SWOT Analysis / TOWS Matrix for Sterling Progress (Malaysia)
Based on various researches at Oak Spring University , Sterling Progress is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, technology disruption, wage bills are increasing, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing energy prices,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Sterling Progress
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sterling Progress can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sterling Progress, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sterling Progress 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 Sterling Progress can be done for the following purposes –
1. Strategic planning of Sterling Progress
2. Improving business portfolio management of Sterling Progress
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Computer Peripherals sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sterling Progress
Strengths of Sterling Progress | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sterling Progress are -
Ability to lead change in Computer Peripherals
– Sterling Progress is one of the leading players in the Computer Peripherals industry in Malaysia. Over the years it has not only transformed the business landscape in the Computer Peripherals industry in Malaysia but also across the existing markets. The ability to lead change has enabled Sterling Progress in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Sterling Progress 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.
Ability to recruit top talent
– Sterling Progress is one of the leading players in the Computer Peripherals 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.
Highly skilled collaborators
– Sterling Progress has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Peripherals industry. Secondly the value chain collaborators of Sterling Progress have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Sterling Progress is present in almost all the verticals within the Computer Peripherals industry. This has provided Sterling Progress 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.
Effective Research and Development (R&D)
– Sterling Progress has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sterling Progress staying ahead in the Computer Peripherals industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Sterling Progress has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sterling Progress to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Sterling Progress 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.
Low bargaining power of suppliers
– Suppliers of Sterling Progress in the Technology sector have low bargaining power. Sterling Progress has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sterling Progress to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Sterling Progress comprises – understanding the underlying the factors in the Computer Peripherals 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.
Strong track record of project management in the Computer Peripherals industry
– Sterling Progress is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Sterling Progress 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 Sterling Progress is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sterling Progress emphasize – knowledge, initiative, and innovation.
Weaknesses of Sterling Progress | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sterling Progress are -
Employees’ less understanding of Sterling Progress strategy
– From the outside it seems that the employees of Sterling Progress 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.
Increasing silos among functional specialists
– The organizational structure of Sterling Progress is dominated by functional specialists. It is not different from other players in the Computer Peripherals industry, but Sterling Progress needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sterling Progress to focus more on services in the Computer Peripherals industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Sterling Progress has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Peripherals industry over the last five years. Sterling Progress 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.
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 Sterling Progress supply chain. Even after few cautionary changes, Sterling Progress is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sterling Progress vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Sterling Progress, it seems that company is thinking out the frontier risks that can impact Computer Peripherals 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.
Interest costs
– Compare to the competition, Sterling Progress 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sterling Progress is slow explore the new channels of communication. These new channels of communication can help Sterling Progress to provide better information regarding Computer Peripherals products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Computer Peripherals industry
– because of the regulatory requirements in Malaysia, Sterling Progress 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 Computer Peripherals industry.
Ability to respond to the competition
– As the decision making is very deliberative at Sterling Progress, in the dynamic environment of Computer Peripherals industry it has struggled to respond to the nimble upstart competition. Sterling Progress has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Sterling Progress has a high cash cycle compare to other players in the Computer Peripherals industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Malaysia, Sterling Progress needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Sterling Progress Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sterling Progress are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sterling Progress is facing challenges because of the dominance of functional experts in the organization. Sterling Progress can utilize new technology in the field of Computer Peripherals industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Sterling Progress can develop new processes and procedures in Computer Peripherals 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sterling Progress in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Peripherals industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Sterling Progress has opened avenues for new revenue streams for the organization in Computer Peripherals industry. This can help Sterling Progress to build a more holistic ecosystem for Sterling Progress products in the Computer Peripherals 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, Sterling Progress 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 Sterling Progress to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Sterling Progress 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.
Loyalty marketing
– Sterling Progress 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.
Use of Bitcoin and other crypto currencies for transactions in Computer Peripherals industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sterling Progress in the Computer Peripherals industry. Now Sterling Progress can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sterling Progress can use these opportunities to build new business models that can help the communities that Sterling Progress operates in. Secondly it can use opportunities from government spending in Computer Peripherals sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sterling Progress 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sterling Progress can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Sterling Progress can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Peripherals industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sterling Progress 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. Sterling Progress 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 Sterling Progress External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sterling Progress are -
Technology acceleration in Forth Industrial Revolution
– Sterling Progress has witnessed rapid integration of technology during Covid-19 in the Computer Peripherals industry. As one of the leading players in the industry, Sterling Progress needs to keep up with the evolution of technology in the Computer Peripherals 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. Sterling Progress needs to understand the core reasons impacting the Computer Peripherals industry. This will help it in building a better workplace.
Regulatory challenges
– Sterling Progress 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 Computer Peripherals industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sterling Progress may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Peripherals sector.
Easy access to finance
– Easy access to finance in Computer Peripherals industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sterling Progress can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Sterling Progress 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.
Shortening product life cycle
– it is one of the major threat that Sterling Progress is facing in Computer Peripherals sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Sterling Progress 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. Sterling Progress can take advantage of this fund but it will also bring new competitors in the Computer Peripherals industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sterling Progress 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 Sterling Progress prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Peripherals industry are lowering. It can presents Sterling Progress with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Peripherals sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sterling Progress in Computer Peripherals industry. The Computer Peripherals 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 Sterling Progress
– 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 Sterling Progress.
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 Sterling Progress.
Weighted SWOT Analysis of Sterling Progress Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sterling Progress 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 Sterling Progress 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 Sterling Progress 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 Sterling Progress 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 Sterling Progress needs to make to build a sustainable competitive advantage.