SWOT Analysis / TOWS Matrix for Globaltec Formation (Malaysia)
Based on various researches at Oak Spring University , Globaltec Formation is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, technology disruption, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Globaltec Formation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Globaltec Formation can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Globaltec Formation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Globaltec Formation 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 Globaltec Formation can be done for the following purposes –
1. Strategic planning of Globaltec Formation
2. Improving business portfolio management of Globaltec Formation
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Conglomerates sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Globaltec Formation
Strengths of Globaltec Formation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Globaltec Formation are -
Ability to recruit top talent
– Globaltec Formation is one of the leading players in the Conglomerates industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Conglomerates industry
– Globaltec Formation has clearly differentiated products in the market place. This has enabled Globaltec Formation to fetch slight price premium compare to the competitors in the Conglomerates industry. The sustainable margins have also helped Globaltec Formation to invest into research and development (R&D) and innovation.
Ability to lead change in Conglomerates
– Globaltec Formation is one of the leading players in the Conglomerates industry in Malaysia. Over the years it has not only transformed the business landscape in the Conglomerates industry in Malaysia but also across the existing markets. The ability to lead change has enabled Globaltec Formation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Globaltec Formation has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Globaltec Formation 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 Globaltec Formation 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.
Strong track record of project management in the Conglomerates industry
– Globaltec Formation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Conglomerates industry
- digital transformation varies from industry to industry. For Globaltec Formation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Globaltec Formation 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 brand equity
– Globaltec Formation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Globaltec Formation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Globaltec Formation in the Conglomerates sector have low bargaining power. Globaltec Formation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Globaltec Formation to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Globaltec Formation
– The covid-19 pandemic has put organizational resilience at the centre of everthing Globaltec Formation does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Globaltec Formation is one of the most innovative firm in Conglomerates sector.
Operational resilience
– The operational resilience strategy of Globaltec Formation comprises – understanding the underlying the factors in the Conglomerates 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 Globaltec Formation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Globaltec Formation are -
Skills based hiring in Conglomerates industry
– The stress on hiring functional specialists at Globaltec Formation 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.
Products dominated business model
– Even though Globaltec Formation has some of the most successful models in the Conglomerates industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Globaltec Formation should strive to include more intangible value offerings along with its core products and services.
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 Globaltec Formation supply chain. Even after few cautionary changes, Globaltec Formation is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Globaltec Formation vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Globaltec Formation is just above the Conglomerates 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.
Slow decision making process
– As mentioned earlier in the report, Globaltec Formation has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Conglomerates industry over the last five years. Globaltec Formation 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Globaltec Formation is slow explore the new channels of communication. These new channels of communication can help Globaltec Formation to provide better information regarding Conglomerates 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 Globaltec Formation, in the dynamic environment of Conglomerates industry it has struggled to respond to the nimble upstart competition. Globaltec Formation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Globaltec Formation, it seems that company is thinking out the frontier risks that can impact Conglomerates 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.
High dependence on Globaltec Formation ‘s star products
– The top 2 products and services of Globaltec Formation still accounts for major business revenue. This dependence on star products in Conglomerates industry has resulted into insufficient focus on developing new products, even though Globaltec Formation has relatively successful track record of launching new products.
Employees’ less understanding of Globaltec Formation strategy
– From the outside it seems that the employees of Globaltec Formation 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.
Slow to strategic competitive environment developments
– As Globaltec Formation is one of the leading players in the Conglomerates industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Conglomerates industry in last five years.
Globaltec Formation Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Globaltec Formation are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Globaltec Formation can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Globaltec Formation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Conglomerates industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Globaltec Formation to increase its market reach. Globaltec Formation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Globaltec Formation 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 Globaltec Formation to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Conglomerates industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Globaltec Formation in the Conglomerates industry. Now Globaltec Formation can target international markets with far fewer capital restrictions requirements than the existing system.
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 Globaltec Formation 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Globaltec Formation 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 Globaltec Formation to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Globaltec Formation can use the latest technology developments to improve its manufacturing and designing process in Conglomerates 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.
Leveraging digital technologies
– Globaltec Formation 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.
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. Globaltec Formation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Globaltec Formation 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 Conglomerates industry.
Buying journey improvements
– Globaltec Formation can improve the customer journey of consumers in the Conglomerates 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Conglomerates industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Globaltec Formation 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. Globaltec Formation 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.
Threats Globaltec Formation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Globaltec Formation are -
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. Globaltec Formation 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.
Consumer confidence and its impact on Globaltec Formation 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 Conglomerates industry and other sectors.
Environmental challenges
– Globaltec Formation 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. Globaltec Formation can take advantage of this fund but it will also bring new competitors in the Conglomerates industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Globaltec Formation in Conglomerates industry. The Conglomerates 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.
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 Globaltec Formation in the Conglomerates 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 Globaltec Formation business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Globaltec Formation
– 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 Globaltec Formation.
High dependence on third party suppliers
– Globaltec Formation 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.
Stagnating economy with rate increase
– Globaltec Formation 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 Conglomerates industry.
Technology acceleration in Forth Industrial Revolution
– Globaltec Formation has witnessed rapid integration of technology during Covid-19 in the Conglomerates industry. As one of the leading players in the industry, Globaltec Formation needs to keep up with the evolution of technology in the Conglomerates 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Globaltec Formation 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 Globaltec Formation prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Conglomerates industry are lowering. It can presents Globaltec Formation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Conglomerates sector.
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.
Weighted SWOT Analysis of Globaltec Formation Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Globaltec Formation 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 Globaltec Formation 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 Globaltec Formation 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 Globaltec Formation 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 Globaltec Formation needs to make to build a sustainable competitive advantage.