SWOT Analysis / TOWS Matrix for Agilent Technologies (United States)
Based on various researches at Oak Spring University , Agilent Technologies is operating in a macro-environment that has been destablized by – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, cloud computing is disrupting traditional business models,
increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Agilent Technologies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Agilent Technologies can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agilent Technologies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agilent Technologies 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 Agilent Technologies can be done for the following purposes –
1. Strategic planning of Agilent Technologies
2. Improving business portfolio management of Agilent Technologies
3. Assessing feasibility of the new initiative in United States
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Agilent Technologies
Strengths of Agilent Technologies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agilent Technologies are -
High brand equity
– Agilent Technologies has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agilent Technologies to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Agilent Technologies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Agilent Technologies 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
– Agilent Technologies is one of the leading players in the Scientific & Technical Instr. industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Agilent Technologies 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.
Organizational Resilience of Agilent Technologies
– The covid-19 pandemic has put organizational resilience at the centre of everthing Agilent Technologies does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Scientific & Technical Instr. industry
– Agilent Technologies is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Agilent Technologies has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Agilent Technologies staying ahead in the Scientific & Technical Instr. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Agilent Technologies comprises – understanding the underlying the factors in the Scientific & Technical Instr. 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.
Digital Transformation in Scientific & Technical Instr. industry
- digital transformation varies from industry to industry. For Agilent Technologies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Agilent Technologies 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 Scientific & Technical Instr. industry
– Agilent Technologies has clearly differentiated products in the market place. This has enabled Agilent Technologies to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Agilent Technologies to invest into research and development (R&D) and innovation.
Ability to lead change in Scientific & Technical Instr.
– Agilent Technologies is one of the leading players in the Scientific & Technical Instr. industry in United States. Over the years it has not only transformed the business landscape in the Scientific & Technical Instr. industry in United States but also across the existing markets. The ability to lead change has enabled Agilent Technologies in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Agilent Technologies 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 Agilent Technologies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Agilent Technologies emphasize – knowledge, initiative, and innovation.
Weaknesses of Agilent Technologies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Agilent Technologies are -
No frontier risks strategy
– From the 10K / annual statement of Agilent Technologies, it seems that company is thinking out the frontier risks that can impact Scientific & Technical Instr. 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.
Compensation and incentives
– The revenue per employee of Agilent Technologies is just above the Scientific & Technical Instr. 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.
High operating costs
– Compare to the competitors, Agilent Technologies has high operating costs in the Scientific & Technical Instr. industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Agilent Technologies lucrative customers.
Products dominated business model
– Even though Agilent Technologies has some of the most successful models in the Scientific & Technical Instr. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Agilent Technologies should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Agilent Technologies has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Agilent Technologies has a high cash cycle compare to other players in the Scientific & Technical Instr. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Agilent Technologies 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.
Aligning sales with marketing
– From the outside it seems that Agilent Technologies needs to have more collaboration between its sales team and marketing team. Sales professionals in the Scientific & Technical Instr. industry have deep experience in developing customer relationships. Marketing department at Agilent Technologies can leverage the sales team experience to cultivate customer relationships as Agilent Technologies is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Agilent Technologies is dominated by functional specialists. It is not different from other players in the Scientific & Technical Instr. industry, but Agilent Technologies needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Agilent Technologies to focus more on services in the Scientific & Technical Instr. industry rather than just following the product oriented approach.
Employees’ less understanding of Agilent Technologies strategy
– From the outside it seems that the employees of Agilent Technologies 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.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in United States, Agilent Technologies 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 Scientific & Technical Instr. industry.
Agilent Technologies Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Agilent Technologies are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Scientific & Technical Instr. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Agilent Technologies 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. Agilent Technologies 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.
Building a culture of innovation
– managers at Agilent Technologies 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 Scientific & Technical Instr. industry.
Developing new processes and practices
– Agilent Technologies can develop new processes and procedures in Scientific & Technical Instr. 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.
Loyalty marketing
– Agilent Technologies 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
– Agilent Technologies has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Scientific & Technical Instr. sector. This continuous investment in analytics has enabled Agilent Technologies to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agilent Technologies to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Agilent Technologies can use the latest technology developments to improve its manufacturing and designing process in Scientific & Technical Instr. 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
– Agilent Technologies 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.
Use of Bitcoin and other crypto currencies for transactions in Scientific & Technical Instr. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Agilent Technologies in the Scientific & Technical Instr. industry. Now Agilent Technologies can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agilent Technologies can use these opportunities to build new business models that can help the communities that Agilent Technologies operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Buying journey improvements
– Agilent Technologies can improve the customer journey of consumers in the Scientific & Technical Instr. 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Agilent Technologies 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 Agilent Technologies to hire the very best people irrespective of their geographical location.
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 Agilent Technologies 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Agilent Technologies 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 Agilent Technologies to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Agilent Technologies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Agilent Technologies are -
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 Agilent Technologies.
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. Agilent Technologies 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Agilent Technologies may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Scientific & Technical Instr. sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Agilent Technologies 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 Agilent Technologies prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Agilent Technologies in Scientific & Technical Instr. industry. The Scientific & Technical Instr. 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.
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. Agilent Technologies needs to understand the core reasons impacting the Scientific & Technical Instr. industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Scientific & Technical Instr. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Agilent Technologies 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
– Agilent Technologies 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. Agilent Technologies can take advantage of this fund but it will also bring new competitors in the Scientific & Technical Instr. industry.
Shortening product life cycle
– it is one of the major threat that Agilent Technologies is facing in Scientific & Technical Instr. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Agilent Technologies in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
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.
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 Agilent Technologies business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Agilent Technologies 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 Scientific & Technical Instr. industry regulations.
Weighted SWOT Analysis of Agilent Technologies Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies 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 Agilent Technologies needs to make to build a sustainable competitive advantage.