INFOvine (115310) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for INFOvine (South Korea)

Based on various researches at Oak Spring University , INFOvine is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, central banks are concerned over increasing inflation, increasing commodity prices, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of INFOvine

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that INFOvine can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the INFOvine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which INFOvine 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of INFOvine can be done for the following purposes –
1. Strategic planning of INFOvine
2. Improving business portfolio management of INFOvine
3. Assessing feasibility of the new initiative in South Korea
4. Making a Computer Networks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of INFOvine

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Strengths of INFOvine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of INFOvine are -

Sustainable margins compare to other players in Computer Networks industry

– INFOvine has clearly differentiated products in the market place. This has enabled INFOvine to fetch slight price premium compare to the competitors in the Computer Networks industry. The sustainable margins have also helped INFOvine to invest into research and development (R&D) and innovation.

Analytics focus

– INFOvine 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 Networks industry. The technology infrastructure of South Korea 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.

Operational resilience

– The operational resilience strategy of INFOvine comprises – understanding the underlying the factors in the Computer Networks 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.

High switching costs

– The high switching costs that INFOvine 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.

Learning organization

- INFOvine 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 INFOvine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at INFOvine emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

– INFOvine has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Networks industry. Secondly the value chain collaborators of INFOvine have helped the firm to develop new products and bring them quickly to the marketplace.

Strong track record of project management in the Computer Networks industry

– INFOvine 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 INFOvine in Computer Networks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Effective Research and Development (R&D)

– INFOvine has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – INFOvine staying ahead in the Computer Networks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Successful track record of launching new products

– INFOvine has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. INFOvine 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.

Organizational Resilience of INFOvine

– The covid-19 pandemic has put organizational resilience at the centre of everthing INFOvine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Low bargaining power of suppliers

– Suppliers of INFOvine in the Technology sector have low bargaining power. INFOvine has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps INFOvine to manage not only supply disruptions but also source products at highly competitive prices.

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Weaknesses of INFOvine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of INFOvine are -

High operating costs

– Compare to the competitors, INFOvine has high operating costs in the Computer Networks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract INFOvine lucrative customers.

Products dominated business model

– Even though INFOvine has some of the most successful models in the Computer Networks industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. INFOvine should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

INFOvine has a high cash cycle compare to other players in the Computer Networks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Lack of clear differentiation of INFOvine products

– To increase the profitability and margins on the products, INFOvine needs to provide more differentiated products than what it is currently offering in the marketplace.

High bargaining power of channel partners in Computer Networks industry

– because of the regulatory requirements in South Korea, INFOvine 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 Networks industry.

Capital Spending Reduction

– Even during the low interest decade, INFOvine 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 Computer Networks industry using digital technology.

Workers concerns about automation

– As automation is fast increasing in the Computer Networks industry, INFOvine 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.

Ability to respond to the competition

– As the decision making is very deliberative at INFOvine, in the dynamic environment of Computer Networks industry it has struggled to respond to the nimble upstart competition. INFOvine has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring in Computer Networks industry

– The stress on hiring functional specialists at INFOvine 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 INFOvine is just above the Computer Networks 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 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 INFOvine supply chain. Even after few cautionary changes, INFOvine is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left INFOvine vulnerable to further global disruptions in South East Asia.

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INFOvine Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of INFOvine are -

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. INFOvine can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Buying journey improvements

– INFOvine can improve the customer journey of consumers in the Computer Networks 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, INFOvine 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.

Learning at scale

– Online learning technologies has now opened space for INFOvine 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.

Creating value in data economy

– The success of analytics program of INFOvine has opened avenues for new revenue streams for the organization in Computer Networks industry. This can help INFOvine to build a more holistic ecosystem for INFOvine products in the Computer Networks industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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 INFOvine 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

– INFOvine 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.

Better consumer reach

– The expansion of the 5G network will help INFOvine to increase its market reach. INFOvine 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for INFOvine to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for INFOvine to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, INFOvine 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 INFOvine to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects INFOvine can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, INFOvine is facing challenges because of the dominance of functional experts in the organization. INFOvine can utilize new technology in the field of Computer Networks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Developing new processes and practices

– INFOvine can develop new processes and procedures in Computer Networks 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.

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Threats INFOvine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of INFOvine 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 INFOvine

– 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 INFOvine.

Consumer confidence and its impact on INFOvine 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 Networks industry and other sectors.

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. INFOvine 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.

Shortening product life cycle

– it is one of the major threat that INFOvine is facing in Computer Networks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for INFOvine in Computer Networks industry. The Computer Networks 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.

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 INFOvine in the Computer Networks sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– INFOvine has witnessed rapid integration of technology during Covid-19 in the Computer Networks industry. As one of the leading players in the industry, INFOvine needs to keep up with the evolution of technology in the Computer Networks 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.

Environmental challenges

– INFOvine 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. INFOvine can take advantage of this fund but it will also bring new competitors in the Computer Networks industry.

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. INFOvine needs to understand the core reasons impacting the Computer Networks 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, INFOvine 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 Networks sector.

Stagnating economy with rate increase

– INFOvine 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 Computer Networks industry.

Easy access to finance

– Easy access to finance in Computer Networks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. INFOvine can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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Weighted SWOT Analysis of INFOvine Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at INFOvine 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 INFOvine 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 INFOvine 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 INFOvine 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 INFOvine needs to make to build a sustainable competitive advantage.

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