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 – technology disruption, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing energy prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, 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 -
Cross disciplinary teams
– Horizontal connected teams at the VirtualTek 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 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.
Sustainable margins compare to other players in Office Supplies industry
– VirtualTek has clearly differentiated products in the market place. This has enabled VirtualTek to fetch slight price premium compare to the competitors in the Office Supplies industry. The sustainable margins have also helped VirtualTek to invest into research and development (R&D) and innovation.
Diverse revenue streams
– VirtualTek is present in almost all the verticals within the Office Supplies industry. This has provided VirtualTek 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.
Innovation driven organization
– VirtualTek is one of the most innovative firm in Office Supplies sector.
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.
Ability to recruit top talent
– VirtualTek is one of the leading players in the Office Supplies industry in South Korea. It is in a position to attract the best talent available in South Korea. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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.
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.
Weaknesses of VirtualTek | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VirtualTek are -
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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative at VirtualTek, in the dynamic environment of Office Supplies industry it has struggled to respond to the nimble upstart competition. VirtualTek has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Lack of clear differentiation of VirtualTek products
– To increase the profitability and margins on the products, VirtualTek needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High cash cycle compare to competitors
VirtualTek has a high cash cycle compare to other players in the Office Supplies industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Office Supplies industry
– because of the regulatory requirements in South Korea, VirtualTek 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 Office Supplies industry.
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.
VirtualTek Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of VirtualTek are -
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Office Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. VirtualTek 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. VirtualTek 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.
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.
Using analytics as competitive advantage
– VirtualTek has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Office Supplies sector. This continuous investment in analytics has enabled VirtualTek to build a competitive advantage using analytics. The analytics driven competitive advantage can help VirtualTek to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, VirtualTek 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 VirtualTek to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Developing new processes and practices
– VirtualTek can develop new processes and procedures in Office Supplies 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.
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.
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 VirtualTek 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 VirtualTek External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of VirtualTek are -
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 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.
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.
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.
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 VirtualTek business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Office Supplies industry are lowering. It can presents VirtualTek with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Supplies sector.
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.
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.
Easy access to finance
– Easy access to finance in Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. VirtualTek can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 VirtualTek in the Office Supplies sector and impact the bottomline of the organization.
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.
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.