Based on various researches at Oak Spring University , Artificial Intelligence Tech is operating in a macro-environment that has been destablized by – wage bills are increasing, there is increasing trade war between United States & China, increasing household debt because of falling income levels, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, technology disruption,
cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Artificial Intelligence Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Artificial Intelligence Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Artificial Intelligence Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Artificial Intelligence Tech 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 Artificial Intelligence Tech can be done for the following purposes –
1. Strategic planning of Artificial Intelligence Tech
2. Improving business portfolio management of Artificial Intelligence Tech
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Artificial Intelligence Tech
Strengths of Artificial Intelligence Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Artificial Intelligence Tech are -
Ability to lead change in
– Artificial Intelligence Tech is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Artificial Intelligence Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Artificial Intelligence Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Artificial Intelligence Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Artificial Intelligence Tech has one of the best training and development program in 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Artificial Intelligence Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Artificial Intelligence Tech 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.
Cross disciplinary teams
– Horizontal connected teams at the Artificial Intelligence Tech 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.
Learning organization
- Artificial Intelligence Tech 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 Artificial Intelligence Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Artificial Intelligence Tech emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Artificial Intelligence Tech has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Artificial Intelligence Tech staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Artificial Intelligence Tech
– The covid-19 pandemic has put organizational resilience at the centre of everthing Artificial Intelligence Tech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Artificial Intelligence Tech comprises – understanding the underlying the factors in the 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.
Sustainable margins compare to other players in industry
– Artificial Intelligence Tech has clearly differentiated products in the market place. This has enabled Artificial Intelligence Tech to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Artificial Intelligence Tech to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Artificial Intelligence Tech is present in almost all the verticals within the industry. This has provided Artificial Intelligence Tech 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
– Artificial Intelligence Tech is one of the most innovative firm in sector.
Weaknesses of Artificial Intelligence Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Artificial Intelligence Tech are -
Ability to respond to the competition
– As the decision making is very deliberative at Artificial Intelligence Tech, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Artificial Intelligence Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Artificial Intelligence Tech supply chain. Even after few cautionary changes, Artificial Intelligence Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Artificial Intelligence Tech vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Artificial Intelligence Tech has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Artificial Intelligence Tech lucrative customers.
Need for greater diversity
– Artificial Intelligence Tech 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Artificial Intelligence Tech is slow explore the new channels of communication. These new channels of communication can help Artificial Intelligence Tech to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Artificial Intelligence Tech 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.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Artificial Intelligence Tech 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 industry.
Products dominated business model
– Even though Artificial Intelligence Tech has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Artificial Intelligence Tech should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Artificial Intelligence Tech needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Artificial Intelligence Tech can leverage the sales team experience to cultivate customer relationships as Artificial Intelligence Tech is planning to shift buying processes online.
Lack of clear differentiation of Artificial Intelligence Tech products
– To increase the profitability and margins on the products, Artificial Intelligence Tech needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in industry
– The stress on hiring functional specialists at Artificial Intelligence Tech 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.
Artificial Intelligence Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Artificial Intelligence Tech are -
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Artificial Intelligence Tech in the industry. Now Artificial Intelligence Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Artificial Intelligence Tech 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Artificial Intelligence Tech 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
– Artificial Intelligence Tech can develop new processes and procedures in 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.
Using analytics as competitive advantage
– Artificial Intelligence Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Artificial Intelligence Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Artificial Intelligence Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Artificial Intelligence Tech can use these opportunities to build new business models that can help the communities that Artificial Intelligence Tech operates in. Secondly it can use opportunities from government spending in sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Artificial Intelligence Tech is facing challenges because of the dominance of functional experts in the organization. Artificial Intelligence Tech can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Artificial Intelligence Tech 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.
Creating value in data economy
– The success of analytics program of Artificial Intelligence Tech has opened avenues for new revenue streams for the organization in industry. This can help Artificial Intelligence Tech to build a more holistic ecosystem for Artificial Intelligence Tech products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Artificial Intelligence Tech 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 industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Artificial Intelligence Tech 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 industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Artificial Intelligence Tech 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. Artificial Intelligence Tech 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Artificial Intelligence Tech 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 Artificial Intelligence Tech to hire the very best people irrespective of their geographical location.
Threats Artificial Intelligence Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Artificial Intelligence Tech are -
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. Artificial Intelligence Tech needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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 Artificial Intelligence Tech in the sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Artificial Intelligence Tech 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 Artificial Intelligence Tech prominent markets.
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.
Technology acceleration in Forth Industrial Revolution
– Artificial Intelligence Tech has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Artificial Intelligence Tech needs to keep up with the evolution of technology in the 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.
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. Artificial Intelligence Tech 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Artificial Intelligence Tech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Artificial Intelligence Tech is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Artificial Intelligence Tech 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 industry.
Increasing wage structure of Artificial Intelligence Tech
– 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 Artificial Intelligence Tech.
Consumer confidence and its impact on Artificial Intelligence Tech demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in industry and other sectors.
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 Artificial Intelligence Tech business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Artificial Intelligence Tech 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.
Weighted SWOT Analysis of Artificial Intelligence Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Artificial Intelligence Tech 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 Artificial Intelligence Tech 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 Artificial Intelligence Tech 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 Artificial Intelligence Tech 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 Artificial Intelligence Tech needs to make to build a sustainable competitive advantage.