Sydney Airport Ltd (SYD) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sydney Airport Ltd (Australia)

Based on various researches at Oak Spring University , Sydney Airport Ltd is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, technology disruption, geopolitical disruptions, increasing commodity prices, etc

---

---

---

---

Introduction to SWOT Analysis of Sydney Airport Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sydney Airport Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sydney Airport Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sydney Airport Ltd 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 Sydney Airport Ltd can be done for the following purposes –
1. Strategic planning of Sydney Airport Ltd
2. Improving business portfolio management of Sydney Airport Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sydney Airport Ltd

---

Strengths of Sydney Airport Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sydney Airport Ltd are -

Organizational Resilience of Sydney Airport Ltd

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

Highly skilled collaborators

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

Diverse revenue streams

– Sydney Airport Ltd is present in almost all the verticals within the Misc. Transportation industry. This has provided Sydney Airport Ltd 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.

Strong track record of project management in the Misc. Transportation industry

– Sydney Airport Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the Sydney Airport Ltd 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.

Analytics focus

– Sydney Airport Ltd 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 Misc. Transportation industry. The technology infrastructure of Australia 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.

Learning organization

- Sydney Airport Ltd 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 Sydney Airport Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sydney Airport Ltd emphasize – knowledge, initiative, and innovation.

High switching costs

– The high switching costs that Sydney Airport Ltd 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.

Sustainable margins compare to other players in Misc. Transportation industry

– Sydney Airport Ltd has clearly differentiated products in the market place. This has enabled Sydney Airport Ltd to fetch slight price premium compare to the competitors in the Misc. Transportation industry. The sustainable margins have also helped Sydney Airport Ltd to invest into research and development (R&D) and innovation.

Ability to lead change in Misc. Transportation

– Sydney Airport Ltd is one of the leading players in the Misc. Transportation industry in Australia. Over the years it has not only transformed the business landscape in the Misc. Transportation industry in Australia but also across the existing markets. The ability to lead change has enabled Sydney Airport Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Digital Transformation in Misc. Transportation industry

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

Ability to recruit top talent

– Sydney Airport Ltd is one of the leading players in the Misc. Transportation industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.

---

---

Weaknesses of Sydney Airport Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sydney Airport Ltd are -

Ability to respond to the competition

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

Employees’ less understanding of Sydney Airport Ltd strategy

– From the outside it seems that the employees of Sydney Airport Ltd 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.

Products dominated business model

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

Slow to strategic competitive environment developments

– As Sydney Airport Ltd is one of the leading players in the Misc. Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Transportation industry in last five years.

Skills based hiring in Misc. Transportation industry

– The stress on hiring functional specialists at Sydney Airport Ltd 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 bargaining power of channel partners in Misc. Transportation industry

– because of the regulatory requirements in Australia, Sydney Airport Ltd 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 Misc. Transportation industry.

No frontier risks strategy

– From the 10K / annual statement of Sydney Airport Ltd, it seems that company is thinking out the frontier risks that can impact Misc. Transportation 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 Sydney Airport Ltd ‘s star products

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

Compensation and incentives

– The revenue per employee of Sydney Airport Ltd is just above the Misc. Transportation 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.

Need for greater diversity

– Sydney Airport Ltd 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 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 Sydney Airport Ltd supply chain. Even after few cautionary changes, Sydney Airport Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sydney Airport Ltd vulnerable to further global disruptions in South East Asia.

---

Sydney Airport Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sydney Airport Ltd are -

Buying journey improvements

– Sydney Airport Ltd can improve the customer journey of consumers in the Misc. Transportation 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.

Use of Bitcoin and other crypto currencies for transactions in Misc. Transportation industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sydney Airport Ltd in the Misc. Transportation industry. Now Sydney Airport Ltd can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Sydney Airport Ltd 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 Sydney Airport Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Loyalty marketing

– Sydney Airport Ltd 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.

Reforming the budgeting process

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

Using analytics as competitive advantage

– Sydney Airport Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Transportation sector. This continuous investment in analytics has enabled Sydney Airport Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sydney Airport Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Remote work and new talent hiring opportunities

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

Developing new processes and practices

– Sydney Airport Ltd can develop new processes and procedures in Misc. Transportation 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.

Creating value in data economy

– The success of analytics program of Sydney Airport Ltd has opened avenues for new revenue streams for the organization in Misc. Transportation industry. This can help Sydney Airport Ltd to build a more holistic ecosystem for Sydney Airport Ltd products in the Misc. Transportation 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 Sydney Airport Ltd to increase its market reach. Sydney Airport Ltd 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Transportation industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sydney Airport Ltd 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. Sydney Airport Ltd 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Sydney Airport Ltd is facing challenges because of the dominance of functional experts in the organization. Sydney Airport Ltd can utilize new technology in the field of Misc. Transportation industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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, Sydney Airport Ltd can use these opportunities to build new business models that can help the communities that Sydney Airport Ltd operates in. Secondly it can use opportunities from government spending in Misc. Transportation sector.

---

Threats Sydney Airport Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sydney Airport Ltd are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Sydney Airport Ltd in Misc. Transportation industry. The Misc. Transportation 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.

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. Sydney Airport Ltd needs to understand the core reasons impacting the Misc. Transportation industry. This will help it in building a better workplace.

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.

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 Sydney Airport Ltd.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sydney Airport Ltd 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 Sydney Airport Ltd prominent markets.

Barriers of entry lowering

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

Shortening product life cycle

– it is one of the major threat that Sydney Airport Ltd is facing in Misc. Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Sydney Airport Ltd 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 Misc. Transportation industry.

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.

Increasing wage structure of Sydney Airport Ltd

– 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 Sydney Airport Ltd.

Consumer confidence and its impact on Sydney Airport Ltd 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 Misc. Transportation industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– Sydney Airport Ltd has witnessed rapid integration of technology during Covid-19 in the Misc. Transportation industry. As one of the leading players in the industry, Sydney Airport Ltd needs to keep up with the evolution of technology in the Misc. Transportation 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 Sydney Airport Ltd in the Misc. Transportation sector and impact the bottomline of the organization.

---

Weighted SWOT Analysis of Sydney Airport Ltd Template, Example

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

--- ---