Amadeus IT Holding SA PK (AMADY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Amadeus IT Holding SA PK (United States)
Based on various researches at Oak Spring University , Amadeus IT Holding SA PK is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing energy prices, increasing household debt because of falling income levels, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Amadeus IT Holding SA PK
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Amadeus IT Holding SA PK can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amadeus IT Holding SA PK, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK can be done for the following purposes –
1. Strategic planning of Amadeus IT Holding SA PK
2. Improving business portfolio management of Amadeus IT Holding SA PK
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 Amadeus IT Holding SA PK
Strengths of Amadeus IT Holding SA PK | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amadeus IT Holding SA PK are -
Strong track record of project management in the industry
– Amadeus IT Holding SA PK 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
– Amadeus IT Holding SA PK is one of the most innovative firm in sector.
Organizational Resilience of Amadeus IT Holding SA PK
– The covid-19 pandemic has put organizational resilience at the centre of everthing Amadeus IT Holding SA PK does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in industry
– Amadeus IT Holding SA PK has clearly differentiated products in the market place. This has enabled Amadeus IT Holding SA PK to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Amadeus IT Holding SA PK to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Amadeus IT Holding SA PK is one of the leading players in the industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Amadeus IT Holding SA PK emphasize – knowledge, initiative, and innovation.
High brand equity
– Amadeus IT Holding SA PK has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Amadeus IT Holding SA PK to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Amadeus IT Holding SA PK 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 industry
- digital transformation varies from industry to industry. For Amadeus IT Holding SA PK digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amadeus IT Holding SA PK 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.
Highly skilled collaborators
– Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Amadeus IT Holding SA PK 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.
Successful track record of launching new products
– Amadeus IT Holding SA PK has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amadeus IT Holding SA PK 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.
Weaknesses of Amadeus IT Holding SA PK | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amadeus IT Holding SA PK are -
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Amadeus IT Holding SA PK 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.
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 Amadeus IT Holding SA PK supply chain. Even after few cautionary changes, Amadeus IT Holding SA PK is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amadeus IT Holding SA PK vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of United States, Amadeus IT Holding SA PK needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Amadeus IT Holding SA PK has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Amadeus IT Holding SA PK ‘s star products
– The top 2 products and services of Amadeus IT Holding SA PK still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Amadeus IT Holding SA PK has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Amadeus IT Holding SA PK, it seems that company is thinking out the frontier risks that can impact 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.
Products dominated business model
– Even though Amadeus IT Holding SA PK 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. Amadeus IT Holding SA PK should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Amadeus IT Holding SA PK is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Amadeus IT Holding SA PK, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Amadeus IT Holding SA PK has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Amadeus IT Holding SA PK strategy
– From the outside it seems that the employees of Amadeus IT Holding SA PK 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.
Aligning sales with marketing
– From the outside it seems that Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK can leverage the sales team experience to cultivate customer relationships as Amadeus IT Holding SA PK is planning to shift buying processes online.
Amadeus IT Holding SA PK Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Amadeus IT Holding SA PK are -
Leveraging digital technologies
– Amadeus IT Holding SA PK can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amadeus IT Holding SA PK in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Amadeus IT Holding SA PK can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Amadeus IT Holding SA PK can improve the customer journey of consumers in the 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.
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 Amadeus IT Holding SA PK in the industry. Now Amadeus IT Holding SA PK can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amadeus IT Holding SA PK can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Amadeus IT Holding SA PK 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.
Developing new processes and practices
– Amadeus IT Holding SA PK 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amadeus IT Holding SA PK 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.
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. Amadeus IT Holding SA PK 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. Amadeus IT Holding SA PK 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.
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 Amadeus IT Holding SA PK 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amadeus IT Holding SA PK can use these opportunities to build new business models that can help the communities that Amadeus IT Holding SA PK operates in. Secondly it can use opportunities from government spending in sector.
Threats Amadeus IT Holding SA PK External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Amadeus IT Holding SA PK are -
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 Amadeus IT Holding SA PK in the sector and impact the bottomline of the organization.
Regulatory challenges
– Amadeus IT Holding SA PK 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 industry regulations.
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 Amadeus IT Holding SA PK business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK prominent markets.
Technology acceleration in Forth Industrial Revolution
– Amadeus IT Holding SA PK has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Amadeus IT Holding SA PK 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Amadeus IT Holding SA PK in industry. The 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Amadeus IT Holding SA PK may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of 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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Amadeus IT Holding SA PK can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Amadeus IT Holding SA PK needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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. Amadeus IT Holding SA PK 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.
Consumer confidence and its impact on Amadeus IT Holding SA PK 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.
Stagnating economy with rate increase
– Amadeus IT Holding SA PK 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.
Weighted SWOT Analysis of Amadeus IT Holding SA PK Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK 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 Amadeus IT Holding SA PK needs to make to build a sustainable competitive advantage.