Electronic Cigarettes Int (ECIGQ) SWOT Analysis / TOWS Matrix / MBA Resources
Tobacco
Strategy / 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 – talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
increasing household debt because of falling income levels, supply chains are disrupted by pandemic , etc
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.
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
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 -
Analytics focus
– Electronic Cigarettes Int 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 Tobacco 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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Electronic Cigarettes Int 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.
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.
Innovation driven organization
– Electronic Cigarettes Int is one of the most innovative firm in Tobacco sector.
Learning organization
- Electronic Cigarettes Int 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 Electronic Cigarettes Int is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Electronic Cigarettes Int emphasize – knowledge, initiative, and innovation.
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.
Digital Transformation in Tobacco industry
- digital transformation varies from industry to industry. For Electronic Cigarettes Int digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Electronic Cigarettes Int 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.
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.
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.
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.
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.
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 -
Employees’ less understanding of Electronic Cigarettes Int strategy
– From the outside it seems that the employees of Electronic Cigarettes Int 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative at Electronic Cigarettes Int, in the dynamic environment of Tobacco industry it has struggled to respond to the nimble upstart competition. Electronic Cigarettes Int has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
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.
Slow to strategic competitive environment developments
– As Electronic Cigarettes Int is one of the leading players in the Tobacco industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Tobacco industry in last five years.
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.
High dependence on Electronic Cigarettes Int ‘s star products
– The top 2 products and services of Electronic Cigarettes Int still accounts for major business revenue. This dependence on star products in Tobacco industry has resulted into insufficient focus on developing new products, even though Electronic Cigarettes Int has relatively successful track record of launching new products.
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 -
Better consumer reach
– The expansion of the 5G network will help Electronic Cigarettes Int to increase its market reach. Electronic Cigarettes Int 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.
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.
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.
Loyalty marketing
– Electronic Cigarettes Int 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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Tobacco industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Electronic Cigarettes Int 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. Electronic Cigarettes Int 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.
Creating value in data economy
– The success of analytics program of Electronic Cigarettes Int has opened avenues for new revenue streams for the organization in Tobacco industry. This can help Electronic Cigarettes Int to build a more holistic ecosystem for Electronic Cigarettes Int products in the Tobacco industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Electronic Cigarettes Int 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Electronic Cigarettes Int 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 Electronic Cigarettes Int to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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 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.
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.
High dependence on third party suppliers
– Electronic Cigarettes Int 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.
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.
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.
Consumer confidence and its impact on Electronic Cigarettes Int 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 Tobacco industry and other sectors.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Electronic Cigarettes Int 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 Electronic Cigarettes Int prominent markets.
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.
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.
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.