York Timber Holdings Ltd (YRKJ) SWOT Analysis / TOWS Matrix / MBA Resources
Forestry & Wood Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for York Timber Holdings Ltd (South Africa)
Based on various researches at Oak Spring University , York Timber Holdings Ltd is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, cloud computing is disrupting traditional business models, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of York Timber Holdings Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that York Timber Holdings Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the York Timber Holdings Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which York Timber 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 York Timber Holdings Ltd can be done for the following purposes –
1. Strategic planning of York Timber Holdings Ltd
2. Improving business portfolio management of York Timber Holdings Ltd
3. Assessing feasibility of the new initiative in South Africa
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of York Timber Holdings Ltd
Strengths of York Timber Holdings Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of York Timber Holdings Ltd are -
Cross disciplinary teams
– Horizontal connected teams at the York Timber Holdings Ltd 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.
Analytics focus
– York Timber Holdings Ltd 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 Forestry & Wood Products industry. The technology infrastructure of South Africa 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.
Sustainable margins compare to other players in Forestry & Wood Products industry
– York Timber Holdings Ltd has clearly differentiated products in the market place. This has enabled York Timber Holdings Ltd to fetch slight price premium compare to the competitors in the Forestry & Wood Products industry. The sustainable margins have also helped York Timber Holdings Ltd to invest into research and development (R&D) and innovation.
Strong track record of project management in the Forestry & Wood Products industry
– York Timber Holdings Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of York Timber Holdings Ltd in Forestry & Wood Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Forestry & Wood Products
– York Timber Holdings Ltd is one of the leading players in the Forestry & Wood Products industry in South Africa. Over the years it has not only transformed the business landscape in the Forestry & Wood Products industry in South Africa but also across the existing markets. The ability to lead change has enabled York Timber Holdings Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of York Timber Holdings Ltd comprises – understanding the underlying the factors in the Forestry & Wood Products 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 York Timber Holdings Ltd in the Basic Materials sector have low bargaining power. York Timber Holdings Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps York Timber Holdings Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– York Timber Holdings Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. York Timber 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.
Ability to recruit top talent
– York Timber Holdings Ltd is one of the leading players in the Forestry & Wood Products industry in South Africa. It is in a position to attract the best talent available in South Africa. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- York Timber Holdings Ltd 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 York Timber Holdings Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at York Timber Holdings Ltd emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– York Timber Holdings Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – York Timber Holdings Ltd staying ahead in the Forestry & Wood Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of York Timber Holdings Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of York Timber Holdings Ltd are -
Low market penetration in new markets
– Outside its home market of South Africa, York Timber Holdings Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, York Timber Holdings Ltd 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.
Workers concerns about automation
– As automation is fast increasing in the Forestry & Wood Products industry, York Timber Holdings Ltd 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 York Timber Holdings Ltd, it seems that company is thinking out the frontier risks that can impact Forestry & Wood Products 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.
Capital Spending Reduction
– Even during the low interest decade, York Timber Holdings Ltd 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 Forestry & Wood Products industry using digital technology.
Slow to strategic competitive environment developments
– As York Timber Holdings Ltd is one of the leading players in the Forestry & Wood Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Forestry & Wood Products industry in last five years.
Aligning sales with marketing
– From the outside it seems that York Timber Holdings Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Forestry & Wood Products industry have deep experience in developing customer relationships. Marketing department at York Timber Holdings Ltd can leverage the sales team experience to cultivate customer relationships as York Timber Holdings Ltd is planning to shift buying processes online.
High bargaining power of channel partners in Forestry & Wood Products industry
– because of the regulatory requirements in South Africa, York Timber 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 Forestry & Wood Products industry.
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 York Timber Holdings Ltd supply chain. Even after few cautionary changes, York Timber Holdings Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left York Timber Holdings Ltd vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, York Timber Holdings Ltd has high operating costs in the Forestry & Wood Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract York Timber Holdings Ltd lucrative customers.
Compensation and incentives
– The revenue per employee of York Timber Holdings Ltd is just above the Forestry & Wood Products industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
York Timber Holdings Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of York Timber Holdings Ltd are -
Leveraging digital technologies
– York Timber 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.
Creating value in data economy
– The success of analytics program of York Timber Holdings Ltd has opened avenues for new revenue streams for the organization in Forestry & Wood Products industry. This can help York Timber Holdings Ltd to build a more holistic ecosystem for York Timber Holdings Ltd products in the Forestry & Wood Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for York Timber 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.
Buying journey improvements
– York Timber Holdings Ltd can improve the customer journey of consumers in the Forestry & Wood Products 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.
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. York Timber Holdings Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– York Timber Holdings Ltd can develop new processes and procedures in Forestry & Wood Products 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, York Timber Holdings Ltd 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.
Building a culture of innovation
– managers at York Timber Holdings Ltd 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 Forestry & Wood Products industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for York Timber Holdings Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Forestry & Wood Products industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– York Timber Holdings Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Forestry & Wood Products sector. This continuous investment in analytics has enabled York Timber Holdings Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help York Timber Holdings Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– York Timber Holdings Ltd can use the latest technology developments to improve its manufacturing and designing process in Forestry & Wood Products 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, York Timber 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 York Timber 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.
Use of Bitcoin and other crypto currencies for transactions in Forestry & Wood Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for York Timber Holdings Ltd in the Forestry & Wood Products industry. Now York Timber Holdings Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Threats York Timber Holdings Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of York Timber Holdings Ltd are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for York Timber Holdings Ltd in the Forestry & Wood Products sector and impact the bottomline of the organization.
Environmental challenges
– York Timber Holdings Ltd 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. York Timber Holdings Ltd can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
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 York Timber Holdings Ltd in Forestry & Wood Products industry. The Forestry & Wood Products 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.
Easy access to finance
– Easy access to finance in Forestry & Wood Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. York Timber 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.
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. York Timber 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.
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 York Timber Holdings Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– York Timber Holdings Ltd has witnessed rapid integration of technology during Covid-19 in the Forestry & Wood Products industry. As one of the leading players in the industry, York Timber Holdings Ltd needs to keep up with the evolution of technology in the Forestry & Wood Products 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 York Timber Holdings Ltd is facing in Forestry & Wood Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 York Timber Holdings Ltd.
Stagnating economy with rate increase
– York Timber 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 Forestry & Wood Products industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Forestry & Wood Products industry are lowering. It can presents York Timber Holdings Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Forestry & Wood Products sector.
Weighted SWOT Analysis of York Timber Holdings Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at York Timber 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 York Timber 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 York Timber 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 York Timber 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 York Timber Holdings Ltd needs to make to build a sustainable competitive advantage.
