Cambium (ABCD) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Cambium (United States)
Based on various researches at Oak Spring University , Cambium is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing transportation and logistics costs, wage bills are increasing, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cambium can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cambium, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cambium 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 Cambium can be done for the following purposes –
1. Strategic planning of Cambium
2. Improving business portfolio management of Cambium
3. Assessing feasibility of the new initiative in United States
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cambium
Strengths of Cambium | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cambium are -
Operational resilience
– The operational resilience strategy of Cambium comprises – understanding the underlying the factors in the Schools 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
– Cambium has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cambium to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Cambium is one of the leading players in the Schools 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.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For Cambium digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cambium 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.
Highly skilled collaborators
– Cambium has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Schools industry. Secondly the value chain collaborators of Cambium have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Cambium in Schools industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Cambium 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 Schools industry. The technology infrastructure of United States 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.
Training and development
– Cambium has one of the best training and development program in Services 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.
Effective Research and Development (R&D)
– Cambium has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cambium staying ahead in the Schools industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Cambium 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.
Diverse revenue streams
– Cambium is present in almost all the verticals within the Schools industry. This has provided Cambium 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.
Sustainable margins compare to other players in Schools industry
– Cambium has clearly differentiated products in the market place. This has enabled Cambium to fetch slight price premium compare to the competitors in the Schools industry. The sustainable margins have also helped Cambium to invest into research and development (R&D) and innovation.
Weaknesses of Cambium | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cambium are -
High bargaining power of channel partners in Schools industry
– because of the regulatory requirements in United States, Cambium 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 Schools industry.
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 Cambium supply chain. Even after few cautionary changes, Cambium is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cambium vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Cambium has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Schools industry over the last five years. Cambium 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.
High operating costs
– Compare to the competitors, Cambium has high operating costs in the Schools industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cambium lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of Cambium, it seems that company is thinking out the frontier risks that can impact Schools 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.
Ability to respond to the competition
– As the decision making is very deliberative at Cambium, in the dynamic environment of Schools industry it has struggled to respond to the nimble upstart competition. Cambium has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Cambium 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 dependence on Cambium ‘s star products
– The top 2 products and services of Cambium still accounts for major business revenue. This dependence on star products in Schools industry has resulted into insufficient focus on developing new products, even though Cambium has relatively successful track record of launching new products.
High cash cycle compare to competitors
Cambium has a high cash cycle compare to other players in the Schools industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Cambium 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 Schools industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cambium is slow explore the new channels of communication. These new channels of communication can help Cambium to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
Cambium Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cambium are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cambium in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Schools industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cambium 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 Cambium to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Schools industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cambium in the Schools industry. Now Cambium can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Cambium can improve the customer journey of consumers in the Schools 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.
Creating value in data economy
– The success of analytics program of Cambium has opened avenues for new revenue streams for the organization in Schools industry. This can help Cambium to build a more holistic ecosystem for Cambium products in the Schools industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Cambium can use the latest technology developments to improve its manufacturing and designing process in Schools 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.
Better consumer reach
– The expansion of the 5G network will help Cambium to increase its market reach. Cambium 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Schools industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cambium 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. Cambium 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.
Using analytics as competitive advantage
– Cambium has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Schools sector. This continuous investment in analytics has enabled Cambium to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cambium to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Schools industry, but it has also influenced the consumer preferences. Cambium can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Cambium can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Cambium 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.
Leveraging digital technologies
– Cambium 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.
Threats Cambium External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cambium are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Schools industry are lowering. It can presents Cambium with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Schools sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cambium in Schools industry. The Schools 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.
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 Cambium in the Schools sector and impact the bottomline 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 Cambium business can come under increasing regulations regarding data privacy, data security, etc.
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 Cambium.
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. Cambium 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.
Easy access to finance
– Easy access to finance in Schools industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cambium can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Cambium 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 Schools industry.
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.
High dependence on third party suppliers
– Cambium 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 Cambium
– 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 Cambium.
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. Cambium needs to understand the core reasons impacting the Schools industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Cambium has witnessed rapid integration of technology during Covid-19 in the Schools industry. As one of the leading players in the industry, Cambium needs to keep up with the evolution of technology in the Schools 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.
Weighted SWOT Analysis of Cambium Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cambium 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 Cambium 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 Cambium 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 Cambium 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 Cambium needs to make to build a sustainable competitive advantage.