SWOT Analysis / TOWS Matrix for Contax Participacoes (Brazil)
Based on various researches at Oak Spring University , Contax Participacoes is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Contax Participacoes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Contax Participacoes can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Contax Participacoes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Contax 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 Contax Participacoes can be done for the following purposes –
1. Strategic planning of Contax Participacoes
2. Improving business portfolio management of Contax Participacoes
3. Assessing feasibility of the new initiative in Brazil
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Contax Participacoes
Strengths of Contax Participacoes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Contax Participacoes are -
Successful track record of launching new products
– Contax Participacoes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Contax 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 switching costs
– The high switching costs that Contax 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.
Ability to recruit top talent
– Contax Participacoes is one of the leading players in the Business 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.
Ability to lead change in Business Services
– Contax Participacoes is one of the leading players in the Business Services industry in Brazil. Over the years it has not only transformed the business landscape in the Business Services industry in Brazil but also across the existing markets. The ability to lead change has enabled Contax Participacoes 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 Contax Participacoes 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.
Low bargaining power of suppliers
– Suppliers of Contax Participacoes in the Services sector have low bargaining power. Contax Participacoes has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Contax Participacoes to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Business Services industry
– Contax 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.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For Contax Participacoes digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Contax Participacoes 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.
Sustainable margins compare to other players in Business Services industry
– Contax Participacoes has clearly differentiated products in the market place. This has enabled Contax Participacoes to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped Contax Participacoes to invest into research and development (R&D) and innovation.
Learning organization
- Contax 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 Contax Participacoes is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Contax Participacoes emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Contax Participacoes is one of the most innovative firm in Business Services sector.
Analytics focus
– Contax 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 Business 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 Contax Participacoes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Contax Participacoes are -
Products dominated business model
– Even though Contax Participacoes has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Contax Participacoes should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Contax 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 Business Services industry over the last five years. Contax 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 Contax Participacoes is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
Lack of clear differentiation of Contax Participacoes products
– To increase the profitability and margins on the products, Contax Participacoes needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Contax Participacoes is slow explore the new channels of communication. These new channels of communication can help Contax Participacoes to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in Brazil, Contax 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 Business Services industry.
High dependence on Contax Participacoes ‘s star products
– The top 2 products and services of Contax Participacoes still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Contax Participacoes has relatively successful track record of launching new products.
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 Contax Participacoes supply chain. Even after few cautionary changes, Contax Participacoes is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Contax Participacoes vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Contax Participacoes is dominated by functional specialists. It is not different from other players in the Business Services industry, but Contax Participacoes needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Contax Participacoes to focus more on services in the Business Services industry rather than just following the product oriented approach.
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at Contax Participacoes 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.
Aligning sales with marketing
– From the outside it seems that Contax Participacoes needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Contax Participacoes can leverage the sales team experience to cultivate customer relationships as Contax Participacoes is planning to shift buying processes online.
Contax Participacoes Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Contax Participacoes are -
Using analytics as competitive advantage
– Contax Participacoes has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled Contax Participacoes to build a competitive advantage using analytics. The analytics driven competitive advantage can help Contax Participacoes to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Contax Participacoes has opened avenues for new revenue streams for the organization in Business Services industry. This can help Contax Participacoes to build a more holistic ecosystem for Contax Participacoes products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Contax Participacoes can use the latest technology developments to improve its manufacturing and designing process in Business 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Contax Participacoes 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Contax 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 Contax Participacoes to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Contax 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. Contax 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Contax Participacoes can use these opportunities to build new business models that can help the communities that Contax Participacoes operates in. Secondly it can use opportunities from government spending in Business Services sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Contax Participacoes 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 Contax Participacoes to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Contax Participacoes is facing challenges because of the dominance of functional experts in the organization. Contax Participacoes can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Contax Participacoes can develop new processes and procedures in Business 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.
Use of Bitcoin and other crypto currencies for transactions in Business Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Contax Participacoes in the Business Services industry. Now Contax Participacoes can target international markets with far fewer capital restrictions requirements than the existing system.
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. Contax Participacoes can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Contax 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.
Threats Contax Participacoes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Contax Participacoes are -
Consumer confidence and its impact on Contax 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 Business Services industry and other sectors.
Regulatory challenges
– Contax Participacoes 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 Business Services industry regulations.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Contax Participacoes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Contax 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 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. Contax Participacoes needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Contax 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 Contax Participacoes prominent markets.
High dependence on third party suppliers
– Contax 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.
Stagnating economy with rate increase
– Contax 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 Business Services industry.
Environmental challenges
– Contax 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. Contax Participacoes can take advantage of this fund but it will also bring new competitors in the Business 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 Contax Participacoes business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Contax Participacoes has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Contax Participacoes needs to keep up with the evolution of technology in the Business Services 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Contax Participacoes in Business Services industry. The Business Services 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.
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.
Weighted SWOT Analysis of Contax Participacoes Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Contax 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 Contax 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 Contax 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 Contax 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 Contax Participacoes needs to make to build a sustainable competitive advantage.
