SWOT Analysis / TOWS Matrix for Cool Holdings (United States)
Based on various researches at Oak Spring University , Cool Holdings is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cool Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cool Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cool Holdings 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 Cool Holdings can be done for the following purposes –
1. Strategic planning of Cool Holdings
2. Improving business portfolio management of Cool Holdings
3. Assessing feasibility of the new initiative in United States
4. Making a Retail (Technology) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cool Holdings
Strengths of Cool Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cool Holdings are -
Diverse revenue streams
– Cool Holdings is present in almost all the verticals within the Retail (Technology) industry. This has provided Cool Holdings a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Cool Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cool Holdings 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.
High switching costs
– The high switching costs that Cool Holdings 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.
Operational resilience
– The operational resilience strategy of Cool Holdings comprises – understanding the underlying the factors in the Retail (Technology) 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.
Highly skilled collaborators
– Cool Holdings has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Technology) industry. Secondly the value chain collaborators of Cool Holdings have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Cool Holdings has one of the best training and development program in Services 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.
Cross disciplinary teams
– Horizontal connected teams at the Cool Holdings 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.
Sustainable margins compare to other players in Retail (Technology) industry
– Cool Holdings has clearly differentiated products in the market place. This has enabled Cool Holdings to fetch slight price premium compare to the competitors in the Retail (Technology) industry. The sustainable margins have also helped Cool Holdings to invest into research and development (R&D) and innovation.
Ability to lead change in Retail (Technology)
– Cool Holdings is one of the leading players in the Retail (Technology) industry in United States. Over the years it has not only transformed the business landscape in the Retail (Technology) industry in United States but also across the existing markets. The ability to lead change has enabled Cool Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Cool Holdings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cool Holdings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Cool Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing Cool Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Cool Holdings is one of the leading players in the Retail (Technology) 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.
Weaknesses of Cool Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cool Holdings are -
Aligning sales with marketing
– From the outside it seems that Cool Holdings needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Technology) industry have deep experience in developing customer relationships. Marketing department at Cool Holdings can leverage the sales team experience to cultivate customer relationships as Cool Holdings is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Cool Holdings 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 Retail (Technology) industry using digital technology.
Slow to strategic competitive environment developments
– As Cool Holdings is one of the leading players in the Retail (Technology) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Technology) industry in last five years.
Need for greater diversity
– Cool Holdings 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cool Holdings is slow explore the new channels of communication. These new channels of communication can help Cool Holdings to provide better information regarding Retail (Technology) products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Cool Holdings products
– To increase the profitability and margins on the products, Cool Holdings needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Cool Holdings has some of the most successful models in the Retail (Technology) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Cool Holdings should strive to include more intangible value offerings along with its core products and services.
High dependence on Cool Holdings ‘s star products
– The top 2 products and services of Cool Holdings still accounts for major business revenue. This dependence on star products in Retail (Technology) industry has resulted into insufficient focus on developing new products, even though Cool Holdings has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Cool Holdings is just above the Retail (Technology) industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Cool Holdings has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Technology) industry over the last five years. Cool Holdings 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.
Ability to respond to the competition
– As the decision making is very deliberative at Cool Holdings, in the dynamic environment of Retail (Technology) industry it has struggled to respond to the nimble upstart competition. Cool Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Cool Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Cool Holdings are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cool Holdings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Technology) industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cool Holdings can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cool Holdings 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 Cool Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Cool Holdings 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.
Using analytics as competitive advantage
– Cool Holdings has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Technology) sector. This continuous investment in analytics has enabled Cool Holdings to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cool Holdings 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, Cool Holdings is facing challenges because of the dominance of functional experts in the organization. Cool Holdings can utilize new technology in the field of Retail (Technology) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Cool Holdings can develop new processes and procedures in Retail (Technology) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cool Holdings 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 Cool Holdings to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cool Holdings can use these opportunities to build new business models that can help the communities that Cool Holdings operates in. Secondly it can use opportunities from government spending in Retail (Technology) sector.
Learning at scale
– Online learning technologies has now opened space for Cool Holdings 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.
Better consumer reach
– The expansion of the 5G network will help Cool Holdings to increase its market reach. Cool Holdings 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cool Holdings 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
– Cool Holdings can improve the customer journey of consumers in the Retail (Technology) 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 Cool Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Cool Holdings are -
Environmental challenges
– Cool Holdings 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. Cool Holdings can take advantage of this fund but it will also bring new competitors in the Retail (Technology) industry.
Regulatory challenges
– Cool Holdings 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 Retail (Technology) industry regulations.
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 Cool Holdings in the Retail (Technology) sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Cool Holdings 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.
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. Cool Holdings needs to understand the core reasons impacting the Retail (Technology) 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. Cool Holdings 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Technology) industry are lowering. It can presents Cool Holdings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Technology) sector.
Stagnating economy with rate increase
– Cool Holdings 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 Retail (Technology) industry.
Consumer confidence and its impact on Cool Holdings 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 Retail (Technology) industry and other sectors.
Easy access to finance
– Easy access to finance in Retail (Technology) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cool Holdings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Cool Holdings
– 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 Cool Holdings.
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 Cool Holdings business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Cool Holdings has witnessed rapid integration of technology during Covid-19 in the Retail (Technology) industry. As one of the leading players in the industry, Cool Holdings needs to keep up with the evolution of technology in the Retail (Technology) 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.
Weighted SWOT Analysis of Cool Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cool Holdings 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 Cool Holdings 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 Cool Holdings 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 Cool Holdings 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 Cool Holdings needs to make to build a sustainable competitive advantage.