SWOT Analysis / TOWS Matrix for APM Automotive (Malaysia)
Based on various researches at Oak Spring University , APM Automotive is operating in a macro-environment that has been destablized by – increasing commodity prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing energy prices, technology disruption, increasing household debt because of falling income levels, geopolitical disruptions,
there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that APM Automotive can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the APM Automotive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which APM Automotive 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 APM Automotive can be done for the following purposes –
1. Strategic planning of APM Automotive
2. Improving business portfolio management of APM Automotive
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of APM Automotive
Strengths of APM Automotive | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of APM Automotive are -
Digital Transformation in Textiles - Non Apparel industry
- digital transformation varies from industry to industry. For APM Automotive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. APM Automotive 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
– APM Automotive 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 Textiles - Non Apparel industry. The technology infrastructure of Malaysia 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.
Ability to lead change in Textiles - Non Apparel
– APM Automotive is one of the leading players in the Textiles - Non Apparel industry in Malaysia. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in Malaysia but also across the existing markets. The ability to lead change has enabled APM Automotive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that APM Automotive 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.
Learning organization
- APM Automotive 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 APM Automotive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at APM Automotive emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– APM Automotive has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of APM Automotive have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Textiles - Non Apparel industry
– APM Automotive has clearly differentiated products in the market place. This has enabled APM Automotive to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped APM Automotive to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of APM Automotive in the Consumer Cyclical sector have low bargaining power. APM Automotive has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps APM Automotive to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of APM Automotive
– The covid-19 pandemic has put organizational resilience at the centre of everthing APM Automotive does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of APM Automotive comprises – understanding the underlying the factors in the Textiles - Non Apparel 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.
Effective Research and Development (R&D)
– APM Automotive has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – APM Automotive staying ahead in the Textiles - Non Apparel 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 APM Automotive in Textiles - Non Apparel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of APM Automotive | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of APM Automotive are -
High bargaining power of channel partners in Textiles - Non Apparel industry
– because of the regulatory requirements in Malaysia, APM Automotive 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 Textiles - Non Apparel industry.
Ability to respond to the competition
– As the decision making is very deliberative at APM Automotive, in the dynamic environment of Textiles - Non Apparel industry it has struggled to respond to the nimble upstart competition. APM Automotive has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though APM Automotive has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. APM Automotive 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, APM Automotive is slow explore the new channels of communication. These new channels of communication can help APM Automotive to provide better information regarding Textiles - Non Apparel products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of APM Automotive is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but APM Automotive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help APM Automotive to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at APM Automotive 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 APM Automotive supply chain. Even after few cautionary changes, APM Automotive is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left APM Automotive vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that APM Automotive needs to have more collaboration between its sales team and marketing team. Sales professionals in the Textiles - Non Apparel industry have deep experience in developing customer relationships. Marketing department at APM Automotive can leverage the sales team experience to cultivate customer relationships as APM Automotive is planning to shift buying processes online.
Need for greater diversity
– APM Automotive 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 cash cycle compare to competitors
APM Automotive has a high cash cycle compare to other players in the Textiles - Non Apparel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of APM Automotive products
– To increase the profitability and margins on the products, APM Automotive needs to provide more differentiated products than what it is currently offering in the marketplace.
APM Automotive Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of APM Automotive are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, APM Automotive is facing challenges because of the dominance of functional experts in the organization. APM Automotive can utilize new technology in the field of Textiles - Non Apparel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– APM Automotive has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Textiles - Non Apparel sector. This continuous investment in analytics has enabled APM Automotive to build a competitive advantage using analytics. The analytics driven competitive advantage can help APM Automotive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. APM Automotive can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– APM Automotive can develop new processes and procedures in Textiles - Non Apparel 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.
Better consumer reach
– The expansion of the 5G network will help APM Automotive to increase its market reach. APM Automotive 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.
Use of Bitcoin and other crypto currencies for transactions in Textiles - Non Apparel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for APM Automotive in the Textiles - Non Apparel industry. Now APM Automotive can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– APM Automotive 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects APM Automotive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Textiles - Non Apparel industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. APM Automotive 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. APM Automotive 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.
Creating value in data economy
– The success of analytics program of APM Automotive has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help APM Automotive to build a more holistic ecosystem for APM Automotive products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, APM Automotive 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.
Building a culture of innovation
– managers at APM Automotive 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 Textiles - Non Apparel industry.
Learning at scale
– Online learning technologies has now opened space for APM Automotive 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.
Threats APM Automotive External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of APM Automotive are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for APM Automotive in Textiles - Non Apparel industry. The Textiles - Non Apparel 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.
Increasing wage structure of APM Automotive
– 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 APM Automotive.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, APM Automotive may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel 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 APM Automotive 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 Textiles - Non Apparel industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents APM Automotive with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel 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 APM Automotive in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Environmental challenges
– APM Automotive 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. APM Automotive can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
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.
Shortening product life cycle
– it is one of the major threat that APM Automotive is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– APM Automotive has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, APM Automotive needs to keep up with the evolution of technology in the Textiles - Non Apparel 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.
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. APM Automotive needs to understand the core reasons impacting the Textiles - Non Apparel industry. This will help it in building a better workplace.
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. APM Automotive 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.
Weighted SWOT Analysis of APM Automotive Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at APM Automotive 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 APM Automotive 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 APM Automotive 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 APM Automotive 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 APM Automotive needs to make to build a sustainable competitive advantage.
