SWOT Analysis / TOWS Matrix for Calgro M3 Holdings Ltd (South Africa)
Based on various researches at Oak Spring University , Calgro M3 Holdings Ltd is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, geopolitical disruptions, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Calgro M3 Holdings Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Calgro M3 Holdings Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Calgro M3 Holdings Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Calgro M3 Holdings 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 Calgro M3 Holdings Ltd can be done for the following purposes –
1. Strategic planning of Calgro M3 Holdings Ltd
2. Improving business portfolio management of Calgro M3 Holdings Ltd
3. Assessing feasibility of the new initiative in South Africa
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Calgro M3 Holdings Ltd
Strengths of Calgro M3 Holdings Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Calgro M3 Holdings Ltd are -
Successful track record of launching new products
– Calgro M3 Holdings Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Calgro M3 Holdings Ltd 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.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Calgro M3 Holdings Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Calgro M3 Holdings 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.
Effective Research and Development (R&D)
– Calgro M3 Holdings Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Calgro M3 Holdings Ltd staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Construction Services industry
– Calgro M3 Holdings Ltd has clearly differentiated products in the market place. This has enabled Calgro M3 Holdings Ltd to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Calgro M3 Holdings Ltd to invest into research and development (R&D) and innovation.
Training and development
– Calgro M3 Holdings Ltd has one of the best training and development program in Capital Goods 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.
Organizational Resilience of Calgro M3 Holdings Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Calgro M3 Holdings Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Calgro M3 Holdings Ltd is one of the most innovative firm in Construction Services sector.
High switching costs
– The high switching costs that Calgro M3 Holdings Ltd 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.
Operational resilience
– The operational resilience strategy of Calgro M3 Holdings Ltd comprises – understanding the underlying the factors in the Construction 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.
Low bargaining power of suppliers
– Suppliers of Calgro M3 Holdings Ltd in the Capital Goods sector have low bargaining power. Calgro M3 Holdings Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Calgro M3 Holdings Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Calgro M3 Holdings Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Calgro M3 Holdings Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Calgro M3 Holdings Ltd is present in almost all the verticals within the Construction Services industry. This has provided Calgro M3 Holdings Ltd 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.
Weaknesses of Calgro M3 Holdings Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Calgro M3 Holdings Ltd are -
High cash cycle compare to competitors
Calgro M3 Holdings Ltd has a high cash cycle compare to other players in the Construction 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.
No frontier risks strategy
– From the 10K / annual statement of Calgro M3 Holdings Ltd, it seems that company is thinking out the frontier risks that can impact Construction 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.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Calgro M3 Holdings Ltd 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.
Low market penetration in new markets
– Outside its home market of South Africa, Calgro M3 Holdings Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of Calgro M3 Holdings Ltd strategy
– From the outside it seems that the employees of Calgro M3 Holdings 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.
Aligning sales with marketing
– From the outside it seems that Calgro M3 Holdings Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Calgro M3 Holdings Ltd can leverage the sales team experience to cultivate customer relationships as Calgro M3 Holdings Ltd is planning to shift buying processes online.
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in South Africa, Calgro M3 Holdings Ltd 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 Construction Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at Calgro M3 Holdings Ltd, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Calgro M3 Holdings Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Calgro M3 Holdings Ltd products
– To increase the profitability and margins on the products, Calgro M3 Holdings Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Calgro M3 Holdings Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Calgro M3 Holdings Ltd 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.
Products dominated business model
– Even though Calgro M3 Holdings Ltd has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Calgro M3 Holdings Ltd should strive to include more intangible value offerings along with its core products and services.
Calgro M3 Holdings Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Calgro M3 Holdings Ltd are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Calgro M3 Holdings Ltd 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. Calgro M3 Holdings Ltd 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.
Using analytics as competitive advantage
– Calgro M3 Holdings Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Calgro M3 Holdings Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Calgro M3 Holdings Ltd 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 Calgro M3 Holdings Ltd 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.
Loyalty marketing
– Calgro M3 Holdings 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Calgro M3 Holdings Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Calgro M3 Holdings Ltd is facing challenges because of the dominance of functional experts in the organization. Calgro M3 Holdings Ltd can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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, Calgro M3 Holdings Ltd can use these opportunities to build new business models that can help the communities that Calgro M3 Holdings Ltd operates in. Secondly it can use opportunities from government spending in Construction Services sector.
Leveraging digital technologies
– Calgro M3 Holdings 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.
Buying journey improvements
– Calgro M3 Holdings Ltd can improve the customer journey of consumers in the Construction 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.
Use of Bitcoin and other crypto currencies for transactions in Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Calgro M3 Holdings Ltd in the Construction Services industry. Now Calgro M3 Holdings Ltd 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. Calgro M3 Holdings Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Calgro M3 Holdings 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 Calgro M3 Holdings 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.
Learning at scale
– Online learning technologies has now opened space for Calgro M3 Holdings Ltd 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.
Threats Calgro M3 Holdings Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Calgro M3 Holdings Ltd are -
Increasing wage structure of Calgro M3 Holdings Ltd
– 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 Calgro M3 Holdings Ltd.
High dependence on third party suppliers
– Calgro M3 Holdings 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.
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 Calgro M3 Holdings Ltd business can come under increasing regulations regarding data privacy, data security, 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.
Regulatory challenges
– Calgro M3 Holdings Ltd 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 Construction Services industry regulations.
Consumer confidence and its impact on Calgro M3 Holdings 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 Construction Services industry and other sectors.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Calgro M3 Holdings Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Calgro M3 Holdings Ltd needs to understand the core reasons impacting the Construction Services 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, Calgro M3 Holdings Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
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.
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. Calgro M3 Holdings 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Calgro M3 Holdings Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
Stagnating economy with rate increase
– Calgro M3 Holdings 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 Construction Services industry.
Weighted SWOT Analysis of Calgro M3 Holdings Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Calgro M3 Holdings 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 Calgro M3 Holdings 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 Calgro M3 Holdings 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 Calgro M3 Holdings 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 Calgro M3 Holdings Ltd needs to make to build a sustainable competitive advantage.