage can help Synectics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Synectics 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.
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 Synectics in the Security Systems & Services industry. Now Synectics can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Synectics 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Synectics 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.
Creating value in data economy
– The success of analytics program of Synectics has opened avenues for new revenue streams for the organization in Security Systems & Services industry. This can help Synectics to build a more holistic ecosystem for Synectics products in the Security Systems & Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Synectics 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 Synectics 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
– Synectics 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.
Buying journey improvements
– Synectics can improve the customer journey of consumers in the Security Systems & 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.
Learning at scale
– Online learning technologies has now opened space for Synectics 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.
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. Synectics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Synectics 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 Synectics to hire the very best people irrespective of their geographical location.
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. Synectics can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Synectics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Synectics are -
Easy access to finance
– Easy access to finance in Security Systems & Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Synectics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Synectics is facing in Security Systems & Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Synectics 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.
Stagnating economy with rate increase
– Synectics 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 Security Systems & Services industry.
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. Synectics 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Synectics 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 Synectics prominent markets.
Regulatory challenges
– Synectics 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 Security Systems & Services industry regulations.
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 Synectics in the Security Systems & Services sector and impact the bottomline of the organization.
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 Synectics business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Synectics
– 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 Synectics.
Consumer confidence and its impact on Synectics 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 Security Systems & Services industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Synectics in Security Systems & Services industry. The Security Systems & 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.
High dependence on third party suppliers
– Synectics 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.
Weighted SWOT Analysis of Synectics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Synectics 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 Synectics 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 Synectics 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 Synectics 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 Synectics needs to make to build a sustainable competitive advantage.