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 – wage bills are increasing, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, technology disruption, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
Training and development
– Avianca Hldgs Adr Rep 8 Prf has one of the best training and development program in Transportation 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.
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.
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.
High brand equity
– Avianca Hldgs Adr Rep 8 Prf has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Avianca Hldgs Adr Rep 8 Prf to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
Diverse revenue streams
– Avianca Hldgs Adr Rep 8 Prf is present in almost all the verticals within the Airline industry. This has provided Avianca Hldgs Adr Rep 8 Prf 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.
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.
Learning organization
- Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Avianca Hldgs Adr Rep 8 Prf emphasize – knowledge, initiative, and innovation.
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.
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 -
Low market penetration in new markets
– Outside its home market of United States, Avianca Hldgs Adr Rep 8 Prf needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
High bargaining power of channel partners in Airline industry
– because of the regulatory requirements in United States, Avianca Hldgs Adr Rep 8 Prf 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 Airline industry.
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.
No frontier risks strategy
– From the 10K / annual statement of Avianca Hldgs Adr Rep 8 Prf, it seems that company is thinking out the frontier risks that can impact Airline 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.
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.
High operating costs
– Compare to the competitors, Avianca Hldgs Adr Rep 8 Prf has high operating costs in the Airline industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Avianca Hldgs Adr Rep 8 Prf lucrative customers.
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.
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.
Skills based hiring in Airline industry
– The stress on hiring functional specialists at Avianca Hldgs Adr Rep 8 Prf has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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 -
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.
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.
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.
Using analytics as competitive advantage
– Avianca Hldgs Adr Rep 8 Prf has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Airline sector. This continuous investment in analytics has enabled Avianca Hldgs Adr Rep 8 Prf to build a competitive advantage using analytics. The analytics driven competitive advantage can help Avianca Hldgs Adr Rep 8 Prf to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Avianca Hldgs Adr Rep 8 Prf is facing challenges because of the dominance of functional experts in the organization. Avianca Hldgs Adr Rep 8 Prf can utilize new technology in the field of Airline industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Avianca Hldgs Adr Rep 8 Prf has opened avenues for new revenue streams for the organization in Airline industry. This can help Avianca Hldgs Adr Rep 8 Prf to build a more holistic ecosystem for Avianca Hldgs Adr Rep 8 Prf products in the Airline industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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.
Learning at scale
– Online learning technologies has now opened space for Avianca Hldgs Adr Rep 8 Prf 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.
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.
Building a culture of innovation
– managers at Avianca Hldgs Adr Rep 8 Prf 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 Airline industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Avianca Hldgs Adr Rep 8 Prf 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 Avianca Hldgs Adr Rep 8 Prf to hire the very best people irrespective of their geographical location.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Airline industry are lowering. It can presents Avianca Hldgs Adr Rep 8 Prf with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Airline sector.
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.
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.
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. Avianca Hldgs Adr Rep 8 Prf 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.
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.
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.
Increasing wage structure of Avianca Hldgs Adr Rep 8 Prf
– 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 Avianca Hldgs Adr Rep 8 Prf.
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.