SWOT Analysis / TOWS Matrix for Floripa Shopping FII (Brazil)
Based on various researches at Oak Spring University , Floripa Shopping FII is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Floripa Shopping FII
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Floripa Shopping FII can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Floripa Shopping FII, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Floripa Shopping FII 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 Floripa Shopping FII can be done for the following purposes –
1. Strategic planning of Floripa Shopping FII
2. Improving business portfolio management of Floripa Shopping FII
3. Assessing feasibility of the new initiative in Brazil
4. Making a NA sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Floripa Shopping FII
Strengths of Floripa Shopping FII | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Floripa Shopping FII are -
Highly skilled collaborators
– Floripa Shopping FII has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive NA industry. Secondly the value chain collaborators of Floripa Shopping FII have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the NA industry
– Floripa Shopping FII is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Floripa Shopping FII is one of the most innovative firm in NA sector.
High brand equity
– Floripa Shopping FII has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Floripa Shopping FII to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Floripa Shopping FII 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 Floripa Shopping FII in the NA sector have low bargaining power. Floripa Shopping FII has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Floripa Shopping FII to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Floripa Shopping FII 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 Floripa Shopping FII is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Floripa Shopping FII emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Floripa Shopping FII in NA industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Floripa Shopping FII 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.
Digital Transformation in NA industry
- digital transformation varies from industry to industry. For Floripa Shopping FII digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Floripa Shopping FII 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.
Effective Research and Development (R&D)
– Floripa Shopping FII has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Floripa Shopping FII staying ahead in the NA industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Floripa Shopping FII is present in almost all the verticals within the NA industry. This has provided Floripa Shopping FII 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.
Weaknesses of Floripa Shopping FII | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Floripa Shopping FII are -
High dependence on Floripa Shopping FII ‘s star products
– The top 2 products and services of Floripa Shopping FII still accounts for major business revenue. This dependence on star products in NA industry has resulted into insufficient focus on developing new products, even though Floripa Shopping FII has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the NA industry, Floripa Shopping FII 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.
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 Floripa Shopping FII supply chain. Even after few cautionary changes, Floripa Shopping FII is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Floripa Shopping FII vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Floripa Shopping FII strategy
– From the outside it seems that the employees of Floripa Shopping FII 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.
Products dominated business model
– Even though Floripa Shopping FII has some of the most successful models in the NA industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Floripa Shopping FII should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Floripa Shopping FII products
– To increase the profitability and margins on the products, Floripa Shopping FII needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Floripa Shopping FII has high operating costs in the NA industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Floripa Shopping FII lucrative customers.
Low market penetration in new markets
– Outside its home market of Brazil, Floripa Shopping FII needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Floripa Shopping FII is dominated by functional specialists. It is not different from other players in the NA industry, but Floripa Shopping FII needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Floripa Shopping FII to focus more on services in the NA industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Floripa Shopping FII 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.
Slow decision making process
– As mentioned earlier in the report, Floripa Shopping FII has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the NA industry over the last five years. Floripa Shopping FII 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.
Floripa Shopping FII Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Floripa Shopping FII are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the NA industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Floripa Shopping FII 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. Floripa Shopping FII 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Floripa Shopping FII can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in NA industry, but it has also influenced the consumer preferences. Floripa Shopping FII can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Floripa Shopping FII is facing challenges because of the dominance of functional experts in the organization. Floripa Shopping FII can utilize new technology in the field of NA industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Floripa Shopping FII to increase its market reach. Floripa Shopping FII 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.
Buying journey improvements
– Floripa Shopping FII can improve the customer journey of consumers in the NA 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Floripa Shopping FII can use these opportunities to build new business models that can help the communities that Floripa Shopping FII operates in. Secondly it can use opportunities from government spending in NA sector.
Creating value in data economy
– The success of analytics program of Floripa Shopping FII has opened avenues for new revenue streams for the organization in NA industry. This can help Floripa Shopping FII to build a more holistic ecosystem for Floripa Shopping FII products in the NA industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Floripa Shopping FII 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.
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 Floripa Shopping FII 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Floripa Shopping FII 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.
Building a culture of innovation
– managers at Floripa Shopping FII 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 NA industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Floripa Shopping FII 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 Floripa Shopping FII 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 Floripa Shopping FII External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Floripa Shopping FII are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Floripa Shopping FII in NA industry. The NA 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 dependence on third party suppliers
– Floripa Shopping FII 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Floripa Shopping FII may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of NA sector.
Technology acceleration in Forth Industrial Revolution
– Floripa Shopping FII has witnessed rapid integration of technology during Covid-19 in the NA industry. As one of the leading players in the industry, Floripa Shopping FII needs to keep up with the evolution of technology in the NA 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.
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.
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, Floripa Shopping FII 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 Floripa Shopping FII prominent markets.
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 Floripa Shopping FII in the NA sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Floripa Shopping FII is facing in NA sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Floripa Shopping FII
– 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 Floripa Shopping FII.
Consumer confidence and its impact on Floripa Shopping FII 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 NA industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to NA industry are lowering. It can presents Floripa Shopping FII with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the NA 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 Floripa Shopping FII.
Weighted SWOT Analysis of Floripa Shopping FII Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Floripa Shopping FII 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 Floripa Shopping FII 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 Floripa Shopping FII 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 Floripa Shopping FII 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 Floripa Shopping FII needs to make to build a sustainable competitive advantage.