Sydney Airport Ltd (SYD) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Transportation
Strategy / 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 – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, geopolitical disruptions, increasing transportation and logistics costs,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, 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 -
Training and development
– Sydney Airport Ltd has one of the best training and development program in Transportation 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.
Low bargaining power of suppliers
– Suppliers of Sydney Airport Ltd in the Transportation sector have low bargaining power. Sydney Airport Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sydney Airport Ltd to manage not only supply disruptions but also source products at highly competitive prices.
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.
Successful track record of launching new products
– Sydney Airport Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sydney Airport Ltd 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.
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.
Superior customer experience
– The customer experience strategy of Sydney Airport Ltd in Misc. Transportation industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Sydney Airport Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sydney Airport Ltd staying ahead in the Misc. Transportation industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Innovation driven organization
– Sydney Airport Ltd is one of the most innovative firm in Misc. Transportation sector.
High brand equity
– Sydney Airport Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sydney Airport Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
Workers concerns about automation
– As automation is fast increasing in the Misc. Transportation industry, Sydney Airport Ltd 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.
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.
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.
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.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of Australia, Sydney Airport Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Capital Spending Reduction
– Even during the low interest decade, Sydney Airport Ltd 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 Misc. Transportation industry using digital technology.
Interest costs
– Compare to the competition, Sydney Airport Ltd 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.
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 -
Learning at scale
– Online learning technologies has now opened space for Sydney Airport Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sydney Airport Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Transportation industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Sydney Airport Ltd 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 Misc. Transportation industry.
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.
Manufacturing automation
– Sydney Airport Ltd can use the latest technology developments to improve its manufacturing and designing process in Misc. Transportation 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.
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. Sydney Airport Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Sydney Airport Ltd 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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sydney Airport Ltd 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.
Leveraging digital technologies
– Sydney Airport Ltd 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.
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 -
Regulatory challenges
– Sydney Airport Ltd 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 Misc. Transportation industry regulations.
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.
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.
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.
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.
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 Sydney Airport Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sydney Airport Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Transportation 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.
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.
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.
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.