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 – there is backlash against globalization, increasing commodity prices, central banks are concerned over increasing inflation, technology disruption, increasing energy prices, increasing household debt because of falling income levels, wage bills are increasing, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , 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 -

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.

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.

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.

Ability to recruit top talent

– Max Retail FII is one of the leading players in the NA industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.

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.

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.

Cross disciplinary teams

– Horizontal connected teams at the Max Retail 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.

Learning organization

- Max Retail 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 Max Retail FII is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Max Retail FII emphasize – knowledge, initiative, and innovation.

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.

Effective Research and Development (R&D)

– Max Retail FII has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Max Retail 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.

High brand equity

– Max Retail FII has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Max Retail FII to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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 -

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Max Retail FII is slow explore the new channels of communication. These new channels of communication can help Max Retail FII to provide better information regarding NA products and services. It can also build an online community to further reach out to potential customers.

Products dominated business model

– Even though Max Retail 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. Max Retail FII should strive to include more intangible value offerings along with its core products and services.

Low market penetration in new markets

– Outside its home market of Brazil, Max Retail FII needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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.

Increasing silos among functional specialists

– The organizational structure of Max Retail FII is dominated by functional specialists. It is not different from other players in the NA industry, but Max Retail FII needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Max Retail FII to focus more on services in the NA industry rather than just following the product oriented approach.

Capital Spending Reduction

– Even during the low interest decade, Max Retail FII 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 NA industry using digital technology.

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.

Slow to strategic competitive environment developments

– As Max Retail FII is one of the leading players in the NA industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the NA industry in last five years.

Need for greater diversity

– Max Retail FII 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 Max Retail FII ‘s star products

– The top 2 products and services of Max Retail 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 Max Retail FII has relatively successful track record of launching new products.

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 -

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.

Loyalty marketing

– Max Retail 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.

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.

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 Max Retail 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Max Retail FII 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 Max Retail FII to hire the very best people irrespective of their geographical location.

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.

Creating value in data economy

– The success of analytics program of Max Retail FII has opened avenues for new revenue streams for the organization in NA industry. This can help Max Retail FII to build a more holistic ecosystem for Max Retail FII products in the NA industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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.

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.

Developing new processes and practices

– Max Retail FII can develop new processes and procedures in NA 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.

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.

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.

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.

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 -

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.

Easy access to finance

– Easy access to finance in NA industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Max Retail FII can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

Technology acceleration in Forth Industrial Revolution

– Max Retail FII has witnessed rapid integration of technology during Covid-19 in the NA industry. As one of the leading players in the industry, Max Retail 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.

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.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Max Retail 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 Max Retail 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 Max Retail FII in the NA sector and impact the bottomline of the organization.

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 Max Retail FII.

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.

Consumer confidence and its impact on Max Retail 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.

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.

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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