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, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, 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 -
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.
Strong track record of project management in the Airline industry
– Avianca Hldgs Adr Rep 8 Prf is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Avianca Hldgs Adr Rep 8 Prf 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 Airline industry using digital technology.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Developing new processes and practices
– Avianca Hldgs Adr Rep 8 Prf can develop new processes and procedures in Airline 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Avianca Hldgs Adr Rep 8 Prf in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Airline industry, and it will provide faster access to the consumers.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Environmental challenges
– Avianca Hldgs Adr Rep 8 Prf 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. Avianca Hldgs Adr Rep 8 Prf can take advantage of this fund but it will also bring new competitors in the Airline industry.
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.
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.
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.
Easy access to finance
– Easy access to finance in Airline industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Avianca Hldgs Adr Rep 8 Prf can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
