Electronic Cigarettes Int (ECIGQ) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Electronic Cigarettes Int (United States)

Based on various researches at Oak Spring University , Electronic Cigarettes Int is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing transportation and logistics costs, wage bills are increasing, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Electronic Cigarettes Int

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Electronic Cigarettes Int can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Electronic Cigarettes Int, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Electronic Cigarettes Int 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 Electronic Cigarettes Int can be done for the following purposes –
1. Strategic planning of Electronic Cigarettes Int
2. Improving business portfolio management of Electronic Cigarettes Int
3. Assessing feasibility of the new initiative in United States
4. Making a Tobacco sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Electronic Cigarettes Int

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Strengths of Electronic Cigarettes Int | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Electronic Cigarettes Int are -

Successful track record of launching new products

– Electronic Cigarettes Int has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Electronic Cigarettes Int 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.

Ability to recruit top talent

– Electronic Cigarettes Int is one of the leading players in the Tobacco 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.

Diverse revenue streams

– Electronic Cigarettes Int is present in almost all the verticals within the Tobacco industry. This has provided Electronic Cigarettes Int 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.

Ability to lead change in Tobacco

– Electronic Cigarettes Int is one of the leading players in the Tobacco industry in United States. Over the years it has not only transformed the business landscape in the Tobacco industry in United States but also across the existing markets. The ability to lead change has enabled Electronic Cigarettes Int in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Organizational Resilience of Electronic Cigarettes Int

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

Low bargaining power of suppliers

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

Effective Research and Development (R&D)

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

Highly skilled collaborators

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

Training and development

– Electronic Cigarettes Int has one of the best training and development program in Consumer/Non-Cyclical 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.

Superior customer experience

– The customer experience strategy of Electronic Cigarettes Int in Tobacco industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Operational resilience

– The operational resilience strategy of Electronic Cigarettes Int comprises – understanding the underlying the factors in the Tobacco 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.

High switching costs

– The high switching costs that Electronic Cigarettes Int 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.

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Weaknesses of Electronic Cigarettes Int | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Electronic Cigarettes Int are -

Interest costs

– Compare to the competition, Electronic Cigarettes Int 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.

Skills based hiring in Tobacco industry

– The stress on hiring functional specialists at Electronic Cigarettes Int 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.

Compensation and incentives

– The revenue per employee of Electronic Cigarettes Int is just above the Tobacco 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.

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 Electronic Cigarettes Int supply chain. Even after few cautionary changes, Electronic Cigarettes Int is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Electronic Cigarettes Int vulnerable to further global disruptions in South East Asia.

Workers concerns about automation

– As automation is fast increasing in the Tobacco industry, Electronic Cigarettes Int 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.

Slow to harness new channels of communication

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

Slow decision making process

– As mentioned earlier in the report, Electronic Cigarettes Int has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Tobacco industry over the last five years. Electronic Cigarettes Int 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 operating costs

– Compare to the competitors, Electronic Cigarettes Int has high operating costs in the Tobacco industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Electronic Cigarettes Int lucrative customers.

Need for greater diversity

– Electronic Cigarettes Int 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.

Products dominated business model

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

Lack of clear differentiation of Electronic Cigarettes Int products

– To increase the profitability and margins on the products, Electronic Cigarettes Int needs to provide more differentiated products than what it is currently offering in the marketplace.

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Electronic Cigarettes Int Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Electronic Cigarettes Int are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Electronic Cigarettes Int can use these opportunities to build new business models that can help the communities that Electronic Cigarettes Int operates in. Secondly it can use opportunities from government spending in Tobacco sector.

Manufacturing automation

– Electronic Cigarettes Int can use the latest technology developments to improve its manufacturing and designing process in Tobacco 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.

Buying journey improvements

– Electronic Cigarettes Int can improve the customer journey of consumers in the Tobacco 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. Electronic Cigarettes Int can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Finding new ways to collaborate

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

Leveraging digital technologies

– Electronic Cigarettes Int 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.

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 Electronic Cigarettes Int 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.

Building a culture of innovation

– managers at Electronic Cigarettes Int 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 Tobacco industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Electronic Cigarettes Int 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

– Electronic Cigarettes Int has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Tobacco sector. This continuous investment in analytics has enabled Electronic Cigarettes Int to build a competitive advantage using analytics. The analytics driven competitive advantage can help Electronic Cigarettes Int 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 Tobacco industry

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

Redefining models of collaboration and team work

– As explained in the weaknesses section, Electronic Cigarettes Int is facing challenges because of the dominance of functional experts in the organization. Electronic Cigarettes Int can utilize new technology in the field of Tobacco industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Electronic Cigarettes Int in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Tobacco industry, and it will provide faster access to the consumers.

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Threats Electronic Cigarettes Int External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Electronic Cigarettes Int are -

Technology acceleration in Forth Industrial Revolution

– Electronic Cigarettes Int has witnessed rapid integration of technology during Covid-19 in the Tobacco industry. As one of the leading players in the industry, Electronic Cigarettes Int needs to keep up with the evolution of technology in the Tobacco 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.

Shortening product life cycle

– it is one of the major threat that Electronic Cigarettes Int is facing in Tobacco sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Learning curve for new practices

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

Barriers of entry lowering

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

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 Electronic Cigarettes Int in the Tobacco sector and impact the bottomline of the organization.

Environmental challenges

– Electronic Cigarettes Int 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. Electronic Cigarettes Int can take advantage of this fund but it will also bring new competitors in the Tobacco industry.

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 Electronic Cigarettes Int.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Electronic Cigarettes Int in Tobacco industry. The Tobacco 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.

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 Electronic Cigarettes Int business can come under increasing regulations regarding data privacy, data security, etc.

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.

Regulatory challenges

– Electronic Cigarettes Int 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 Tobacco industry regulations.

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. Electronic Cigarettes Int 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.

Stagnating economy with rate increase

– Electronic Cigarettes Int 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 Tobacco industry.

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Weighted SWOT Analysis of Electronic Cigarettes Int Template, Example

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

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