Bright Horizons Family Solutions Inc (BFAM) SWOT Analysis / TOWS Matrix / MBA Resources
Personal Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Bright Horizons Family Solutions Inc (United States)
Based on various researches at Oak Spring University , Bright Horizons Family Solutions Inc is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, technology disruption, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, geopolitical disruptions, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Bright Horizons Family Solutions Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bright Horizons Family Solutions Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bright Horizons Family Solutions Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc can be done for the following purposes –
1. Strategic planning of Bright Horizons Family Solutions Inc
2. Improving business portfolio management of Bright Horizons Family Solutions Inc
3. Assessing feasibility of the new initiative in United States
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bright Horizons Family Solutions Inc
Strengths of Bright Horizons Family Solutions Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bright Horizons Family Solutions Inc are -
Cross disciplinary teams
– Horizontal connected teams at the Bright Horizons Family Solutions Inc 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.
Learning organization
- Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Bright Horizons Family Solutions Inc emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Bright Horizons Family Solutions Inc in the Services sector have low bargaining power. Bright Horizons Family Solutions Inc has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bright Horizons Family Solutions Inc to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Personal Services industry
– Bright Horizons Family Solutions Inc has clearly differentiated products in the market place. This has enabled Bright Horizons Family Solutions Inc to fetch slight price premium compare to the competitors in the Personal Services industry. The sustainable margins have also helped Bright Horizons Family Solutions Inc to invest into research and development (R&D) and innovation.
Strong track record of project management in the Personal Services industry
– Bright Horizons Family Solutions Inc is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Bright Horizons Family Solutions Inc in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Bright Horizons Family Solutions Inc 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.
Highly skilled collaborators
– Bright Horizons Family Solutions Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of Bright Horizons Family Solutions Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Personal Services industry
- digital transformation varies from industry to industry. For Bright Horizons Family Solutions Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bright Horizons Family Solutions Inc 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
– Bright Horizons Family Solutions Inc is present in almost all the verticals within the Personal Services industry. This has provided Bright Horizons Family Solutions Inc 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.
Innovation driven organization
– Bright Horizons Family Solutions Inc is one of the most innovative firm in Personal Services sector.
High brand equity
– Bright Horizons Family Solutions Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bright Horizons Family Solutions Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Bright Horizons Family Solutions Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bright Horizons Family Solutions Inc are -
High dependence on Bright Horizons Family Solutions Inc ‘s star products
– The top 2 products and services of Bright Horizons Family Solutions Inc still accounts for major business revenue. This dependence on star products in Personal Services industry has resulted into insufficient focus on developing new products, even though Bright Horizons Family Solutions Inc has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bright Horizons Family Solutions Inc is slow explore the new channels of communication. These new channels of communication can help Bright Horizons Family Solutions Inc to provide better information regarding Personal Services products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Personal Services industry, Bright Horizons Family Solutions Inc 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.
Need for greater diversity
– Bright Horizons Family Solutions Inc 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.
Skills based hiring in Personal Services industry
– The stress on hiring functional specialists at Bright Horizons Family Solutions Inc 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.
Low market penetration in new markets
– Outside its home market of United States, Bright Horizons Family Solutions Inc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Bright Horizons Family Solutions Inc has high operating costs in the Personal Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bright Horizons Family Solutions Inc lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Bright Horizons Family Solutions Inc has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal Services industry over the last five years. Bright Horizons Family Solutions Inc 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.
Interest costs
– Compare to the competition, Bright Horizons Family Solutions Inc 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 cash cycle compare to competitors
Bright Horizons Family Solutions Inc has a high cash cycle compare to other players in the Personal Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Bright Horizons Family Solutions Inc has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Bright Horizons Family Solutions Inc should strive to include more intangible value offerings along with its core products and services.
Bright Horizons Family Solutions Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Bright Horizons Family Solutions Inc are -
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 Bright Horizons Family Solutions Inc 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal Services industry, but it has also influenced the consumer preferences. Bright Horizons Family Solutions Inc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bright Horizons Family Solutions Inc in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal Services industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Bright Horizons Family Solutions Inc has opened avenues for new revenue streams for the organization in Personal Services industry. This can help Bright Horizons Family Solutions Inc to build a more holistic ecosystem for Bright Horizons Family Solutions Inc products in the Personal Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bright Horizons Family Solutions Inc can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Bright Horizons Family Solutions Inc has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal Services sector. This continuous investment in analytics has enabled Bright Horizons Family Solutions Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bright Horizons Family Solutions Inc to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc to increase its market reach. Bright Horizons Family Solutions Inc 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.
Building a culture of innovation
– managers at Bright Horizons Family Solutions Inc 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 Personal Services industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc 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. Bright Horizons Family Solutions Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bright Horizons Family Solutions Inc is facing challenges because of the dominance of functional experts in the organization. Bright Horizons Family Solutions Inc can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bright Horizons Family Solutions Inc 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.
Threats Bright Horizons Family Solutions Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Bright Horizons Family Solutions Inc are -
High dependence on third party suppliers
– Bright Horizons Family Solutions Inc 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.
Shortening product life cycle
– it is one of the major threat that Bright Horizons Family Solutions Inc is facing in Personal Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal Services industry are lowering. It can presents Bright Horizons Family Solutions Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal Services sector.
Regulatory challenges
– Bright Horizons Family Solutions Inc 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 Personal Services industry regulations.
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. Bright Horizons Family Solutions Inc needs to understand the core reasons impacting the Personal Services industry. This will help it in building a better workplace.
Increasing wage structure of Bright Horizons Family Solutions Inc
– 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 Bright Horizons Family Solutions Inc.
Consumer confidence and its impact on Bright Horizons Family Solutions Inc 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 Personal Services industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Bright Horizons Family Solutions Inc may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal Services 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 Bright Horizons Family Solutions Inc business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc prominent markets.
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. Bright Horizons Family Solutions Inc 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bright Horizons Family Solutions Inc in Personal Services industry. The Personal Services 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.
Weighted SWOT Analysis of Bright Horizons Family Solutions Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc 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 Bright Horizons Family Solutions Inc needs to make to build a sustainable competitive advantage.