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 – talent flight as more people leaving formal jobs, geopolitical disruptions, there is backlash against globalization, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
High switching costs
– The high switching costs that Santova 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.
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.
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 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.
Organizational Resilience of Santova Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Santova Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Innovation driven organization
– Santova Ltd is one of the most innovative firm in Air Courier sector.
Strong track record of project management in the Air Courier industry
– Santova 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.
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 -
Employees’ less understanding of Santova Ltd strategy
– From the outside it seems that the employees of Santova 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.
No frontier risks strategy
– From the 10K / annual statement of Santova Ltd, it seems that company is thinking out the frontier risks that can impact Air Courier 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.
Slow to strategic competitive environment developments
– As Santova Ltd is one of the leading players in the Air Courier industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Air Courier industry in last five years.
Products dominated business model
– Even though Santova Ltd has some of the most successful models in the Air Courier industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Santova Ltd should strive to include more intangible value offerings along with its core products and services.
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.
Low market penetration in new markets
– Outside its home market of South Africa, Santova Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Air Courier industry
– The stress on hiring functional specialists at Santova 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.
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.
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.
High cash cycle compare to competitors
Santova Ltd has a high cash cycle compare to other players in the Air Courier industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, Santova Ltd has high operating costs in the Air Courier industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Santova Ltd lucrative customers.
Santova Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Santova Ltd are -
Creating value in data economy
– The success of analytics program of Santova Ltd has opened avenues for new revenue streams for the organization in Air Courier industry. This can help Santova Ltd to build a more holistic ecosystem for Santova Ltd products in the Air Courier industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Santova Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Air Courier sector. This continuous investment in analytics has enabled Santova Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Santova Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Santova Ltd can use the latest technology developments to improve its manufacturing and designing process in Air Courier 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.
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.
Building a culture of innovation
– managers at Santova 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 Air Courier industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Santova 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 Santova 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.
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.
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.
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.
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.
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.
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.
Threats Santova Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Santova 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. Santova 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.
Consumer confidence and its impact on Santova 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 Air Courier industry and other sectors.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Santova 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 Air Courier sector.
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.
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 Santova Ltd in the Air Courier sector and impact the bottomline 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.
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.
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.
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.
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. Santova Ltd needs to understand the core reasons impacting the Air Courier industry. This will help it in building a better workplace.
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.