Tecnosolo Engenharia SA ON (TCNO3) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Tecnosolo Engenharia SA ON (Brazil)

Based on various researches at Oak Spring University , Tecnosolo Engenharia SA ON is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of Tecnosolo Engenharia SA ON

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tecnosolo Engenharia SA ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tecnosolo Engenharia SA ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tecnosolo Engenharia SA ON 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 Tecnosolo Engenharia SA ON can be done for the following purposes –
1. Strategic planning of Tecnosolo Engenharia SA ON
2. Improving business portfolio management of Tecnosolo Engenharia SA ON
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 Tecnosolo Engenharia SA ON

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Strengths of Tecnosolo Engenharia SA ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Tecnosolo Engenharia SA ON are -

Effective Research and Development (R&D)

– Tecnosolo Engenharia SA ON has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tecnosolo Engenharia SA ON 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.

Diverse revenue streams

– Tecnosolo Engenharia SA ON is present in almost all the verticals within the Construction Services industry. This has provided Tecnosolo Engenharia SA ON a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

High switching costs

– The high switching costs that Tecnosolo Engenharia SA ON 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.

Superior customer experience

– The customer experience strategy of Tecnosolo Engenharia SA ON in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Construction Services industry

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

Operational resilience

– The operational resilience strategy of Tecnosolo Engenharia SA ON comprises – understanding the underlying the factors in the Construction Services 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.

Low bargaining power of suppliers

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

Ability to lead change in Construction Services

– Tecnosolo Engenharia SA ON is one of the leading players in the Construction Services industry in Brazil. Over the years it has not only transformed the business landscape in the Construction Services industry in Brazil but also across the existing markets. The ability to lead change has enabled Tecnosolo Engenharia SA ON in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

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

Strong track record of project management in the Construction Services industry

– Tecnosolo Engenharia SA ON is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Training and development

– Tecnosolo Engenharia SA ON 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.

High brand equity

– Tecnosolo Engenharia SA ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tecnosolo Engenharia SA ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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Weaknesses of Tecnosolo Engenharia SA ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Tecnosolo Engenharia SA ON are -

Ability to respond to the competition

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

High cash cycle compare to competitors

Tecnosolo Engenharia SA ON has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Skills based hiring in Construction Services industry

– The stress on hiring functional specialists at Tecnosolo Engenharia SA ON 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.

Slow to strategic competitive environment developments

– As Tecnosolo Engenharia SA ON 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.

No frontier risks strategy

– From the 10K / annual statement of Tecnosolo Engenharia SA ON, 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.

Capital Spending Reduction

– Even during the low interest decade, Tecnosolo Engenharia SA ON 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.

Lack of clear differentiation of Tecnosolo Engenharia SA ON products

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

Aligning sales with marketing

– From the outside it seems that Tecnosolo Engenharia SA ON needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Tecnosolo Engenharia SA ON can leverage the sales team experience to cultivate customer relationships as Tecnosolo Engenharia SA ON is planning to shift buying processes online.

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 Tecnosolo Engenharia SA ON supply chain. Even after few cautionary changes, Tecnosolo Engenharia SA ON is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tecnosolo Engenharia SA ON vulnerable to further global disruptions in South East Asia.

Compensation and incentives

– The revenue per employee of Tecnosolo Engenharia SA ON is just above the Construction 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.

Increasing silos among functional specialists

– The organizational structure of Tecnosolo Engenharia SA ON is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Tecnosolo Engenharia SA ON needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tecnosolo Engenharia SA ON to focus more on services in the Construction Services industry rather than just following the product oriented approach.

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Tecnosolo Engenharia SA ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Tecnosolo Engenharia SA ON are -

Creating value in data economy

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

Learning at scale

– Online learning technologies has now opened space for Tecnosolo Engenharia SA ON 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.

Better consumer reach

– The expansion of the 5G network will help Tecnosolo Engenharia SA ON to increase its market reach. Tecnosolo Engenharia SA ON 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Tecnosolo Engenharia SA ON 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.

Reforming the budgeting process

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

Using analytics as competitive advantage

– Tecnosolo Engenharia SA ON 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 Tecnosolo Engenharia SA ON to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tecnosolo Engenharia SA ON to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Developing new processes and practices

– Tecnosolo Engenharia SA ON 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.

Increase in government spending

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

Leveraging digital technologies

– Tecnosolo Engenharia SA ON can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Harnessing reconfiguration of the global supply chains

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

Use of Bitcoin and other crypto currencies for transactions in Construction Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tecnosolo Engenharia SA ON in the Construction Services industry. Now Tecnosolo Engenharia SA ON can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Tecnosolo Engenharia SA ON is facing challenges because of the dominance of functional experts in the organization. Tecnosolo Engenharia SA ON 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.

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 Tecnosolo Engenharia SA ON 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.

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Threats Tecnosolo Engenharia SA ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Tecnosolo Engenharia SA ON are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Tecnosolo Engenharia SA ON 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.

Shortening product life cycle

– it is one of the major threat that Tecnosolo Engenharia SA ON is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Tecnosolo Engenharia SA ON 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.

Increasing wage structure of Tecnosolo Engenharia SA ON

– 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 Tecnosolo Engenharia SA ON.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Tecnosolo Engenharia SA ON in Construction Services industry. The Construction 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.

Stagnating economy with rate increase

– Tecnosolo Engenharia SA ON 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 Construction 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 Tecnosolo Engenharia SA ON business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Tecnosolo Engenharia SA ON 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.

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 Tecnosolo Engenharia SA ON in the Construction Services sector and impact the bottomline of the organization.

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. Tecnosolo Engenharia SA ON needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.

Easy access to finance

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

Environmental challenges

– Tecnosolo Engenharia SA ON 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. Tecnosolo Engenharia SA ON can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

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Weighted SWOT Analysis of Tecnosolo Engenharia SA ON Template, Example

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

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