B2W DIGITAL ON (BTOW3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for B2W DIGITAL ON (Brazil)

Based on various researches at Oak Spring University , B2W DIGITAL ON is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is backlash against globalization, etc

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Introduction to SWOT Analysis of B2W DIGITAL ON

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that B2W DIGITAL ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the B2W DIGITAL ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which B2W DIGITAL ON 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 B2W DIGITAL ON can be done for the following purposes –
1. Strategic planning of B2W DIGITAL ON
2. Improving business portfolio management of B2W DIGITAL ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Retail (Catalog & Mail Order) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of B2W DIGITAL ON

Strengths of B2W DIGITAL ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of B2W DIGITAL ON are -

Superior customer experience

– The customer experience strategy of B2W DIGITAL ON in Retail (Catalog & Mail Order) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Cross disciplinary teams

– Horizontal connected teams at the B2W DIGITAL ON 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

– B2W DIGITAL ON 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 Retail (Catalog & Mail Order) industry. The technology infrastructure of Brazil 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.

Strong track record of project management in the Retail (Catalog & Mail Order) industry

– B2W DIGITAL ON is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Innovation driven organization

– B2W DIGITAL ON is one of the most innovative firm in Retail (Catalog & Mail Order) sector.

Sustainable margins compare to other players in Retail (Catalog & Mail Order) industry

– B2W DIGITAL ON has clearly differentiated products in the market place. This has enabled B2W DIGITAL ON to fetch slight price premium compare to the competitors in the Retail (Catalog & Mail Order) industry. The sustainable margins have also helped B2W DIGITAL ON to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– B2W DIGITAL ON has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – B2W DIGITAL ON staying ahead in the Retail (Catalog & Mail Order) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to recruit top talent

– B2W DIGITAL ON is one of the leading players in the Retail (Catalog & Mail Order) industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.

Diverse revenue streams

– B2W DIGITAL ON is present in almost all the verticals within the Retail (Catalog & Mail Order) industry. This has provided B2W DIGITAL ON 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.

Training and development

– B2W DIGITAL ON has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

High brand equity

– B2W DIGITAL ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled B2W DIGITAL ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Low bargaining power of suppliers

– Suppliers of B2W DIGITAL ON in the Services sector have low bargaining power. B2W DIGITAL ON has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps B2W DIGITAL ON to manage not only supply disruptions but also source products at highly competitive prices.

Weaknesses of B2W DIGITAL ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of B2W DIGITAL ON are -

Ability to respond to the competition

– As the decision making is very deliberative at B2W DIGITAL ON, in the dynamic environment of Retail (Catalog & Mail Order) industry it has struggled to respond to the nimble upstart competition. B2W DIGITAL ON has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Capital Spending Reduction

– Even during the low interest decade, B2W DIGITAL ON has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Retail (Catalog & Mail Order) industry using digital technology.

High dependence on B2W DIGITAL ON ‘s star products

– The top 2 products and services of B2W DIGITAL ON still accounts for major business revenue. This dependence on star products in Retail (Catalog & Mail Order) industry has resulted into insufficient focus on developing new products, even though B2W DIGITAL ON has relatively successful track record of launching new products.

Workers concerns about automation

– As automation is fast increasing in the Retail (Catalog & Mail Order) industry, B2W DIGITAL ON 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.

Skills based hiring in Retail (Catalog & Mail Order) industry

– The stress on hiring functional specialists at B2W DIGITAL ON 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 Retail (Catalog & Mail Order) industry

– because of the regulatory requirements in Brazil, B2W DIGITAL ON is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Retail (Catalog & Mail Order) industry.

Increasing silos among functional specialists

– The organizational structure of B2W DIGITAL ON is dominated by functional specialists. It is not different from other players in the Retail (Catalog & Mail Order) industry, but B2W DIGITAL ON needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help B2W DIGITAL ON to focus more on services in the Retail (Catalog & Mail Order) industry rather than just following the product oriented approach.

Interest costs

– Compare to the competition, B2W DIGITAL ON 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.

Employees’ less understanding of B2W DIGITAL ON strategy

– From the outside it seems that the employees of B2W DIGITAL ON 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 B2W DIGITAL ON supply chain. Even after few cautionary changes, B2W DIGITAL ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left B2W DIGITAL ON vulnerable to further global disruptions in South East Asia.

High operating costs

– Compare to the competitors, B2W DIGITAL ON has high operating costs in the Retail (Catalog & Mail Order) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract B2W DIGITAL ON lucrative customers.

B2W DIGITAL ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of B2W DIGITAL ON are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for B2W DIGITAL ON 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 B2W DIGITAL ON to hire the very best people irrespective of their geographical location.

Low interest rates

– Even though inflation is raising its head in most developed economies, B2W DIGITAL ON 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.

Better consumer reach

– The expansion of the 5G network will help B2W DIGITAL ON to increase its market reach. B2W DIGITAL ON will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help B2W DIGITAL ON 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Retail (Catalog & Mail Order) industry, but it has also influenced the consumer preferences. B2W DIGITAL ON can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, B2W DIGITAL ON can use these opportunities to build new business models that can help the communities that B2W DIGITAL ON operates in. Secondly it can use opportunities from government spending in Retail (Catalog & Mail Order) sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for B2W DIGITAL ON in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Catalog & Mail Order) industry, and it will provide faster access to the consumers.

Redefining models of collaboration and team work

– As explained in the weaknesses section, B2W DIGITAL ON is facing challenges because of the dominance of functional experts in the organization. B2W DIGITAL ON can utilize new technology in the field of Retail (Catalog & Mail Order) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects B2W DIGITAL ON can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Loyalty marketing

– B2W DIGITAL ON 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.

Buying journey improvements

– B2W DIGITAL ON can improve the customer journey of consumers in the Retail (Catalog & Mail Order) 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.

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. B2W DIGITAL ON can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

– B2W DIGITAL ON has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Catalog & Mail Order) sector. This continuous investment in analytics has enabled B2W DIGITAL ON to build a competitive advantage using analytics. The analytics driven competitive advantage can help B2W DIGITAL ON to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Threats B2W DIGITAL ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of B2W DIGITAL ON 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. B2W DIGITAL ON 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for B2W DIGITAL ON in Retail (Catalog & Mail Order) industry. The Retail (Catalog & Mail Order) 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.

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Catalog & Mail Order) industry are lowering. It can presents B2W DIGITAL ON with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Catalog & Mail Order) sector.

Environmental challenges

– B2W DIGITAL ON 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. B2W DIGITAL ON can take advantage of this fund but it will also bring new competitors in the Retail (Catalog & Mail Order) industry.

Easy access to finance

– Easy access to finance in Retail (Catalog & Mail Order) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. B2W DIGITAL ON can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Stagnating economy with rate increase

– B2W DIGITAL ON 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 Retail (Catalog & Mail Order) industry.

Consumer confidence and its impact on B2W DIGITAL ON demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Retail (Catalog & Mail Order) industry and other sectors.

Shortening product life cycle

– it is one of the major threat that B2W DIGITAL ON is facing in Retail (Catalog & Mail Order) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 B2W DIGITAL ON.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, B2W DIGITAL ON 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 B2W DIGITAL ON prominent markets.

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. B2W DIGITAL ON needs to understand the core reasons impacting the Retail (Catalog & Mail Order) industry. This will help it in building a better workplace.

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 B2W DIGITAL ON in the Retail (Catalog & Mail Order) sector and impact the bottomline of the organization.

Weighted SWOT Analysis of B2W DIGITAL ON Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at B2W DIGITAL ON 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 B2W DIGITAL ON 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 B2W DIGITAL ON 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 B2W DIGITAL ON 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 B2W DIGITAL ON needs to make to build a sustainable competitive advantage.

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