SWOT Analysis / TOWS Matrix for Anzo Holdings (Malaysia)
Based on various researches at Oak Spring University , Anzo Holdings is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anzo Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anzo Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anzo Holdings 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 Anzo Holdings can be done for the following purposes –
1. Strategic planning of Anzo Holdings
2. Improving business portfolio management of Anzo Holdings
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anzo Holdings
Strengths of Anzo Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anzo Holdings are -
Sustainable margins compare to other players in Forestry & Wood Products industry
– Anzo Holdings has clearly differentiated products in the market place. This has enabled Anzo Holdings to fetch slight price premium compare to the competitors in the Forestry & Wood Products industry. The sustainable margins have also helped Anzo Holdings to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Anzo Holdings comprises – understanding the underlying the factors in the Forestry & Wood Products 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.
Cross disciplinary teams
– Horizontal connected teams at the Anzo Holdings 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.
High switching costs
– The high switching costs that Anzo Holdings 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.
Superior customer experience
– The customer experience strategy of Anzo Holdings in Forestry & Wood Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Anzo Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anzo Holdings 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.
Strong track record of project management in the Forestry & Wood Products industry
– Anzo Holdings 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
– Anzo Holdings is one of the most innovative firm in Forestry & Wood Products sector.
Ability to lead change in Forestry & Wood Products
– Anzo Holdings is one of the leading players in the Forestry & Wood Products industry in Malaysia. Over the years it has not only transformed the business landscape in the Forestry & Wood Products industry in Malaysia but also across the existing markets. The ability to lead change has enabled Anzo Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Forestry & Wood Products industry
- digital transformation varies from industry to industry. For Anzo Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anzo Holdings 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
– Anzo Holdings is one of the leading players in the Forestry & Wood Products 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.
Diverse revenue streams
– Anzo Holdings is present in almost all the verticals within the Forestry & Wood Products industry. This has provided Anzo Holdings 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.
Weaknesses of Anzo Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anzo Holdings are -
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 Anzo Holdings supply chain. Even after few cautionary changes, Anzo Holdings is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Anzo Holdings vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Malaysia, Anzo Holdings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Anzo Holdings has a high cash cycle compare to other players in the Forestry & Wood Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Anzo Holdings is just above the Forestry & Wood Products 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.
High dependence on Anzo Holdings ‘s star products
– The top 2 products and services of Anzo Holdings still accounts for major business revenue. This dependence on star products in Forestry & Wood Products industry has resulted into insufficient focus on developing new products, even though Anzo Holdings has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Anzo Holdings, it seems that company is thinking out the frontier risks that can impact Forestry & Wood Products 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.
Need for greater diversity
– Anzo Holdings 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.
Products dominated business model
– Even though Anzo Holdings has some of the most successful models in the Forestry & Wood Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Anzo Holdings should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of Anzo Holdings strategy
– From the outside it seems that the employees of Anzo Holdings 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.
Skills based hiring in Forestry & Wood Products industry
– The stress on hiring functional specialists at Anzo Holdings 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.
Interest costs
– Compare to the competition, Anzo Holdings 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.
Anzo Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anzo Holdings are -
Using analytics as competitive advantage
– Anzo Holdings has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Forestry & Wood Products sector. This continuous investment in analytics has enabled Anzo Holdings to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anzo Holdings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Anzo Holdings 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 Anzo Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Anzo Holdings can develop new processes and procedures in Forestry & Wood Products 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Forestry & Wood Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Anzo Holdings 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. Anzo Holdings 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.
Buying journey improvements
– Anzo Holdings can improve the customer journey of consumers in the Forestry & Wood Products 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anzo Holdings 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 Anzo Holdings to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Forestry & Wood Products industry, but it has also influenced the consumer preferences. Anzo Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Anzo Holdings 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.
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. Anzo Holdings 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 Anzo Holdings 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anzo Holdings can use these opportunities to build new business models that can help the communities that Anzo Holdings operates in. Secondly it can use opportunities from government spending in Forestry & Wood Products sector.
Better consumer reach
– The expansion of the 5G network will help Anzo Holdings to increase its market reach. Anzo Holdings 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Anzo Holdings is facing challenges because of the dominance of functional experts in the organization. Anzo Holdings can utilize new technology in the field of Forestry & Wood Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Anzo Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anzo Holdings are -
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 Anzo Holdings.
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 Anzo Holdings business can come under increasing regulations regarding data privacy, data security, etc.
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. Anzo Holdings 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.
Technology acceleration in Forth Industrial Revolution
– Anzo Holdings has witnessed rapid integration of technology during Covid-19 in the Forestry & Wood Products industry. As one of the leading players in the industry, Anzo Holdings needs to keep up with the evolution of technology in the Forestry & Wood Products sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Anzo Holdings
– 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 Anzo Holdings.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Anzo Holdings 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 Anzo Holdings prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Anzo Holdings in Forestry & Wood Products industry. The Forestry & Wood Products 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. Anzo Holdings needs to understand the core reasons impacting the Forestry & Wood Products industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Anzo Holdings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Forestry & Wood Products sector.
Consumer confidence and its impact on Anzo Holdings 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 Forestry & Wood Products industry and other sectors.
Regulatory challenges
– Anzo Holdings 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 Forestry & Wood Products industry regulations.
Shortening product life cycle
– it is one of the major threat that Anzo Holdings is facing in Forestry & Wood Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Anzo Holdings in the Forestry & Wood Products sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Anzo Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anzo Holdings 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 Anzo Holdings 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 Anzo Holdings 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 Anzo Holdings 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 Anzo Holdings needs to make to build a sustainable competitive advantage.
