Max Retail FII (MAXR11) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Max Retail FII (Brazil)

Based on various researches at Oak Spring University , Max Retail FII is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc

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Introduction to SWOT Analysis of Max Retail FII

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Max Retail FII can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Max Retail FII, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Max Retail 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 Max Retail FII can be done for the following purposes –
1. Strategic planning of Max Retail FII
2. Improving business portfolio management of Max Retail 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 Max Retail FII

Strengths of Max Retail FII | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Max Retail FII are -

Low bargaining power of suppliers

– Suppliers of Max Retail FII in the NA sector have low bargaining power. Max Retail FII has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Max Retail FII to manage not only supply disruptions but also source products at highly competitive prices.

Superior customer experience

– The customer experience strategy of Max Retail FII in NA industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Training and development

– Max Retail FII has one of the best training and development program in NA 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.

Sustainable margins compare to other players in NA industry

– Max Retail FII has clearly differentiated products in the market place. This has enabled Max Retail FII to fetch slight price premium compare to the competitors in the NA industry. The sustainable margins have also helped Max Retail FII to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Max Retail FII has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Max Retail FII 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.

Strong track record of project management in the NA industry

– Max Retail 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

– Max Retail FII is one of the most innovative firm in NA sector.

Operational resilience

– The operational resilience strategy of Max Retail FII comprises – understanding the underlying the factors in the NA 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 NA industry

- digital transformation varies from industry to industry. For Max Retail FII digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Max Retail 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.

Diverse revenue streams

– Max Retail FII is present in almost all the verticals within the NA industry. This has provided Max Retail 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.

Organizational Resilience of Max Retail FII

– The covid-19 pandemic has put organizational resilience at the centre of everthing Max Retail FII does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Analytics focus

– Max Retail FII 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 NA industry. The technology infrastructure of Brazil 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.

Weaknesses of Max Retail FII | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Max Retail FII are -

No frontier risks strategy

– From the 10K / annual statement of Max Retail FII, it seems that company is thinking out the frontier risks that can impact NA 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.

Aligning sales with marketing

– From the outside it seems that Max Retail FII needs to have more collaboration between its sales team and marketing team. Sales professionals in the NA industry have deep experience in developing customer relationships. Marketing department at Max Retail FII can leverage the sales team experience to cultivate customer relationships as Max Retail FII is planning to shift buying processes online.

Lack of clear differentiation of Max Retail FII products

– To increase the profitability and margins on the products, Max Retail FII needs to provide more differentiated products than what it is currently offering in the marketplace.

High cash cycle compare to competitors

Max Retail FII has a high cash cycle compare to other players in the NA industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Ability to respond to the competition

– As the decision making is very deliberative at Max Retail FII, in the dynamic environment of NA industry it has struggled to respond to the nimble upstart competition. Max Retail FII has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, Max Retail 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 Max Retail FII lucrative customers.

High bargaining power of channel partners in NA industry

– because of the regulatory requirements in Brazil, Max Retail FII 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 NA industry.

Employees’ less understanding of Max Retail FII strategy

– From the outside it seems that the employees of Max Retail 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.

Slow decision making process

– As mentioned earlier in the report, Max Retail 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. Max Retail 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.

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 Max Retail FII supply chain. Even after few cautionary changes, Max Retail FII is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Max Retail FII vulnerable to further global disruptions in South East Asia.

Workers concerns about automation

– As automation is fast increasing in the NA industry, Max Retail 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.

Max Retail FII Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Max Retail FII are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Max Retail FII can use these opportunities to build new business models that can help the communities that Max Retail FII operates in. Secondly it can use opportunities from government spending in NA sector.

Building a culture of innovation

– managers at Max Retail 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.

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. Max Retail FII 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

– Max Retail FII can use the latest technology developments to improve its manufacturing and designing process in NA 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.

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. Max Retail 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. Max Retail 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.

Better consumer reach

– The expansion of the 5G network will help Max Retail FII to increase its market reach. Max Retail 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.

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. Max Retail FII can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Max Retail FII can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Max Retail FII 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Max Retail 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 Max Retail 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.

Use of Bitcoin and other crypto currencies for transactions in NA industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Max Retail FII in the NA industry. Now Max Retail FII can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Max Retail FII is facing challenges because of the dominance of functional experts in the organization. Max Retail 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Max Retail 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.

Threats Max Retail FII External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Max Retail FII are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Max Retail 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.

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 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.

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. Max Retail FII 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.

Regulatory challenges

– Max Retail FII 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 NA industry regulations.

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 Max Retail FII in the NA sector and impact the bottomline of the organization.

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. Max Retail FII needs to understand the core reasons impacting the NA industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Max Retail FII 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 NA industry.

Environmental challenges

– Max Retail FII 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. Max Retail FII can take advantage of this fund but it will also bring new competitors in the NA industry.

Shortening product life cycle

– it is one of the major threat that Max Retail FII is facing in NA sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Max Retail 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to NA industry are lowering. It can presents Max Retail FII with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the NA sector.

Increasing wage structure of Max Retail 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 Max Retail FII.

Weighted SWOT Analysis of Max Retail FII Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Max Retail 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 Max Retail 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 Max Retail 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 Max Retail 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 Max Retail FII needs to make to build a sustainable competitive advantage.

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