Diebold (DBD) SWOT Analysis / TOWS Matrix / MBA Resources
Scientific & Technical Instr.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Diebold (United States)
Based on various researches at Oak Spring University , Diebold is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, central banks are concerned over increasing inflation, technology disruption, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Diebold can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Diebold, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Diebold 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 Diebold can be done for the following purposes –
1. Strategic planning of Diebold
2. Improving business portfolio management of Diebold
3. Assessing feasibility of the new initiative in United States
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Diebold
Strengths of Diebold | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Diebold are -
Learning organization
- Diebold 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 Diebold is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Diebold emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Diebold
– The covid-19 pandemic has put organizational resilience at the centre of everthing Diebold does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Diebold has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Scientific & Technical Instr. industry. Secondly the value chain collaborators of Diebold have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Diebold 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.
Effective Research and Development (R&D)
– Diebold has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Diebold staying ahead in the Scientific & Technical Instr. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Diebold is one of the leading players in the Scientific & Technical Instr. 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.
Ability to lead change in Scientific & Technical Instr.
– Diebold is one of the leading players in the Scientific & Technical Instr. industry in United States. Over the years it has not only transformed the business landscape in the Scientific & Technical Instr. industry in United States but also across the existing markets. The ability to lead change has enabled Diebold in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Diebold is present in almost all the verticals within the Scientific & Technical Instr. industry. This has provided Diebold 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.
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– Diebold has clearly differentiated products in the market place. This has enabled Diebold to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Diebold to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Diebold in the Technology sector have low bargaining power. Diebold has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Diebold to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Diebold is one of the most innovative firm in Scientific & Technical Instr. sector.
High brand equity
– Diebold has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Diebold to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Diebold | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Diebold are -
Ability to respond to the competition
– As the decision making is very deliberative at Diebold, in the dynamic environment of Scientific & Technical Instr. industry it has struggled to respond to the nimble upstart competition. Diebold has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Diebold supply chain. Even after few cautionary changes, Diebold is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Diebold vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Diebold strategy
– From the outside it seems that the employees of Diebold 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.
Low market penetration in new markets
– Outside its home market of United States, Diebold needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Diebold has some of the most successful models in the Scientific & Technical Instr. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Diebold should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Diebold 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 Scientific & Technical Instr. industry using digital technology.
Lack of clear differentiation of Diebold products
– To increase the profitability and margins on the products, Diebold needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Diebold is just above the Scientific & Technical Instr. 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, Diebold has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Scientific & Technical Instr. industry over the last five years. Diebold 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.
Increasing silos among functional specialists
– The organizational structure of Diebold is dominated by functional specialists. It is not different from other players in the Scientific & Technical Instr. industry, but Diebold needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Diebold to focus more on services in the Scientific & Technical Instr. industry rather than just following the product oriented approach.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in United States, Diebold 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 Scientific & Technical Instr. industry.
Diebold Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Diebold are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Diebold 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.
Using analytics as competitive advantage
– Diebold has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Scientific & Technical Instr. sector. This continuous investment in analytics has enabled Diebold to build a competitive advantage using analytics. The analytics driven competitive advantage can help Diebold to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Scientific & Technical Instr. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Diebold 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. Diebold 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, Diebold 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 Diebold 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
– Diebold can improve the customer journey of consumers in the Scientific & Technical Instr. 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.
Loyalty marketing
– Diebold 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Diebold in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Scientific & Technical Instr. industry, and it will provide faster access to the consumers.
Manufacturing automation
– Diebold can use the latest technology developments to improve its manufacturing and designing process in Scientific & Technical Instr. 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.
Better consumer reach
– The expansion of the 5G network will help Diebold to increase its market reach. Diebold 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Diebold 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 Diebold to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Diebold can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Diebold 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Diebold can use these opportunities to build new business models that can help the communities that Diebold operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Threats Diebold External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Diebold 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. Diebold 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.
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 Diebold.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Diebold 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 Diebold prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Diebold in Scientific & Technical Instr. industry. The Scientific & Technical Instr. 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.
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 Diebold in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
Consumer confidence and its impact on Diebold 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 Scientific & Technical Instr. industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Diebold is facing in Scientific & Technical Instr. 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 Scientific & Technical Instr. industry are lowering. It can presents Diebold with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Scientific & Technical Instr. sector.
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. Diebold needs to understand the core reasons impacting the Scientific & Technical Instr. industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Diebold 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 Scientific & Technical Instr. industry.
Increasing wage structure of Diebold
– 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 Diebold.
Technology acceleration in Forth Industrial Revolution
– Diebold has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Diebold needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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.
Easy access to finance
– Easy access to finance in Scientific & Technical Instr. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Diebold can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Diebold Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Diebold 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 Diebold 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 Diebold 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 Diebold 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 Diebold needs to make to build a sustainable competitive advantage.