SWOT Analysis / TOWS Matrix for Smiles Fidelidade (Brazil)
Based on various researches at Oak Spring University , Smiles Fidelidade is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, technology disruption, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Smiles Fidelidade
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Smiles Fidelidade can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smiles Fidelidade, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smiles Fidelidade 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 Smiles Fidelidade can be done for the following purposes –
1. Strategic planning of Smiles Fidelidade
2. Improving business portfolio management of Smiles Fidelidade
3. Assessing feasibility of the new initiative in Brazil
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Smiles Fidelidade
Strengths of Smiles Fidelidade | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smiles Fidelidade are -
Sustainable margins compare to other players in industry
– Smiles Fidelidade has clearly differentiated products in the market place. This has enabled Smiles Fidelidade to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Smiles Fidelidade to invest into research and development (R&D) and innovation.
Analytics focus
– Smiles Fidelidade 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 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.
High switching costs
– The high switching costs that Smiles Fidelidade 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.
Learning organization
- Smiles Fidelidade 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 Smiles Fidelidade is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Smiles Fidelidade emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Smiles Fidelidade 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.
Effective Research and Development (R&D)
– Smiles Fidelidade has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Smiles Fidelidade staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the industry
– Smiles Fidelidade is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Smiles Fidelidade has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Smiles Fidelidade to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Smiles Fidelidade digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Smiles Fidelidade 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.
Training and development
– Smiles Fidelidade has one of the best training and development program in 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.
Ability to lead change in
– Smiles Fidelidade is one of the leading players in the industry in Brazil. Over the years it has not only transformed the business landscape in the industry in Brazil but also across the existing markets. The ability to lead change has enabled Smiles Fidelidade 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 Smiles Fidelidade in the sector have low bargaining power. Smiles Fidelidade has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Smiles Fidelidade to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Smiles Fidelidade | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Smiles Fidelidade are -
Low market penetration in new markets
– Outside its home market of Brazil, Smiles Fidelidade needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Smiles Fidelidade supply chain. Even after few cautionary changes, Smiles Fidelidade is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Smiles Fidelidade vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Smiles Fidelidade is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Smiles Fidelidade, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Smiles Fidelidade has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Smiles Fidelidade ‘s star products
– The top 2 products and services of Smiles Fidelidade still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Smiles Fidelidade has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the industry, Smiles Fidelidade 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.
No frontier risks strategy
– From the 10K / annual statement of Smiles Fidelidade, it seems that company is thinking out the frontier risks that can impact 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.
Products dominated business model
– Even though Smiles Fidelidade has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Smiles Fidelidade should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Smiles Fidelidade products
– To increase the profitability and margins on the products, Smiles Fidelidade needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in industry
– The stress on hiring functional specialists at Smiles Fidelidade 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 operating costs
– Compare to the competitors, Smiles Fidelidade has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Smiles Fidelidade lucrative customers.
Smiles Fidelidade Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Smiles Fidelidade are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Smiles Fidelidade can use these opportunities to build new business models that can help the communities that Smiles Fidelidade operates in. Secondly it can use opportunities from government spending in sector.
Building a culture of innovation
– managers at Smiles Fidelidade 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 industry.
Learning at scale
– Online learning technologies has now opened space for Smiles Fidelidade 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.
Creating value in data economy
– The success of analytics program of Smiles Fidelidade has opened avenues for new revenue streams for the organization in industry. This can help Smiles Fidelidade to build a more holistic ecosystem for Smiles Fidelidade products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Smiles Fidelidade in the industry. Now Smiles Fidelidade can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smiles Fidelidade 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 Smiles Fidelidade to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Smiles Fidelidade 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Smiles Fidelidade can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Smiles Fidelidade can use the latest technology developments to improve its manufacturing and designing process in 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
– Smiles Fidelidade has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Smiles Fidelidade to build a competitive advantage using analytics. The analytics driven competitive advantage can help Smiles Fidelidade to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Smiles Fidelidade 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, Smiles Fidelidade 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. Smiles Fidelidade can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Smiles Fidelidade External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Smiles Fidelidade 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. Smiles Fidelidade 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.
Stagnating economy with rate increase
– Smiles Fidelidade 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 industry.
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 Smiles Fidelidade.
Environmental challenges
– Smiles Fidelidade 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. Smiles Fidelidade can take advantage of this fund but it will also bring new competitors in the industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Smiles Fidelidade may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Smiles Fidelidade with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Smiles Fidelidade 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 industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Smiles Fidelidade in industry. The 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.
Regulatory challenges
– Smiles Fidelidade 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 industry regulations.
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 Smiles Fidelidade business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Smiles Fidelidade can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Smiles Fidelidade
– 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 Smiles Fidelidade.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Smiles Fidelidade 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 Smiles Fidelidade prominent markets.
Weighted SWOT Analysis of Smiles Fidelidade Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Smiles Fidelidade 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 Smiles Fidelidade 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 Smiles Fidelidade 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 Smiles Fidelidade 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 Smiles Fidelidade needs to make to build a sustainable competitive advantage.