SOMOS EDU S/A ON (SEDU3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SOMOS EDU S/A ON (Brazil)

Based on various researches at Oak Spring University , SOMOS EDU S/A ON is operating in a macro-environment that has been destablized by – wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of SOMOS EDU S/A ON

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SOMOS EDU S/A ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SOMOS EDU S/A ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SOMOS EDU S/A 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of SOMOS EDU S/A ON can be done for the following purposes –
1. Strategic planning of SOMOS EDU S/A ON
2. Improving business portfolio management of SOMOS EDU S/A ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Printing & Publishing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SOMOS EDU S/A ON

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Strengths of SOMOS EDU S/A ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of SOMOS EDU S/A ON are -

Analytics focus

– SOMOS EDU S/A 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 Printing & Publishing 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.

Ability to lead change in Printing & Publishing

– SOMOS EDU S/A ON is one of the leading players in the Printing & Publishing industry in Brazil. Over the years it has not only transformed the business landscape in the Printing & Publishing industry in Brazil but also across the existing markets. The ability to lead change has enabled SOMOS EDU S/A ON in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Sustainable margins compare to other players in Printing & Publishing industry

– SOMOS EDU S/A ON has clearly differentiated products in the market place. This has enabled SOMOS EDU S/A ON to fetch slight price premium compare to the competitors in the Printing & Publishing industry. The sustainable margins have also helped SOMOS EDU S/A ON to invest into research and development (R&D) and innovation.

High brand equity

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

Strong track record of project management in the Printing & Publishing industry

– SOMOS EDU S/A 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.

Effective Research and Development (R&D)

– SOMOS EDU S/A ON has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SOMOS EDU S/A ON staying ahead in the Printing & Publishing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- SOMOS EDU S/A ON 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 SOMOS EDU S/A ON is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SOMOS EDU S/A ON emphasize – knowledge, initiative, and innovation.

Ability to recruit top talent

– SOMOS EDU S/A ON is one of the leading players in the Printing & Publishing 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.

Innovation driven organization

– SOMOS EDU S/A ON is one of the most innovative firm in Printing & Publishing sector.

Low bargaining power of suppliers

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

Superior customer experience

– The customer experience strategy of SOMOS EDU S/A ON in Printing & Publishing 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 SOMOS EDU S/A 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.

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Weaknesses of SOMOS EDU S/A ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of SOMOS EDU S/A ON are -

Skills based hiring in Printing & Publishing industry

– The stress on hiring functional specialists at SOMOS EDU S/A 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.

Products dominated business model

– Even though SOMOS EDU S/A ON has some of the most successful models in the Printing & Publishing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SOMOS EDU S/A ON should strive to include more intangible value offerings along with its core products and services.

Workers concerns about automation

– As automation is fast increasing in the Printing & Publishing industry, SOMOS EDU S/A 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.

Capital Spending Reduction

– Even during the low interest decade, SOMOS EDU S/A 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 Printing & Publishing industry using digital technology.

Interest costs

– Compare to the competition, SOMOS EDU S/A 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.

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 SOMOS EDU S/A ON supply chain. Even after few cautionary changes, SOMOS EDU S/A ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SOMOS EDU S/A ON vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– SOMOS EDU S/A ON 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.

No frontier risks strategy

– From the 10K / annual statement of SOMOS EDU S/A ON, it seems that company is thinking out the frontier risks that can impact Printing & Publishing 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.

Compensation and incentives

– The revenue per employee of SOMOS EDU S/A ON is just above the Printing & Publishing 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.

Employees’ less understanding of SOMOS EDU S/A ON strategy

– From the outside it seems that the employees of SOMOS EDU S/A 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 cash cycle compare to competitors

SOMOS EDU S/A ON has a high cash cycle compare to other players in the Printing & Publishing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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SOMOS EDU S/A ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of SOMOS EDU S/A ON are -

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 SOMOS EDU S/A 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, SOMOS EDU S/A 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, SOMOS EDU S/A ON 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 SOMOS EDU S/A ON to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Manufacturing automation

– SOMOS EDU S/A ON can use the latest technology developments to improve its manufacturing and designing process in Printing & Publishing 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.

Using analytics as competitive advantage

– SOMOS EDU S/A ON has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Printing & Publishing sector. This continuous investment in analytics has enabled SOMOS EDU S/A ON to build a competitive advantage using analytics. The analytics driven competitive advantage can help SOMOS EDU S/A ON to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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. SOMOS EDU S/A ON can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Use of Bitcoin and other crypto currencies for transactions in Printing & Publishing industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SOMOS EDU S/A ON in the Printing & Publishing industry. Now SOMOS EDU S/A ON can target international markets with far fewer capital restrictions requirements than the existing system.

Loyalty marketing

– SOMOS EDU S/A 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for SOMOS EDU S/A 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 Printing & Publishing industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of SOMOS EDU S/A ON has opened avenues for new revenue streams for the organization in Printing & Publishing industry. This can help SOMOS EDU S/A ON to build a more holistic ecosystem for SOMOS EDU S/A ON products in the Printing & Publishing industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

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

Better consumer reach

– The expansion of the 5G network will help SOMOS EDU S/A ON to increase its market reach. SOMOS EDU S/A 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.

Learning at scale

– Online learning technologies has now opened space for SOMOS EDU S/A ON 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.

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Threats SOMOS EDU S/A ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of SOMOS EDU S/A ON are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for SOMOS EDU S/A ON in Printing & Publishing industry. The Printing & Publishing 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.

Increasing wage structure of SOMOS EDU S/A ON

– 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 SOMOS EDU S/A ON.

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 SOMOS EDU S/A ON in the Printing & Publishing sector and impact the bottomline of the organization.

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 SOMOS EDU S/A ON.

Consumer confidence and its impact on SOMOS EDU S/A 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 Printing & Publishing industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SOMOS EDU S/A ON may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing & Publishing sector.

Easy access to finance

– Easy access to finance in Printing & Publishing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SOMOS EDU S/A ON can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Regulatory challenges

– SOMOS EDU S/A ON 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 Printing & Publishing industry regulations.

Stagnating economy with rate increase

– SOMOS EDU S/A 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 Printing & Publishing industry.

Environmental challenges

– SOMOS EDU S/A 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. SOMOS EDU S/A ON can take advantage of this fund but it will also bring new competitors in the Printing & Publishing industry.

Shortening product life cycle

– it is one of the major threat that SOMOS EDU S/A ON is facing in Printing & Publishing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

High dependence on third party suppliers

– SOMOS EDU S/A ON 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.

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Weighted SWOT Analysis of SOMOS EDU S/A ON Template, Example

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

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