SWOT Analysis / TOWS Matrix for AusGroup Ltd (Singapore)
Based on various researches at Oak Spring University , AusGroup Ltd is operating in a macro-environment that has been destablized by – technology disruption, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is increasing trade war between United States & China,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that AusGroup Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the AusGroup Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which AusGroup 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 AusGroup Ltd can be done for the following purposes –
1. Strategic planning of AusGroup Ltd
2. Improving business portfolio management of AusGroup Ltd
3. Assessing feasibility of the new initiative in Singapore
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of AusGroup Ltd
Strengths of AusGroup Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of AusGroup Ltd are -
High brand equity
– AusGroup Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled AusGroup Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Waste Management Services
– AusGroup Ltd is one of the leading players in the Waste Management Services industry in Singapore. Over the years it has not only transformed the business landscape in the Waste Management Services industry in Singapore but also across the existing markets. The ability to lead change has enabled AusGroup Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of AusGroup Ltd in the Services sector have low bargaining power. AusGroup Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps AusGroup Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– AusGroup Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – AusGroup Ltd staying ahead in the Waste Management Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the AusGroup 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.
Strong track record of project management in the Waste Management Services industry
– AusGroup 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.
Sustainable margins compare to other players in Waste Management Services industry
– AusGroup Ltd has clearly differentiated products in the market place. This has enabled AusGroup Ltd to fetch slight price premium compare to the competitors in the Waste Management Services industry. The sustainable margins have also helped AusGroup Ltd to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– AusGroup Ltd is one of the leading players in the Waste Management Services industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy of AusGroup Ltd comprises – understanding the underlying the factors in the Waste Management Services 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.
Highly skilled collaborators
– AusGroup Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Waste Management Services industry. Secondly the value chain collaborators of AusGroup Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– AusGroup Ltd 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.
Digital Transformation in Waste Management Services industry
- digital transformation varies from industry to industry. For AusGroup Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. AusGroup 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.
Weaknesses of AusGroup Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AusGroup Ltd are -
Workers concerns about automation
– As automation is fast increasing in the Waste Management Services industry, AusGroup 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.
High operating costs
– Compare to the competitors, AusGroup Ltd has high operating costs in the Waste Management Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract AusGroup Ltd lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at AusGroup Ltd, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. AusGroup Ltd 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, AusGroup 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 Waste Management Services industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of AusGroup Ltd, it seems that company is thinking out the frontier risks that can impact Waste Management Services 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.
Lack of clear differentiation of AusGroup Ltd products
– To increase the profitability and margins on the products, AusGroup Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of AusGroup Ltd strategy
– From the outside it seems that the employees of AusGroup 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 AusGroup Ltd supply chain. Even after few cautionary changes, AusGroup Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left AusGroup Ltd vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that AusGroup Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Waste Management Services industry have deep experience in developing customer relationships. Marketing department at AusGroup Ltd can leverage the sales team experience to cultivate customer relationships as AusGroup Ltd is planning to shift buying processes online.
High cash cycle compare to competitors
AusGroup Ltd has a high cash cycle compare to other players in the Waste Management Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on AusGroup Ltd ‘s star products
– The top 2 products and services of AusGroup Ltd still accounts for major business revenue. This dependence on star products in Waste Management Services industry has resulted into insufficient focus on developing new products, even though AusGroup Ltd has relatively successful track record of launching new products.
AusGroup Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of AusGroup Ltd are -
Manufacturing automation
– AusGroup Ltd can use the latest technology developments to improve its manufacturing and designing process in Waste Management Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects AusGroup Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– AusGroup Ltd can improve the customer journey of consumers in the Waste Management Services 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.
Developing new processes and practices
– AusGroup Ltd can develop new processes and procedures in Waste Management Services 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.
Better consumer reach
– The expansion of the 5G network will help AusGroup Ltd to increase its market reach. AusGroup 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, AusGroup 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.
Loyalty marketing
– AusGroup 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, AusGroup Ltd can use these opportunities to build new business models that can help the communities that AusGroup Ltd operates in. Secondly it can use opportunities from government spending in Waste Management Services sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, AusGroup Ltd is facing challenges because of the dominance of functional experts in the organization. AusGroup Ltd can utilize new technology in the field of Waste Management Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– AusGroup 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, AusGroup 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 AusGroup 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.
Use of Bitcoin and other crypto currencies for transactions in Waste Management Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for AusGroup Ltd in the Waste Management Services industry. Now AusGroup Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for AusGroup 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 Waste Management Services industry, and it will provide faster access to the consumers.
Threats AusGroup Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of AusGroup Ltd are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, AusGroup 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 AusGroup Ltd prominent markets.
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. AusGroup Ltd 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.
Environmental challenges
– AusGroup Ltd 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. AusGroup Ltd can take advantage of this fund but it will also bring new competitors in the Waste Management Services industry.
Shortening product life cycle
– it is one of the major threat that AusGroup Ltd is facing in Waste Management Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– AusGroup Ltd high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on AusGroup 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 Waste Management Services industry and other sectors.
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. AusGroup Ltd needs to understand the core reasons impacting the Waste Management Services industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Waste Management Services industry are lowering. It can presents AusGroup Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Waste Management Services sector.
Easy access to finance
– Easy access to finance in Waste Management Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. AusGroup Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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
– AusGroup 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 Waste Management Services industry.
Technology acceleration in Forth Industrial Revolution
– AusGroup Ltd has witnessed rapid integration of technology during Covid-19 in the Waste Management Services industry. As one of the leading players in the industry, AusGroup Ltd needs to keep up with the evolution of technology in the Waste Management Services 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.
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.
Weighted SWOT Analysis of AusGroup Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at AusGroup 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 AusGroup 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 AusGroup 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 AusGroup 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 AusGroup Ltd needs to make to build a sustainable competitive advantage.
