LOCAMERICA ON NM (LCAM3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for LOCAMERICA ON NM (Brazil)

Based on various researches at Oak Spring University , LOCAMERICA ON NM is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, there is backlash against globalization, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, technology disruption, etc

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Introduction to SWOT Analysis of LOCAMERICA ON NM

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

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

The strengths of LOCAMERICA ON NM are -

Strong track record of project management in the Rental & Leasing industry

– LOCAMERICA ON NM 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

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

Operational resilience

– The operational resilience strategy of LOCAMERICA ON NM comprises – understanding the underlying the factors in the Rental & Leasing 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.

Learning organization

- LOCAMERICA ON NM 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 LOCAMERICA ON NM is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at LOCAMERICA ON NM emphasize – knowledge, initiative, and innovation.

Training and development

– LOCAMERICA ON NM 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.

Ability to recruit top talent

– LOCAMERICA ON NM is one of the leading players in the Rental & Leasing 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.

Highly skilled collaborators

– LOCAMERICA ON NM has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Rental & Leasing industry. Secondly the value chain collaborators of LOCAMERICA ON NM have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– LOCAMERICA ON NM is present in almost all the verticals within the Rental & Leasing industry. This has provided LOCAMERICA ON NM 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.

Successful track record of launching new products

– LOCAMERICA ON NM has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. LOCAMERICA ON NM 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.

Low bargaining power of suppliers

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

Effective Research and Development (R&D)

– LOCAMERICA ON NM has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – LOCAMERICA ON NM staying ahead in the Rental & Leasing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to lead change in Rental & Leasing

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

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

The weaknesses of LOCAMERICA ON NM are -

High dependence on LOCAMERICA ON NM ‘s star products

– The top 2 products and services of LOCAMERICA ON NM still accounts for major business revenue. This dependence on star products in Rental & Leasing industry has resulted into insufficient focus on developing new products, even though LOCAMERICA ON NM has relatively successful track record of launching new products.

Interest costs

– Compare to the competition, LOCAMERICA ON NM 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.

Slow decision making process

– As mentioned earlier in the report, LOCAMERICA ON NM has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Rental & Leasing industry over the last five years. LOCAMERICA ON NM even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

High operating costs

– Compare to the competitors, LOCAMERICA ON NM has high operating costs in the Rental & Leasing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract LOCAMERICA ON NM lucrative customers.

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

High bargaining power of channel partners in Rental & Leasing industry

– because of the regulatory requirements in Brazil, LOCAMERICA ON NM 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 Rental & Leasing industry.

Aligning sales with marketing

– From the outside it seems that LOCAMERICA ON NM needs to have more collaboration between its sales team and marketing team. Sales professionals in the Rental & Leasing industry have deep experience in developing customer relationships. Marketing department at LOCAMERICA ON NM can leverage the sales team experience to cultivate customer relationships as LOCAMERICA ON NM is planning to shift buying processes online.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, LOCAMERICA ON NM is slow explore the new channels of communication. These new channels of communication can help LOCAMERICA ON NM to provide better information regarding Rental & Leasing products and services. It can also build an online community to further reach out to potential customers.

Workers concerns about automation

– As automation is fast increasing in the Rental & Leasing industry, LOCAMERICA ON NM 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.

Lack of clear differentiation of LOCAMERICA ON NM products

– To increase the profitability and margins on the products, LOCAMERICA ON NM needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to strategic competitive environment developments

– As LOCAMERICA ON NM is one of the leading players in the Rental & Leasing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Rental & Leasing industry in last five years.

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

The opportunities of LOCAMERICA ON NM are -

Loyalty marketing

– LOCAMERICA ON NM 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.

Better consumer reach

– The expansion of the 5G network will help LOCAMERICA ON NM to increase its market reach. LOCAMERICA ON NM 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for LOCAMERICA ON NM in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Rental & Leasing industry, and it will provide faster access to the consumers.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, LOCAMERICA ON NM can use these opportunities to build new business models that can help the communities that LOCAMERICA ON NM operates in. Secondly it can use opportunities from government spending in Rental & Leasing sector.

Building a culture of innovation

– managers at LOCAMERICA ON NM 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 Rental & Leasing industry.

Developing new processes and practices

– LOCAMERICA ON NM can develop new processes and procedures in Rental & Leasing 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.

Learning at scale

– Online learning technologies has now opened space for LOCAMERICA ON NM 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.

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 LOCAMERICA ON NM 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Rental & Leasing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. LOCAMERICA ON NM 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. LOCAMERICA ON NM 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.

Creating value in data economy

– The success of analytics program of LOCAMERICA ON NM has opened avenues for new revenue streams for the organization in Rental & Leasing industry. This can help LOCAMERICA ON NM to build a more holistic ecosystem for LOCAMERICA ON NM products in the Rental & Leasing industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Rental & Leasing industry, but it has also influenced the consumer preferences. LOCAMERICA ON NM can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reforming the budgeting process

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

Redefining models of collaboration and team work

– As explained in the weaknesses section, LOCAMERICA ON NM is facing challenges because of the dominance of functional experts in the organization. LOCAMERICA ON NM can utilize new technology in the field of Rental & Leasing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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Threats LOCAMERICA ON NM External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of LOCAMERICA ON NM are -

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for LOCAMERICA ON NM in Rental & Leasing industry. The Rental & Leasing 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.

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. LOCAMERICA ON NM 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.

Easy access to finance

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

Technology acceleration in Forth Industrial Revolution

– LOCAMERICA ON NM has witnessed rapid integration of technology during Covid-19 in the Rental & Leasing industry. As one of the leading players in the industry, LOCAMERICA ON NM needs to keep up with the evolution of technology in the Rental & Leasing 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.

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 LOCAMERICA ON NM business can come under increasing regulations regarding data privacy, data security, 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 LOCAMERICA ON NM.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, LOCAMERICA ON NM may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Rental & Leasing sector.

Environmental challenges

– LOCAMERICA ON NM 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. LOCAMERICA ON NM can take advantage of this fund but it will also bring new competitors in the Rental & Leasing industry.

Stagnating economy with rate increase

– LOCAMERICA ON NM 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 Rental & Leasing industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Rental & Leasing industry are lowering. It can presents LOCAMERICA ON NM with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Rental & Leasing sector.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, LOCAMERICA ON NM 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 LOCAMERICA ON NM prominent markets.

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Weighted SWOT Analysis of LOCAMERICA ON NM Template, Example

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

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