Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for BMC Stock Hldgs (United States)
Based on various researches at Oak Spring University , BMC Stock Hldgs is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
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- 100% Plagiarism Free
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Introduction to SWOT Analysis of BMC Stock Hldgs
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BMC Stock Hldgs can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BMC Stock Hldgs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BMC Stock Hldgs 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 BMC Stock Hldgs can be done for the following purposes –
1. Strategic planning of BMC Stock Hldgs
2. Improving business portfolio management of BMC Stock Hldgs
3. Assessing feasibility of the new initiative in United States
4. Making a Constr. - Supplies & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BMC Stock Hldgs
Strengths of BMC Stock Hldgs | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of BMC Stock Hldgs are -
Effective Research and Development (R&D)
– BMC Stock Hldgs has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – BMC Stock Hldgs staying ahead in the Constr. - Supplies & Fixtures industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
– The operational resilience strategy of BMC Stock Hldgs comprises – understanding the underlying the factors in the Constr. - Supplies & Fixtures 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.
Innovation driven organization
– BMC Stock Hldgs is one of the most innovative firm in Constr. - Supplies & Fixtures sector.
High switching costs
– The high switching costs that BMC Stock Hldgs 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.
Sustainable margins compare to other players in Constr. - Supplies & Fixtures industry
– BMC Stock Hldgs has clearly differentiated products in the market place. This has enabled BMC Stock Hldgs to fetch slight price premium compare to the competitors in the Constr. - Supplies & Fixtures industry. The sustainable margins have also helped BMC Stock Hldgs to invest into research and development (R&D) and innovation.
Training and development
– BMC Stock Hldgs has one of the best training and development program in Capital Goods 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.
High brand equity
– BMC Stock Hldgs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled BMC Stock Hldgs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
- BMC Stock Hldgs 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 BMC Stock Hldgs is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at BMC Stock Hldgs emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Constr. - Supplies & Fixtures industry
– BMC Stock Hldgs is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– BMC Stock Hldgs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. BMC Stock Hldgs 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.
Superior customer experience
– The customer experience strategy of BMC Stock Hldgs in Constr. - Supplies & Fixtures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
– BMC Stock Hldgs is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Constr. - Supplies & Fixtures industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses of BMC Stock Hldgs | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BMC Stock Hldgs are -
Ability to respond to the competition
– As the decision making is very deliberative at BMC Stock Hldgs, in the dynamic environment of Constr. - Supplies & Fixtures industry it has struggled to respond to the nimble upstart competition. BMC Stock Hldgs has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on BMC Stock Hldgs ‘s star products
– The top 2 products and services of BMC Stock Hldgs still accounts for major business revenue. This dependence on star products in Constr. - Supplies & Fixtures industry has resulted into insufficient focus on developing new products, even though BMC Stock Hldgs has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of BMC Stock Hldgs, it seems that company is thinking out the frontier risks that can impact Constr. - Supplies & Fixtures 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.
High operating costs
– Compare to the competitors, BMC Stock Hldgs has high operating costs in the Constr. - Supplies & Fixtures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract BMC Stock Hldgs lucrative customers.
Slow decision making process
– As mentioned earlier in the report, BMC Stock Hldgs has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Constr. - Supplies & Fixtures industry over the last five years. BMC Stock Hldgs 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.
High cash cycle compare to competitors
BMC Stock Hldgs has a high cash cycle compare to other players in the Constr. - Supplies & Fixtures industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that BMC Stock Hldgs needs to have more collaboration between its sales team and marketing team. Sales professionals in the Constr. - Supplies & Fixtures industry have deep experience in developing customer relationships. Marketing department at BMC Stock Hldgs can leverage the sales team experience to cultivate customer relationships as BMC Stock Hldgs is planning to shift buying processes online.
Products dominated business model
– Even though BMC Stock Hldgs has some of the most successful models in the Constr. - Supplies & Fixtures industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. BMC Stock Hldgs should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Constr. - Supplies & Fixtures industry
– The stress on hiring functional specialists at BMC Stock Hldgs 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, BMC Stock Hldgs needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of BMC Stock Hldgs is just above the Constr. - Supplies & Fixtures 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.
BMC Stock Hldgs Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of BMC Stock Hldgs are -
Buying journey improvements
– BMC Stock Hldgs can improve the customer journey of consumers in the Constr. - Supplies & Fixtures 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, BMC Stock Hldgs 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, BMC Stock Hldgs is facing challenges because of the dominance of functional experts in the organization. BMC Stock Hldgs can utilize new technology in the field of Constr. - Supplies & Fixtures industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 BMC Stock Hldgs 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.
– BMC Stock Hldgs has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Learning at scale
– Online learning technologies has now opened space for BMC Stock Hldgs 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, BMC Stock Hldgs can use these opportunities to build new business models that can help the communities that BMC Stock Hldgs operates in. Secondly it can use opportunities from government spending in Constr. - Supplies & Fixtures sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for BMC Stock Hldgs in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Constr. - Supplies & Fixtures industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– BMC Stock Hldgs 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.
– BMC Stock Hldgs can use the latest technology developments to improve its manufacturing and designing process in Constr. - Supplies & Fixtures 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.
Building a culture of innovation
– managers at BMC Stock Hldgs 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 Constr. - Supplies & Fixtures industry.
Better consumer reach
– The expansion of the 5G network will help BMC Stock Hldgs to increase its market reach. BMC Stock Hldgs 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Constr. - Supplies & Fixtures industry, but it has also influenced the consumer preferences. BMC Stock Hldgs can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats BMC Stock Hldgs External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of BMC Stock Hldgs are -
High dependence on third party suppliers
– BMC Stock Hldgs 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.
– BMC Stock Hldgs 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 Constr. - Supplies & Fixtures industry regulations.
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 BMC Stock Hldgs business can come under increasing regulations regarding data privacy, data security, etc.
– 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 BMC Stock Hldgs in the Constr. - Supplies & Fixtures sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of BMC Stock Hldgs.
Easy access to finance
– Easy access to finance in Constr. - Supplies & Fixtures industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. BMC Stock Hldgs can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Constr. - Supplies & Fixtures industry are lowering. It can presents BMC Stock Hldgs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. - Supplies & Fixtures sector.
– 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.
– BMC Stock Hldgs 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. BMC Stock Hldgs can take advantage of this fund but it will also bring new competitors in the Constr. - Supplies & Fixtures industry.
Consumer confidence and its impact on BMC Stock Hldgs 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 Constr. - Supplies & Fixtures industry and other sectors.
Stagnating economy with rate increase
– BMC Stock Hldgs 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 Constr. - Supplies & Fixtures industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, BMC Stock Hldgs 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 BMC Stock Hldgs prominent markets.
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. BMC Stock Hldgs needs to understand the core reasons impacting the Constr. - Supplies & Fixtures industry. This will help it in building a better workplace.
Weighted SWOT Analysis of BMC Stock Hldgs Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at BMC Stock Hldgs 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 BMC Stock Hldgs 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 BMC Stock Hldgs 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 BMC Stock Hldgs 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 BMC Stock Hldgs needs to make to build a sustainable competitive advantage.