VirtualTek (36620) SWOT Analysis / TOWS Matrix / MBA Resources
Office Supplies
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for VirtualTek (South Korea)
Based on various researches at Oak Spring University , VirtualTek is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, talent flight as more people leaving formal jobs,
increasing energy prices, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that VirtualTek can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the VirtualTek, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which VirtualTek 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 VirtualTek can be done for the following purposes –
1. Strategic planning of VirtualTek
2. Improving business portfolio management of VirtualTek
3. Assessing feasibility of the new initiative in South Korea
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of VirtualTek
Strengths of VirtualTek | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of VirtualTek are -
High switching costs
– The high switching costs that VirtualTek has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- VirtualTek 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 VirtualTek is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at VirtualTek emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– VirtualTek has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. VirtualTek 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.
Low bargaining power of suppliers
– Suppliers of VirtualTek in the Consumer/Non-Cyclical sector have low bargaining power. VirtualTek has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps VirtualTek to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of VirtualTek comprises – understanding the underlying the factors in the Office Supplies industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– VirtualTek has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled VirtualTek to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Office Supplies
– VirtualTek is one of the leading players in the Office Supplies industry in South Korea. Over the years it has not only transformed the business landscape in the Office Supplies industry in South Korea but also across the existing markets. The ability to lead change has enabled VirtualTek in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– VirtualTek is one of the most innovative firm in Office Supplies sector.
Strong track record of project management in the Office Supplies industry
– VirtualTek is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– VirtualTek 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 Office Supplies industry. The technology infrastructure of South Korea is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Superior customer experience
– The customer experience strategy of VirtualTek in Office Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of VirtualTek
– The covid-19 pandemic has put organizational resilience at the centre of everthing VirtualTek does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of VirtualTek | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VirtualTek are -
Slow decision making process
– As mentioned earlier in the report, VirtualTek has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Supplies industry over the last five years. VirtualTek 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, VirtualTek is slow explore the new channels of communication. These new channels of communication can help VirtualTek to provide better information regarding Office Supplies products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that VirtualTek needs to have more collaboration between its sales team and marketing team. Sales professionals in the Office Supplies industry have deep experience in developing customer relationships. Marketing department at VirtualTek can leverage the sales team experience to cultivate customer relationships as VirtualTek is planning to shift buying processes online.
Skills based hiring in Office Supplies industry
– The stress on hiring functional specialists at VirtualTek 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.
Low market penetration in new markets
– Outside its home market of South Korea, VirtualTek needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, VirtualTek has high operating costs in the Office Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract VirtualTek lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Office Supplies industry, VirtualTek needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though VirtualTek has some of the most successful models in the Office Supplies industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. VirtualTek should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As VirtualTek is one of the leading players in the Office Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Office Supplies industry in last five years.
Interest costs
– Compare to the competition, VirtualTek 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.
Increasing silos among functional specialists
– The organizational structure of VirtualTek is dominated by functional specialists. It is not different from other players in the Office Supplies industry, but VirtualTek needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help VirtualTek to focus more on services in the Office Supplies industry rather than just following the product oriented approach.
VirtualTek Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of VirtualTek are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects VirtualTek can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for VirtualTek 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 VirtualTek to hire the very best people irrespective of their geographical location.
Manufacturing automation
– VirtualTek can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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.
Leveraging digital technologies
– VirtualTek 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, VirtualTek 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for VirtualTek in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Office Supplies industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, VirtualTek can use these opportunities to build new business models that can help the communities that VirtualTek operates in. Secondly it can use opportunities from government spending in Office Supplies sector.
Creating value in data economy
– The success of analytics program of VirtualTek has opened avenues for new revenue streams for the organization in Office Supplies industry. This can help VirtualTek to build a more holistic ecosystem for VirtualTek products in the Office Supplies industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. VirtualTek can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at VirtualTek 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 Office Supplies industry.
Learning at scale
– Online learning technologies has now opened space for VirtualTek 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.
Use of Bitcoin and other crypto currencies for transactions in Office Supplies industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for VirtualTek in the Office Supplies industry. Now VirtualTek can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– VirtualTek 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.
Threats VirtualTek External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of VirtualTek are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, VirtualTek 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 VirtualTek prominent markets.
Increasing wage structure of VirtualTek
– 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 VirtualTek.
Technology acceleration in Forth Industrial Revolution
– VirtualTek has witnessed rapid integration of technology during Covid-19 in the Office Supplies industry. As one of the leading players in the industry, VirtualTek needs to keep up with the evolution of technology in the Office Supplies 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 VirtualTek in Office Supplies industry. The Office Supplies 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.
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.
High dependence on third party suppliers
– VirtualTek 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.
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. VirtualTek needs to understand the core reasons impacting the Office Supplies industry. This will help it in building a better workplace.
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.
Environmental challenges
– VirtualTek 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. VirtualTek can take advantage of this fund but it will also bring new competitors in the Office Supplies industry.
Stagnating economy with rate increase
– VirtualTek 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 Office Supplies industry.
Shortening product life cycle
– it is one of the major threat that VirtualTek is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, VirtualTek may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Supplies sector.
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. VirtualTek 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.
Weighted SWOT Analysis of VirtualTek Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at VirtualTek 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 VirtualTek 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 VirtualTek 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 VirtualTek 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 VirtualTek needs to make to build a sustainable competitive advantage.