Atom Participacoes (ATOM3) SWOT Analysis / TOWS Matrix / MBA Resources
Communications Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Atom Participacoes (Brazil)
Based on various researches at Oak Spring University , Atom Participacoes is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, geopolitical disruptions, increasing household debt because of falling income levels, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Atom Participacoes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Atom Participacoes can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Atom Participacoes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Atom Participacoes 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 Atom Participacoes can be done for the following purposes –
1. Strategic planning of Atom Participacoes
2. Improving business portfolio management of Atom Participacoes
3. Assessing feasibility of the new initiative in Brazil
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Atom Participacoes
Strengths of Atom Participacoes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Atom Participacoes are -
Highly skilled collaborators
– Atom Participacoes has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of Atom Participacoes have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Atom Participacoes 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 Atom Participacoes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Atom Participacoes emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Atom Participacoes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Atom Participacoes 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.
High brand equity
– Atom Participacoes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Atom Participacoes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Communications Services industry
– Atom Participacoes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Atom Participacoes
– The covid-19 pandemic has put organizational resilience at the centre of everthing Atom Participacoes does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Atom Participacoes is one of the leading players in the Communications Services industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Atom Participacoes is one of the most innovative firm in Communications Services sector.
Low bargaining power of suppliers
– Suppliers of Atom Participacoes in the Services sector have low bargaining power. Atom Participacoes has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Atom Participacoes to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Atom Participacoes 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.
Sustainable margins compare to other players in Communications Services industry
– Atom Participacoes has clearly differentiated products in the market place. This has enabled Atom Participacoes to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped Atom Participacoes to invest into research and development (R&D) and innovation.
Analytics focus
– Atom Participacoes 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 Communications Services industry. The technology infrastructure of Brazil 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.
Weaknesses of Atom Participacoes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Atom Participacoes are -
Increasing silos among functional specialists
– The organizational structure of Atom Participacoes is dominated by functional specialists. It is not different from other players in the Communications Services industry, but Atom Participacoes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Atom Participacoes to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Atom Participacoes has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Communications Services industry over the last five years. Atom Participacoes 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.
Slow to strategic competitive environment developments
– As Atom Participacoes is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
Aligning sales with marketing
– From the outside it seems that Atom Participacoes needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Services industry have deep experience in developing customer relationships. Marketing department at Atom Participacoes can leverage the sales team experience to cultivate customer relationships as Atom Participacoes is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Brazil, Atom Participacoes needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Communications Services industry
– because of the regulatory requirements in Brazil, Atom Participacoes 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 Communications Services industry.
Interest costs
– Compare to the competition, Atom Participacoes 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.
Capital Spending Reduction
– Even during the low interest decade, Atom Participacoes 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 Communications Services industry using digital technology.
Compensation and incentives
– The revenue per employee of Atom Participacoes is just above the Communications Services 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 Atom Participacoes ‘s star products
– The top 2 products and services of Atom Participacoes still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Atom Participacoes has relatively successful track record of launching new products.
Lack of clear differentiation of Atom Participacoes products
– To increase the profitability and margins on the products, Atom Participacoes needs to provide more differentiated products than what it is currently offering in the marketplace.
Atom Participacoes Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Atom Participacoes are -
Building a culture of innovation
– managers at Atom Participacoes 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 Communications Services industry.
Manufacturing automation
– Atom Participacoes can use the latest technology developments to improve its manufacturing and designing process in Communications Services 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.
Better consumer reach
– The expansion of the 5G network will help Atom Participacoes to increase its market reach. Atom Participacoes 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Atom Participacoes 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. Atom Participacoes 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.
Learning at scale
– Online learning technologies has now opened space for Atom Participacoes 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.
Loyalty marketing
– Atom Participacoes 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.
Creating value in data economy
– The success of analytics program of Atom Participacoes has opened avenues for new revenue streams for the organization in Communications Services industry. This can help Atom Participacoes to build a more holistic ecosystem for Atom Participacoes products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Atom Participacoes can improve the customer journey of consumers in the Communications Services 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. Atom Participacoes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Atom Participacoes 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 Atom Participacoes to hire the very best people irrespective of their geographical location.
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 Atom Participacoes 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.
Developing new processes and practices
– Atom Participacoes can develop new processes and procedures in Communications Services 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 Atom Participacoes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Atom Participacoes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Atom Participacoes are -
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. Atom Participacoes needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Atom Participacoes 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 Communications Services industry.
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. Atom Participacoes 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.
High dependence on third party suppliers
– Atom Participacoes 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.
Shortening product life cycle
– it is one of the major threat that Atom Participacoes is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Atom Participacoes
– 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 Atom Participacoes.
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 Atom Participacoes.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Atom Participacoes 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 Atom Participacoes prominent markets.
Environmental challenges
– Atom Participacoes 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. Atom Participacoes can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
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 Atom Participacoes business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Atom Participacoes 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 Communications Services industry and other sectors.
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.
Easy access to finance
– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Atom Participacoes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Atom Participacoes Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Atom Participacoes 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 Atom Participacoes 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 Atom Participacoes 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 Atom Participacoes 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 Atom Participacoes needs to make to build a sustainable competitive advantage.