Based on various researches at Oak Spring University , Avianca Hldgs Adr Rep 8 Prf is operating in a macro-environment that has been destablized by – technology disruption, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing energy prices, increasing transportation and logistics costs,
geopolitical disruptions, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Avianca Hldgs Adr Rep 8 Prf
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Avianca Hldgs Adr Rep 8 Prf can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Avianca Hldgs Adr Rep 8 Prf, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf can be done for the following purposes –
1. Strategic planning of Avianca Hldgs Adr Rep 8 Prf
2. Improving business portfolio management of Avianca Hldgs Adr Rep 8 Prf
3. Assessing feasibility of the new initiative in United States
4. Making a Airline sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Avianca Hldgs Adr Rep 8 Prf
Strengths of Avianca Hldgs Adr Rep 8 Prf | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Avianca Hldgs Adr Rep 8 Prf are -
Digital Transformation in Airline industry
- digital transformation varies from industry to industry. For Avianca Hldgs Adr Rep 8 Prf digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Avianca Hldgs Adr Rep 8 Prf 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.
Successful track record of launching new products
– Avianca Hldgs Adr Rep 8 Prf has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Avianca Hldgs Adr Rep 8 Prf 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.
Low bargaining power of suppliers
– Suppliers of Avianca Hldgs Adr Rep 8 Prf in the Transportation sector have low bargaining power. Avianca Hldgs Adr Rep 8 Prf has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Avianca Hldgs Adr Rep 8 Prf to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Avianca Hldgs Adr Rep 8 Prf 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.
Cross disciplinary teams
– Horizontal connected teams at the Avianca Hldgs Adr Rep 8 Prf 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.
Highly skilled collaborators
– Avianca Hldgs Adr Rep 8 Prf has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Airline industry. Secondly the value chain collaborators of Avianca Hldgs Adr Rep 8 Prf have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Avianca Hldgs Adr Rep 8 Prf in Airline industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Airline industry
– Avianca Hldgs Adr Rep 8 Prf has clearly differentiated products in the market place. This has enabled Avianca Hldgs Adr Rep 8 Prf to fetch slight price premium compare to the competitors in the Airline industry. The sustainable margins have also helped Avianca Hldgs Adr Rep 8 Prf to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Avianca Hldgs Adr Rep 8 Prf is one of the leading players in the Airline 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.
Ability to lead change in Airline
– Avianca Hldgs Adr Rep 8 Prf is one of the leading players in the Airline industry in United States. Over the years it has not only transformed the business landscape in the Airline industry in United States but also across the existing markets. The ability to lead change has enabled Avianca Hldgs Adr Rep 8 Prf in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Avianca Hldgs Adr Rep 8 Prf comprises – understanding the underlying the factors in the Airline 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.
Organizational Resilience of Avianca Hldgs Adr Rep 8 Prf
– The covid-19 pandemic has put organizational resilience at the centre of everthing Avianca Hldgs Adr Rep 8 Prf does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Avianca Hldgs Adr Rep 8 Prf | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Avianca Hldgs Adr Rep 8 Prf are -
Workers concerns about automation
– As automation is fast increasing in the Airline industry, Avianca Hldgs Adr Rep 8 Prf 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.
Ability to respond to the competition
– As the decision making is very deliberative at Avianca Hldgs Adr Rep 8 Prf, in the dynamic environment of Airline industry it has struggled to respond to the nimble upstart competition. Avianca Hldgs Adr Rep 8 Prf has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Avianca Hldgs Adr Rep 8 Prf is one of the leading players in the Airline industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Airline industry in last five years.
Lack of clear differentiation of Avianca Hldgs Adr Rep 8 Prf products
– To increase the profitability and margins on the products, Avianca Hldgs Adr Rep 8 Prf needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Avianca Hldgs Adr Rep 8 Prf 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.
Interest costs
– Compare to the competition, Avianca Hldgs Adr Rep 8 Prf 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.
Employees’ less understanding of Avianca Hldgs Adr Rep 8 Prf strategy
– From the outside it seems that the employees of Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf has some of the most successful models in the Airline industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Avianca Hldgs Adr Rep 8 Prf should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Avianca Hldgs Adr Rep 8 Prf is slow explore the new channels of communication. These new channels of communication can help Avianca Hldgs Adr Rep 8 Prf to provide better information regarding Airline products and services. It can also build an online community to further reach out to potential customers.
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 Avianca Hldgs Adr Rep 8 Prf supply chain. Even after few cautionary changes, Avianca Hldgs Adr Rep 8 Prf is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Avianca Hldgs Adr Rep 8 Prf vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Avianca Hldgs Adr Rep 8 Prf has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Airline industry over the last five years. Avianca Hldgs Adr Rep 8 Prf 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.
Avianca Hldgs Adr Rep 8 Prf Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Avianca Hldgs Adr Rep 8 Prf are -
Use of Bitcoin and other crypto currencies for transactions in Airline industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Avianca Hldgs Adr Rep 8 Prf in the Airline industry. Now Avianca Hldgs Adr Rep 8 Prf can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Avianca Hldgs Adr Rep 8 Prf to increase its market reach. Avianca Hldgs Adr Rep 8 Prf 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Airline industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Avianca Hldgs Adr Rep 8 Prf 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. Avianca Hldgs Adr Rep 8 Prf 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Avianca Hldgs Adr Rep 8 Prf can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Avianca Hldgs Adr Rep 8 Prf 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Avianca Hldgs Adr Rep 8 Prf 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
– Avianca Hldgs Adr Rep 8 Prf 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.
Manufacturing automation
– Avianca Hldgs Adr Rep 8 Prf can use the latest technology developments to improve its manufacturing and designing process in Airline 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Avianca Hldgs Adr Rep 8 Prf can use these opportunities to build new business models that can help the communities that Avianca Hldgs Adr Rep 8 Prf operates in. Secondly it can use opportunities from government spending in Airline 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 Avianca Hldgs Adr Rep 8 Prf 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, Avianca Hldgs Adr Rep 8 Prf 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.
Buying journey improvements
– Avianca Hldgs Adr Rep 8 Prf can improve the customer journey of consumers in the Airline 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.
Threats Avianca Hldgs Adr Rep 8 Prf External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Avianca Hldgs Adr Rep 8 Prf are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Avianca Hldgs Adr Rep 8 Prf in Airline industry. The Airline 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.
Regulatory challenges
– Avianca Hldgs Adr Rep 8 Prf 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 Airline industry regulations.
High dependence on third party suppliers
– Avianca Hldgs Adr Rep 8 Prf 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.
Consumer confidence and its impact on Avianca Hldgs Adr Rep 8 Prf 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 Airline industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Avianca Hldgs Adr Rep 8 Prf may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Airline sector.
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 Avianca Hldgs Adr Rep 8 Prf business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Avianca Hldgs Adr Rep 8 Prf has witnessed rapid integration of technology during Covid-19 in the Airline industry. As one of the leading players in the industry, Avianca Hldgs Adr Rep 8 Prf needs to keep up with the evolution of technology in the Airline 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.
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 Avianca Hldgs Adr Rep 8 Prf in the Airline 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 Avianca Hldgs Adr Rep 8 Prf.
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.
Stagnating economy with rate increase
– Avianca Hldgs Adr Rep 8 Prf 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 Airline industry.
Shortening product life cycle
– it is one of the major threat that Avianca Hldgs Adr Rep 8 Prf is facing in Airline sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf prominent markets.
Weighted SWOT Analysis of Avianca Hldgs Adr Rep 8 Prf Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf needs to make to build a sustainable competitive advantage.