Fiamma (FIAM) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Fiamma (Malaysia)

Based on various researches at Oak Spring University , Fiamma is operating in a macro-environment that has been destablized by – wage bills are increasing, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, technology disruption, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Fiamma

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fiamma can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fiamma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fiamma 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Fiamma can be done for the following purposes –
1. Strategic planning of Fiamma
2. Improving business portfolio management of Fiamma
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fiamma

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Strengths of Fiamma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Fiamma are -

Organizational Resilience of Fiamma

– The covid-19 pandemic has put organizational resilience at the centre of everthing Fiamma does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Successful track record of launching new products

– Fiamma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fiamma 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.

High switching costs

– The high switching costs that Fiamma 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.

Highly skilled collaborators

– Fiamma has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Appliance & Tool industry. Secondly the value chain collaborators of Fiamma have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Fiamma in Appliance & Tool industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High brand equity

– Fiamma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fiamma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– Fiamma is present in almost all the verticals within the Appliance & Tool industry. This has provided Fiamma 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

– Fiamma 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.

Cross disciplinary teams

– Horizontal connected teams at the Fiamma 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.

Effective Research and Development (R&D)

– Fiamma has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Fiamma staying ahead in the Appliance & Tool industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Digital Transformation in Appliance & Tool industry

- digital transformation varies from industry to industry. For Fiamma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fiamma 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.

Innovation driven organization

– Fiamma is one of the most innovative firm in Appliance & Tool sector.

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Weaknesses of Fiamma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Fiamma are -

No frontier risks strategy

– From the 10K / annual statement of Fiamma, it seems that company is thinking out the frontier risks that can impact Appliance & Tool 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.

Capital Spending Reduction

– Even during the low interest decade, Fiamma 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 Appliance & Tool industry using digital technology.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fiamma is slow explore the new channels of communication. These new channels of communication can help Fiamma to provide better information regarding Appliance & Tool products and services. It can also build an online community to further reach out to potential customers.

High dependence on Fiamma ‘s star products

– The top 2 products and services of Fiamma still accounts for major business revenue. This dependence on star products in Appliance & Tool industry has resulted into insufficient focus on developing new products, even though Fiamma has relatively successful track record of launching new products.

Increasing silos among functional specialists

– The organizational structure of Fiamma is dominated by functional specialists. It is not different from other players in the Appliance & Tool industry, but Fiamma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fiamma to focus more on services in the Appliance & Tool industry rather than just following the product oriented approach.

Products dominated business model

– Even though Fiamma has some of the most successful models in the Appliance & Tool industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Fiamma should strive to include more intangible value offerings along with its core products and services.

Skills based hiring in Appliance & Tool industry

– The stress on hiring functional specialists at Fiamma 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, Fiamma has high operating costs in the Appliance & Tool industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fiamma lucrative customers.

Ability to respond to the competition

– As the decision making is very deliberative at Fiamma, in the dynamic environment of Appliance & Tool industry it has struggled to respond to the nimble upstart competition. Fiamma has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High bargaining power of channel partners in Appliance & Tool industry

– because of the regulatory requirements in Malaysia, Fiamma 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 Appliance & Tool industry.

Employees’ less understanding of Fiamma strategy

– From the outside it seems that the employees of Fiamma 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.

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Fiamma Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Fiamma are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fiamma 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 Fiamma to hire the very best people irrespective of their geographical location.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Appliance & Tool industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fiamma 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. Fiamma 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 Fiamma 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Fiamma 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Fiamma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Appliance & Tool industry, and it will provide faster access to the consumers.

Leveraging digital technologies

– Fiamma 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 Fiamma 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Appliance & Tool industry, but it has also influenced the consumer preferences. Fiamma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

– The success of analytics program of Fiamma has opened avenues for new revenue streams for the organization in Appliance & Tool industry. This can help Fiamma to build a more holistic ecosystem for Fiamma products in the Appliance & Tool industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fiamma can use these opportunities to build new business models that can help the communities that Fiamma operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Fiamma can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Better consumer reach

– The expansion of the 5G network will help Fiamma to increase its market reach. Fiamma 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.

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. Fiamma can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Fiamma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Fiamma are -

Regulatory challenges

– Fiamma 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 Appliance & Tool industry regulations.

Technology acceleration in Forth Industrial Revolution

– Fiamma has witnessed rapid integration of technology during Covid-19 in the Appliance & Tool industry. As one of the leading players in the industry, Fiamma needs to keep up with the evolution of technology in the Appliance & Tool 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.

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 Fiamma in the Appliance & Tool sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Fiamma 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 Appliance & Tool industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Fiamma 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 Fiamma prominent markets.

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.

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 Fiamma business can come under increasing regulations regarding data privacy, data security, etc.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Fiamma.

Easy access to finance

– Easy access to finance in Appliance & Tool industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fiamma can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Fiamma in Appliance & Tool industry. The Appliance & Tool 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Appliance & Tool industry are lowering. It can presents Fiamma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Appliance & Tool sector.

Environmental challenges

– Fiamma 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. Fiamma can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.

Increasing wage structure of Fiamma

– 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 Fiamma.

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Weighted SWOT Analysis of Fiamma Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fiamma 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 Fiamma 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 Fiamma 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 Fiamma 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 Fiamma needs to make to build a sustainable competitive advantage.

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