SWOT Analysis / TOWS Matrix for Santova Ltd (South Africa)
Based on various researches at Oak Spring University , Santova Ltd is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, wage bills are increasing, central banks are concerned over increasing inflation, increasing commodity prices, there is increasing trade war between United States & China,
increasing energy prices, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Santova Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Santova Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Santova 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 Santova Ltd can be done for the following purposes –
1. Strategic planning of Santova Ltd
2. Improving business portfolio management of Santova Ltd
3. Assessing feasibility of the new initiative in South Africa
4. Making a Air Courier sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Santova Ltd
Strengths of Santova Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Santova Ltd are -
Highly skilled collaborators
– Santova Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Air Courier industry. Secondly the value chain collaborators of Santova Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Santova Ltd is one of the most innovative firm in Air Courier sector.
Training and development
– Santova Ltd has one of the best training and development program in Transportation industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Air Courier
– Santova Ltd is one of the leading players in the Air Courier industry in South Africa. Over the years it has not only transformed the business landscape in the Air Courier industry in South Africa but also across the existing markets. The ability to lead change has enabled Santova Ltd 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 Santova 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.
Effective Research and Development (R&D)
– Santova Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Santova Ltd staying ahead in the Air Courier industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Santova 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 Air Courier 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.
Digital Transformation in Air Courier industry
- digital transformation varies from industry to industry. For Santova Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Santova 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.
Diverse revenue streams
– Santova Ltd is present in almost all the verticals within the Air Courier industry. This has provided Santova 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.
Successful track record of launching new products
– Santova Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Santova 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
– Santova Ltd is one of the leading players in the Air Courier 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
- Santova 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 Santova Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Santova Ltd emphasize – knowledge, initiative, and innovation.
Weaknesses of Santova Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Santova Ltd are -
Need for greater diversity
– Santova Ltd 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Santova Ltd is slow explore the new channels of communication. These new channels of communication can help Santova Ltd to provide better information regarding Air Courier products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Santova Ltd, in the dynamic environment of Air Courier industry it has struggled to respond to the nimble upstart competition. Santova Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Santova 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.
High dependence on Santova Ltd ‘s star products
– The top 2 products and services of Santova Ltd still accounts for major business revenue. This dependence on star products in Air Courier industry has resulted into insufficient focus on developing new products, even though Santova Ltd has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Santova Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Air Courier industry have deep experience in developing customer relationships. Marketing department at Santova Ltd can leverage the sales team experience to cultivate customer relationships as Santova Ltd is planning to shift buying processes online.
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 Santova Ltd supply chain. Even after few cautionary changes, Santova Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Santova Ltd vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Air Courier industry
– because of the regulatory requirements in South Africa, Santova 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 Air Courier industry.
Compensation and incentives
– The revenue per employee of Santova Ltd is just above the Air Courier 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.
Workers concerns about automation
– As automation is fast increasing in the Air Courier industry, Santova 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.
Capital Spending Reduction
– Even during the low interest decade, Santova 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 Air Courier industry using digital technology.
Santova Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Santova Ltd are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Santova 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 Air Courier industry, and it will provide faster access to the consumers.
Buying journey improvements
– Santova Ltd can improve the customer journey of consumers in the Air Courier 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.
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 Santova 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Air Courier industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Santova 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. Santova 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.
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. Santova Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Santova Ltd can use these opportunities to build new business models that can help the communities that Santova Ltd operates in. Secondly it can use opportunities from government spending in Air Courier sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Santova Ltd is facing challenges because of the dominance of functional experts in the organization. Santova Ltd can utilize new technology in the field of Air Courier industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Santova 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Santova 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.
Better consumer reach
– The expansion of the 5G network will help Santova Ltd to increase its market reach. Santova Ltd 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.
Developing new processes and practices
– Santova Ltd can develop new processes and procedures in Air Courier 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Santova Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Air Courier industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Santova Ltd in the Air Courier industry. Now Santova Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Santova Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Santova Ltd are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Santova 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 Santova Ltd.
Easy access to finance
– Easy access to finance in Air Courier industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Santova Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Stagnating economy with rate increase
– Santova 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 Air Courier industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Santova Ltd in Air Courier industry. The Air Courier 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Air Courier industry are lowering. It can presents Santova Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Air Courier sector.
Environmental challenges
– Santova 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. Santova Ltd can take advantage of this fund but it will also bring new competitors in the Air Courier industry.
Technology acceleration in Forth Industrial Revolution
– Santova Ltd has witnessed rapid integration of technology during Covid-19 in the Air Courier industry. As one of the leading players in the industry, Santova Ltd needs to keep up with the evolution of technology in the Air Courier 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 Santova Ltd is facing in Air Courier sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Santova 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 Air Courier industry regulations.
High dependence on third party suppliers
– Santova 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Santova 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 Santova Ltd prominent markets.
Weighted SWOT Analysis of Santova Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Santova 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 Santova 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 Santova 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 Santova 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 Santova Ltd needs to make to build a sustainable competitive advantage.