SWOT Analysis / TOWS Matrix for Mustek Ltd (South Africa)
Based on various researches at Oak Spring University , Mustek Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing commodity prices,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mustek Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mustek Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mustek 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 Mustek Ltd can be done for the following purposes –
1. Strategic planning of Mustek Ltd
2. Improving business portfolio management of Mustek Ltd
3. Assessing feasibility of the new initiative in South Africa
4. Making a Computer Hardware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mustek Ltd
Strengths of Mustek Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mustek Ltd are -
High switching costs
– The high switching costs that Mustek 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.
Low bargaining power of suppliers
– Suppliers of Mustek Ltd in the Technology sector have low bargaining power. Mustek Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mustek Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Mustek 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 Mustek Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Mustek Ltd emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Computer Hardware industry
– Mustek 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.
Analytics focus
– Mustek 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 Computer Hardware 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.
Organizational Resilience of Mustek Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Mustek Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Mustek Ltd is one of the most innovative firm in Computer Hardware sector.
Successful track record of launching new products
– Mustek Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mustek 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 Computer Hardware industry
- digital transformation varies from industry to industry. For Mustek Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mustek 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.
Superior customer experience
– The customer experience strategy of Mustek Ltd in Computer Hardware industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Mustek Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mustek Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Mustek Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mustek Ltd staying ahead in the Computer Hardware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Mustek Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mustek Ltd are -
Aligning sales with marketing
– From the outside it seems that Mustek Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Hardware industry have deep experience in developing customer relationships. Marketing department at Mustek Ltd can leverage the sales team experience to cultivate customer relationships as Mustek Ltd is planning to shift buying processes online.
Employees’ less understanding of Mustek Ltd strategy
– From the outside it seems that the employees of Mustek 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.
Workers concerns about automation
– As automation is fast increasing in the Computer Hardware industry, Mustek 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.
Lack of clear differentiation of Mustek Ltd products
– To increase the profitability and margins on the products, Mustek Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Mustek Ltd, it seems that company is thinking out the frontier risks that can impact Computer Hardware 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.
Increasing silos among functional specialists
– The organizational structure of Mustek Ltd is dominated by functional specialists. It is not different from other players in the Computer Hardware industry, but Mustek Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mustek Ltd to focus more on services in the Computer Hardware industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Mustek Ltd is just above the Computer Hardware 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.
High operating costs
– Compare to the competitors, Mustek Ltd has high operating costs in the Computer Hardware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mustek Ltd lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Mustek 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 Computer Hardware industry over the last five years. Mustek 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.
Skills based hiring in Computer Hardware industry
– The stress on hiring functional specialists at Mustek 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.
High bargaining power of channel partners in Computer Hardware industry
– because of the regulatory requirements in South Africa, Mustek 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 Computer Hardware industry.
Mustek Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mustek Ltd are -
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 Mustek 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mustek Ltd can use these opportunities to build new business models that can help the communities that Mustek Ltd operates in. Secondly it can use opportunities from government spending in Computer Hardware sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mustek Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Mustek 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Hardware industry, but it has also influenced the consumer preferences. Mustek Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Mustek Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mustek 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 Computer Hardware industry, and it will provide faster access to the consumers.
Manufacturing automation
– Mustek Ltd can use the latest technology developments to improve its manufacturing and designing process in Computer Hardware 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.
Building a culture of innovation
– managers at Mustek 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 Computer Hardware industry.
Using analytics as competitive advantage
– Mustek Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Hardware sector. This continuous investment in analytics has enabled Mustek Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mustek Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mustek Ltd is facing challenges because of the dominance of functional experts in the organization. Mustek Ltd can utilize new technology in the field of Computer Hardware industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Mustek Ltd can develop new processes and procedures in Computer Hardware 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Hardware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mustek 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. Mustek 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.
Threats Mustek Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mustek Ltd are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Mustek 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.
Regulatory challenges
– Mustek 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 Computer Hardware industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Mustek 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 Computer Hardware 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, Mustek Ltd 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 Mustek Ltd prominent markets.
Consumer confidence and its impact on Mustek 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 Computer Hardware industry and other sectors.
Increasing wage structure of Mustek 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 Mustek Ltd.
Technology acceleration in Forth Industrial Revolution
– Mustek Ltd has witnessed rapid integration of technology during Covid-19 in the Computer Hardware industry. As one of the leading players in the industry, Mustek Ltd needs to keep up with the evolution of technology in the Computer Hardware 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.
Easy access to finance
– Easy access to finance in Computer Hardware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mustek Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mustek Ltd in Computer Hardware industry. The Computer Hardware 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.
High dependence on third party suppliers
– Mustek 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Hardware industry are lowering. It can presents Mustek Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Hardware sector.
Environmental challenges
– Mustek 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. Mustek Ltd can take advantage of this fund but it will also bring new competitors in the Computer Hardware industry.
Weighted SWOT Analysis of Mustek Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mustek 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 Mustek 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 Mustek 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 Mustek 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 Mustek Ltd needs to make to build a sustainable competitive advantage.