Cray (CRAY) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Cray (United States)

Based on various researches at Oak Spring University , Cray is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, there is backlash against globalization, supply chains are disrupted by pandemic , wage bills are increasing, increasing commodity prices, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Cray

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cray can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cray, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cray 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Cray can be done for the following purposes –
1. Strategic planning of Cray
2. Improving business portfolio management of Cray
3. Assessing feasibility of the new initiative in United States
4. Making a Computer Hardware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cray

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Strengths of Cray | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Cray are -

Digital Transformation in Computer Hardware industry

- digital transformation varies from industry to industry. For Cray digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cray 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.

Sustainable margins compare to other players in Computer Hardware industry

– Cray has clearly differentiated products in the market place. This has enabled Cray to fetch slight price premium compare to the competitors in the Computer Hardware industry. The sustainable margins have also helped Cray to invest into research and development (R&D) and innovation.

Organizational Resilience of Cray

– The covid-19 pandemic has put organizational resilience at the centre of everthing Cray does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Strong track record of project management in the Computer Hardware industry

– Cray is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Low bargaining power of suppliers

– Suppliers of Cray in the Technology sector have low bargaining power. Cray has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cray to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Cray is present in almost all the verticals within the Computer Hardware industry. This has provided Cray a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Highly skilled collaborators

– Cray has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Hardware industry. Secondly the value chain collaborators of Cray have helped the firm to develop new products and bring them quickly to the marketplace.

Operational resilience

– The operational resilience strategy of Cray comprises – understanding the underlying the factors in the Computer Hardware 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.

Effective Research and Development (R&D)

– Cray has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cray staying ahead in the Computer Hardware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of Cray in Computer Hardware industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Analytics focus

– Cray 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 Computer Hardware 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.

High brand equity

– Cray has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cray to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

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Weaknesses of Cray | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Cray are -

Compensation and incentives

– The revenue per employee of Cray is just above the Computer Hardware 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.

Ability to respond to the competition

– As the decision making is very deliberative at Cray, in the dynamic environment of Computer Hardware industry it has struggled to respond to the nimble upstart competition. Cray has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Aligning sales with marketing

– From the outside it seems that Cray needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Hardware industry have deep experience in developing customer relationships. Marketing department at Cray can leverage the sales team experience to cultivate customer relationships as Cray is planning to shift buying processes online.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cray is slow explore the new channels of communication. These new channels of communication can help Cray to provide better information regarding Computer Hardware products and services. It can also build an online community to further reach out to potential customers.

High bargaining power of channel partners in Computer Hardware industry

– because of the regulatory requirements in United States, Cray 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 Computer Hardware industry.

Low market penetration in new markets

– Outside its home market of United States, Cray needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though Cray has some of the most successful models in the Computer Hardware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Cray should strive to include more intangible value offerings along with its core products and services.

Workers concerns about automation

– As automation is fast increasing in the Computer Hardware industry, Cray 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.

Skills based hiring in Computer Hardware industry

– The stress on hiring functional specialists at Cray 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.

Increasing silos among functional specialists

– The organizational structure of Cray is dominated by functional specialists. It is not different from other players in the Computer Hardware industry, but Cray needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cray to focus more on services in the Computer Hardware industry rather than just following the product oriented approach.

Need for greater diversity

– Cray 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.

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Cray Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Cray are -

Better consumer reach

– The expansion of the 5G network will help Cray to increase its market reach. Cray 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.

Using analytics as competitive advantage

– Cray has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Hardware sector. This continuous investment in analytics has enabled Cray to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cray to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Use of Bitcoin and other crypto currencies for transactions in Computer Hardware industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cray in the Computer Hardware industry. Now Cray can target international markets with far fewer capital restrictions requirements than the existing system.

Loyalty marketing

– Cray 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.

Leveraging digital technologies

– Cray 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.

Building a culture of innovation

– managers at Cray 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 Computer Hardware industry.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Computer Hardware industry, but it has also influenced the consumer preferences. Cray can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for Cray 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Computer Hardware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cray 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. Cray 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Cray 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 Cray to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Buying journey improvements

– Cray can improve the customer journey of consumers in the Computer Hardware 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.

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. Cray can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Cray can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats Cray External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Cray are -

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. Cray 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.

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. Cray needs to understand the core reasons impacting the Computer Hardware industry. This will help it in building a better workplace.

Regulatory challenges

– Cray 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 Computer Hardware industry regulations.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Cray in Computer Hardware industry. The Computer Hardware 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.

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 Cray.

Consumer confidence and its impact on Cray 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 Computer Hardware industry and other sectors.

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 Cray in the Computer Hardware sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Cray has witnessed rapid integration of technology during Covid-19 in the Computer Hardware industry. As one of the leading players in the industry, Cray needs to keep up with the evolution of technology in the Computer Hardware 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.

Environmental challenges

– Cray 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. Cray can take advantage of this fund but it will also bring new competitors in the Computer Hardware industry.

Easy access to finance

– Easy access to finance in Computer Hardware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cray can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Cray may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Hardware sector.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Computer Hardware industry are lowering. It can presents Cray with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Hardware sector.

Stagnating economy with rate increase

– Cray 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 Computer Hardware industry.

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Weighted SWOT Analysis of Cray Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cray 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 Cray 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 Cray 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 Cray 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 Cray needs to make to build a sustainable competitive advantage.

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