Tsogo Sun (TSHJ) SWOT Analysis / TOWS Matrix / MBA Resources
Casinos & Gaming
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Tsogo Sun (South Africa)
Based on various researches at Oak Spring University , Tsogo Sun is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, technology disruption,
increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tsogo Sun can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tsogo Sun, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tsogo Sun 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 Tsogo Sun can be done for the following purposes –
1. Strategic planning of Tsogo Sun
2. Improving business portfolio management of Tsogo Sun
3. Assessing feasibility of the new initiative in South Africa
4. Making a Casinos & Gaming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tsogo Sun
Strengths of Tsogo Sun | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tsogo Sun are -
Diverse revenue streams
– Tsogo Sun is present in almost all the verticals within the Casinos & Gaming industry. This has provided Tsogo Sun 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.
High brand equity
– Tsogo Sun has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tsogo Sun to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Casinos & Gaming
– Tsogo Sun is one of the leading players in the Casinos & Gaming industry in South Africa. Over the years it has not only transformed the business landscape in the Casinos & Gaming industry in South Africa but also across the existing markets. The ability to lead change has enabled Tsogo Sun in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Tsogo Sun 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.
Highly skilled collaborators
– Tsogo Sun has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Casinos & Gaming industry. Secondly the value chain collaborators of Tsogo Sun have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Tsogo Sun has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tsogo Sun 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.
Effective Research and Development (R&D)
– Tsogo Sun has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tsogo Sun staying ahead in the Casinos & Gaming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Tsogo Sun 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 Tsogo Sun is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Tsogo Sun emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Tsogo Sun comprises – understanding the underlying the factors in the Casinos & Gaming 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.
Strong track record of project management in the Casinos & Gaming industry
– Tsogo Sun is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Casinos & Gaming industry
- digital transformation varies from industry to industry. For Tsogo Sun digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tsogo Sun 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
– Tsogo Sun 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.
Weaknesses of Tsogo Sun | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tsogo Sun are -
Lack of clear differentiation of Tsogo Sun products
– To increase the profitability and margins on the products, Tsogo Sun needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Tsogo Sun 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 Casinos & Gaming industry using digital technology.
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 Tsogo Sun supply chain. Even after few cautionary changes, Tsogo Sun is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tsogo Sun vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of South Africa, Tsogo Sun needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Casinos & Gaming industry
– The stress on hiring functional specialists at Tsogo Sun 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, Tsogo Sun 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.
Increasing silos among functional specialists
– The organizational structure of Tsogo Sun is dominated by functional specialists. It is not different from other players in the Casinos & Gaming industry, but Tsogo Sun needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tsogo Sun to focus more on services in the Casinos & Gaming industry rather than just following the product oriented approach.
Need for greater diversity
– Tsogo Sun 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 Tsogo Sun has some of the most successful models in the Casinos & Gaming industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Tsogo Sun should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Tsogo Sun has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Casinos & Gaming industry over the last five years. Tsogo Sun 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.
Aligning sales with marketing
– From the outside it seems that Tsogo Sun needs to have more collaboration between its sales team and marketing team. Sales professionals in the Casinos & Gaming industry have deep experience in developing customer relationships. Marketing department at Tsogo Sun can leverage the sales team experience to cultivate customer relationships as Tsogo Sun is planning to shift buying processes online.
Tsogo Sun Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tsogo Sun are -
Manufacturing automation
– Tsogo Sun can use the latest technology developments to improve its manufacturing and designing process in Casinos & Gaming 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.
Better consumer reach
– The expansion of the 5G network will help Tsogo Sun to increase its market reach. Tsogo Sun 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.
Loyalty marketing
– Tsogo Sun 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tsogo Sun can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tsogo Sun in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Casinos & Gaming industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tsogo Sun 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tsogo Sun 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 Tsogo Sun to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tsogo Sun 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 Tsogo Sun to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Tsogo Sun 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Casinos & Gaming industry, but it has also influenced the consumer preferences. Tsogo Sun can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Tsogo Sun has opened avenues for new revenue streams for the organization in Casinos & Gaming industry. This can help Tsogo Sun to build a more holistic ecosystem for Tsogo Sun products in the Casinos & Gaming 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 Casinos & Gaming industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tsogo Sun in the Casinos & Gaming industry. Now Tsogo Sun can target international markets with far fewer capital restrictions requirements than the existing system.
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. Tsogo Sun can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Tsogo Sun External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tsogo Sun are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Casinos & Gaming industry are lowering. It can presents Tsogo Sun with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Casinos & Gaming sector.
Easy access to finance
– Easy access to finance in Casinos & Gaming industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tsogo Sun can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Tsogo Sun 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tsogo Sun 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 Tsogo Sun prominent markets.
Consumer confidence and its impact on Tsogo Sun 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 Casinos & Gaming industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Tsogo Sun has witnessed rapid integration of technology during Covid-19 in the Casinos & Gaming industry. As one of the leading players in the industry, Tsogo Sun needs to keep up with the evolution of technology in the Casinos & Gaming 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.
Shortening product life cycle
– it is one of the major threat that Tsogo Sun is facing in Casinos & Gaming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tsogo Sun in Casinos & Gaming industry. The Casinos & Gaming 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.
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
– Tsogo Sun 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 Casinos & Gaming industry.
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. Tsogo Sun needs to understand the core reasons impacting the Casinos & Gaming 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, Tsogo Sun may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Casinos & Gaming sector.
Weighted SWOT Analysis of Tsogo Sun Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tsogo Sun 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 Tsogo Sun 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 Tsogo Sun 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 Tsogo Sun 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 Tsogo Sun needs to make to build a sustainable competitive advantage.