SWOT Analysis / TOWS Matrix for LOJAS AMERIC PN (Brazil)
Based on various researches at Oak Spring University , LOJAS AMERIC PN is operating in a macro-environment that has been destablized by – increasing commodity prices, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, increasing energy prices, increasing household debt because of falling income levels, there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that LOJAS AMERIC PN can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the LOJAS AMERIC PN, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which LOJAS AMERIC PN 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 LOJAS AMERIC PN can be done for the following purposes –
1. Strategic planning of LOJAS AMERIC PN
2. Improving business portfolio management of LOJAS AMERIC PN
3. Assessing feasibility of the new initiative in Brazil
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of LOJAS AMERIC PN
Strengths of LOJAS AMERIC PN | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of LOJAS AMERIC PN are -
High switching costs
– The high switching costs that LOJAS AMERIC PN 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.
Ability to recruit top talent
– LOJAS AMERIC PN is one of the leading players in the Retail (Department & Discount) industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– LOJAS AMERIC PN has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. LOJAS AMERIC PN 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.
Superior customer experience
– The customer experience strategy of LOJAS AMERIC PN in Retail (Department & Discount) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Retail (Department & Discount) industry
– LOJAS AMERIC PN is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– LOJAS AMERIC PN has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled LOJAS AMERIC PN to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the LOJAS AMERIC PN 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.
Learning organization
- LOJAS AMERIC PN 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 LOJAS AMERIC PN is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at LOJAS AMERIC PN emphasize – knowledge, initiative, and innovation.
Training and development
– LOJAS AMERIC PN 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 lead change in Retail (Department & Discount)
– LOJAS AMERIC PN is one of the leading players in the Retail (Department & Discount) industry in Brazil. Over the years it has not only transformed the business landscape in the Retail (Department & Discount) industry in Brazil but also across the existing markets. The ability to lead change has enabled LOJAS AMERIC PN in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of LOJAS AMERIC PN
– The covid-19 pandemic has put organizational resilience at the centre of everthing LOJAS AMERIC PN 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 LOJAS AMERIC PN comprises – understanding the underlying the factors in the Retail (Department & Discount) 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.
Weaknesses of LOJAS AMERIC PN | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of LOJAS AMERIC PN are -
Products dominated business model
– Even though LOJAS AMERIC PN has some of the most successful models in the Retail (Department & Discount) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. LOJAS AMERIC PN 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 LOJAS AMERIC PN, it seems that company is thinking out the frontier risks that can impact Retail (Department & Discount) 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.
Aligning sales with marketing
– From the outside it seems that LOJAS AMERIC PN needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Department & Discount) industry have deep experience in developing customer relationships. Marketing department at LOJAS AMERIC PN can leverage the sales team experience to cultivate customer relationships as LOJAS AMERIC PN is planning to shift buying processes online.
High cash cycle compare to competitors
LOJAS AMERIC PN has a high cash cycle compare to other players in the Retail (Department & Discount) 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 bargaining power of channel partners in Retail (Department & Discount) industry
– because of the regulatory requirements in Brazil, LOJAS AMERIC PN 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 Retail (Department & Discount) industry.
Ability to respond to the competition
– As the decision making is very deliberative at LOJAS AMERIC PN, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. LOJAS AMERIC PN has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, LOJAS AMERIC PN 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 Retail (Department & Discount) industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Retail (Department & Discount) industry, LOJAS AMERIC PN needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, LOJAS AMERIC PN has high operating costs in the Retail (Department & Discount) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract LOJAS AMERIC PN lucrative customers.
Slow decision making process
– As mentioned earlier in the report, LOJAS AMERIC PN has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Department & Discount) industry over the last five years. LOJAS AMERIC PN even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of LOJAS AMERIC PN products
– To increase the profitability and margins on the products, LOJAS AMERIC PN needs to provide more differentiated products than what it is currently offering in the marketplace.
LOJAS AMERIC PN Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of LOJAS AMERIC PN are -
Low interest rates
– Even though inflation is raising its head in most developed economies, LOJAS AMERIC PN 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.
Buying journey improvements
– LOJAS AMERIC PN can improve the customer journey of consumers in the Retail (Department & Discount) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, LOJAS AMERIC PN can use these opportunities to build new business models that can help the communities that LOJAS AMERIC PN operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.
Developing new processes and practices
– LOJAS AMERIC PN can develop new processes and procedures in Retail (Department & Discount) 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.
Using analytics as competitive advantage
– LOJAS AMERIC PN has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled LOJAS AMERIC PN to build a competitive advantage using analytics. The analytics driven competitive advantage can help LOJAS AMERIC PN to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of LOJAS AMERIC PN has opened avenues for new revenue streams for the organization in Retail (Department & Discount) industry. This can help LOJAS AMERIC PN to build a more holistic ecosystem for LOJAS AMERIC PN products in the Retail (Department & Discount) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help LOJAS AMERIC PN to increase its market reach. LOJAS AMERIC PN 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.
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 LOJAS AMERIC PN 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.
Loyalty marketing
– LOJAS AMERIC PN 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Department & Discount) industry, but it has also influenced the consumer preferences. LOJAS AMERIC PN can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for LOJAS AMERIC PN in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Department & Discount) industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– LOJAS AMERIC PN 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.
Manufacturing automation
– LOJAS AMERIC PN can use the latest technology developments to improve its manufacturing and designing process in Retail (Department & Discount) 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.
Threats LOJAS AMERIC PN External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of LOJAS AMERIC PN are -
Consumer confidence and its impact on LOJAS AMERIC PN 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 Retail (Department & Discount) industry and other sectors.
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 LOJAS AMERIC PN business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– LOJAS AMERIC PN 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. LOJAS AMERIC PN can take advantage of this fund but it will also bring new competitors in the Retail (Department & Discount) 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. LOJAS AMERIC PN 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.
High dependence on third party suppliers
– LOJAS AMERIC PN 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.
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.
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.
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 LOJAS AMERIC PN in the Retail (Department & Discount) sector and impact the bottomline of the organization.
Increasing wage structure of LOJAS AMERIC PN
– 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 LOJAS AMERIC PN.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, LOJAS AMERIC PN 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 LOJAS AMERIC PN prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for LOJAS AMERIC PN in Retail (Department & Discount) industry. The Retail (Department & Discount) 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 Retail (Department & Discount) industry are lowering. It can presents LOJAS AMERIC PN with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.
Regulatory challenges
– LOJAS AMERIC PN 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 Retail (Department & Discount) industry regulations.
Weighted SWOT Analysis of LOJAS AMERIC PN Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at LOJAS AMERIC PN 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 LOJAS AMERIC PN 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 LOJAS AMERIC PN 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 LOJAS AMERIC PN 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 LOJAS AMERIC PN needs to make to build a sustainable competitive advantage.