Sondotecnica Pref A (SOND5) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sondotecnica Pref A (Brazil)

Based on various researches at Oak Spring University , Sondotecnica Pref A is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, there is backlash against globalization, wage bills are increasing, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Sondotecnica Pref A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sondotecnica Pref A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sondotecnica Pref A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sondotecnica Pref A 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 Sondotecnica Pref A can be done for the following purposes –
1. Strategic planning of Sondotecnica Pref A
2. Improving business portfolio management of Sondotecnica Pref A
3. Assessing feasibility of the new initiative in Brazil
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sondotecnica Pref A

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Strengths of Sondotecnica Pref A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sondotecnica Pref A are -

Effective Research and Development (R&D)

– Sondotecnica Pref A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sondotecnica Pref A staying ahead in the Construction Services 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

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

– Sondotecnica Pref A is one of the leading players in the Construction 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.

Highly skilled collaborators

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

Analytics focus

– Sondotecnica Pref A 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 Construction 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.

Superior customer experience

– The customer experience strategy of Sondotecnica Pref A in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Sondotecnica Pref A 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 Sondotecnica Pref A in the Capital Goods sector have low bargaining power. Sondotecnica Pref A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sondotecnica Pref A to manage not only supply disruptions but also source products at highly competitive prices.

High brand equity

– Sondotecnica Pref A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sondotecnica Pref A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Training and development

– Sondotecnica Pref A has one of the best training and development program in Capital Goods 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.

Innovation driven organization

– Sondotecnica Pref A is one of the most innovative firm in Construction Services sector.

Cross disciplinary teams

– Horizontal connected teams at the Sondotecnica Pref A 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.

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Weaknesses of Sondotecnica Pref A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sondotecnica Pref A are -

Slow decision making process

– As mentioned earlier in the report, Sondotecnica Pref A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Sondotecnica Pref A 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 harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sondotecnica Pref A is slow explore the new channels of communication. These new channels of communication can help Sondotecnica Pref A to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Sondotecnica Pref A strategy

– From the outside it seems that the employees of Sondotecnica Pref A 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 Sondotecnica Pref A, it seems that company is thinking out the frontier risks that can impact Construction Services 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.

Skills based hiring in Construction Services industry

– The stress on hiring functional specialists at Sondotecnica Pref A 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.

Products dominated business model

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

Slow to strategic competitive environment developments

– As Sondotecnica Pref A is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.

Capital Spending Reduction

– Even during the low interest decade, Sondotecnica Pref A 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 Construction Services industry using digital technology.

Interest costs

– Compare to the competition, Sondotecnica Pref A 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 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 Sondotecnica Pref A supply chain. Even after few cautionary changes, Sondotecnica Pref A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sondotecnica Pref A vulnerable to further global disruptions in South East Asia.

High dependence on Sondotecnica Pref A ‘s star products

– The top 2 products and services of Sondotecnica Pref A still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Sondotecnica Pref A has relatively successful track record of launching new products.

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Sondotecnica Pref A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sondotecnica Pref A are -

Reforming the budgeting process

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

Manufacturing automation

– Sondotecnica Pref A can use the latest technology developments to improve its manufacturing and designing process in Construction 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sondotecnica Pref A can use these opportunities to build new business models that can help the communities that Sondotecnica Pref A operates in. Secondly it can use opportunities from government spending in Construction Services sector.

Redefining models of collaboration and team work

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

Better consumer reach

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

Using analytics as competitive advantage

– Sondotecnica Pref A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Sondotecnica Pref A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sondotecnica Pref A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 Sondotecnica Pref A 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.

Learning at scale

– Online learning technologies has now opened space for Sondotecnica Pref A 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.

Buying journey improvements

– Sondotecnica Pref A can improve the customer journey of consumers in the Construction 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Sondotecnica Pref A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.

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. Sondotecnica Pref A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– Sondotecnica Pref A can develop new processes and procedures in Construction 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.

Harnessing reconfiguration of the global supply chains

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

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Threats Sondotecnica Pref A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sondotecnica Pref A are -

Consumer confidence and its impact on Sondotecnica Pref A 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 Construction Services industry and other sectors.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Sondotecnica Pref A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services 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.

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 Sondotecnica Pref A.

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 Sondotecnica Pref A business can come under increasing regulations regarding data privacy, data security, etc.

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 Sondotecnica Pref A in the Construction Services sector and impact the bottomline of the organization.

Regulatory challenges

– Sondotecnica Pref A 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 Construction Services industry regulations.

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. Sondotecnica Pref A needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.

High dependence on third party suppliers

– Sondotecnica Pref A 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 Sondotecnica Pref A is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sondotecnica Pref A 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 Sondotecnica Pref A prominent markets.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Sondotecnica Pref A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.

Increasing wage structure of Sondotecnica Pref A

– 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 Sondotecnica Pref A.

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Weighted SWOT Analysis of Sondotecnica Pref A Template, Example

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

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