SWOT Analysis / TOWS Matrix for AH Belo (United States)
Based on various researches at Oak Spring University , AH Belo is operating in a macro-environment that has been destablized by – wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that AH Belo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the AH Belo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which AH Belo 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 AH Belo can be done for the following purposes –
1. Strategic planning of AH Belo
2. Improving business portfolio management of AH Belo
3. Assessing feasibility of the new initiative in United States
4. Making a Printing & Publishing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of AH Belo
Strengths of AH Belo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of AH Belo are -
High brand equity
– AH Belo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled AH Belo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Printing & Publishing industry
– AH Belo has clearly differentiated products in the market place. This has enabled AH Belo to fetch slight price premium compare to the competitors in the Printing & Publishing industry. The sustainable margins have also helped AH Belo to invest into research and development (R&D) and innovation.
Strong track record of project management in the Printing & Publishing industry
– AH Belo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that AH Belo 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.
Ability to lead change in Printing & Publishing
– AH Belo is one of the leading players in the Printing & Publishing industry in United States. Over the years it has not only transformed the business landscape in the Printing & Publishing industry in United States but also across the existing markets. The ability to lead change has enabled AH Belo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– AH Belo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – AH Belo staying ahead in the Printing & Publishing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Printing & Publishing industry
- digital transformation varies from industry to industry. For AH Belo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. AH Belo 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.
Low bargaining power of suppliers
– Suppliers of AH Belo in the Services sector have low bargaining power. AH Belo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps AH Belo to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- AH Belo 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 AH Belo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at AH Belo emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– AH Belo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Printing & Publishing industry. Secondly the value chain collaborators of AH Belo have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of AH Belo in Printing & Publishing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of AH Belo
– The covid-19 pandemic has put organizational resilience at the centre of everthing AH Belo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of AH Belo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AH Belo are -
Capital Spending Reduction
– Even during the low interest decade, AH Belo 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 Printing & Publishing industry using digital technology.
Need for greater diversity
– AH Belo 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.
No frontier risks strategy
– From the 10K / annual statement of AH Belo, it seems that company is thinking out the frontier risks that can impact Printing & Publishing 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.
Employees’ less understanding of AH Belo strategy
– From the outside it seems that the employees of AH Belo 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.
Workers concerns about automation
– As automation is fast increasing in the Printing & Publishing industry, AH Belo 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.
Compensation and incentives
– The revenue per employee of AH Belo is just above the Printing & Publishing 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 AH Belo is dominated by functional specialists. It is not different from other players in the Printing & Publishing industry, but AH Belo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help AH Belo to focus more on services in the Printing & Publishing industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, AH Belo has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Printing & Publishing industry over the last five years. AH Belo 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.
Lack of clear differentiation of AH Belo products
– To increase the profitability and margins on the products, AH Belo needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of United States, AH Belo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, AH Belo 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.
AH Belo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of AH Belo are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for AH Belo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Printing & Publishing industry, and it will provide faster access to the consumers.
Developing new processes and practices
– AH Belo can develop new processes and procedures in Printing & Publishing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for AH Belo 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 AH Belo to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Printing & Publishing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. AH Belo 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. AH Belo 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.
Learning at scale
– Online learning technologies has now opened space for AH Belo 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects AH Belo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Printing & Publishing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for AH Belo in the Printing & Publishing industry. Now AH Belo can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help AH Belo to increase its market reach. AH Belo 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.
Loyalty marketing
– AH Belo 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, AH Belo 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Printing & Publishing industry, but it has also influenced the consumer preferences. AH Belo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– AH Belo can use the latest technology developments to improve its manufacturing and designing process in Printing & Publishing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, AH Belo is facing challenges because of the dominance of functional experts in the organization. AH Belo can utilize new technology in the field of Printing & Publishing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats AH Belo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of AH Belo are -
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.
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 AH Belo in the Printing & Publishing sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Printing & Publishing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. AH Belo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– AH Belo has witnessed rapid integration of technology during Covid-19 in the Printing & Publishing industry. As one of the leading players in the industry, AH Belo needs to keep up with the evolution of technology in the Printing & Publishing 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, AH Belo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing & Publishing sector.
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 AH Belo.
Stagnating economy with rate increase
– AH Belo 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 Printing & Publishing industry.
High dependence on third party suppliers
– AH Belo 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.
Shortening product life cycle
– it is one of the major threat that AH Belo is facing in Printing & Publishing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– AH Belo 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 Printing & Publishing industry regulations.
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. AH Belo 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.
Environmental challenges
– AH Belo 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. AH Belo can take advantage of this fund but it will also bring new competitors in the Printing & Publishing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Printing & Publishing industry are lowering. It can presents AH Belo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing & Publishing sector.
Weighted SWOT Analysis of AH Belo Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at AH Belo 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 AH Belo 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 AH Belo 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 AH Belo 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 AH Belo needs to make to build a sustainable competitive advantage.