SWOT Analysis / TOWS Matrix for Richelieu Hardware (Canada)
Based on various researches at Oak Spring University , Richelieu Hardware is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , technology disruption, etc
Introduction to SWOT Analysis of Richelieu Hardware
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Richelieu Hardware can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Richelieu Hardware, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Richelieu Hardware 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 Richelieu Hardware can be done for the following purposes –
1. Strategic planning of Richelieu Hardware
2. Improving business portfolio management of Richelieu Hardware
3. Assessing feasibility of the new initiative in Canada
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Richelieu Hardware
Strengths of Richelieu Hardware | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Richelieu Hardware are -
Learning organization
- Richelieu Hardware 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 Richelieu Hardware is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Richelieu Hardware emphasize – knowledge, initiative, and innovation.
Ability to lead change in Personal & Household Prods.
– Richelieu Hardware is one of the leading players in the Personal & Household Prods. industry in Canada. Over the years it has not only transformed the business landscape in the Personal & Household Prods. industry in Canada but also across the existing markets. The ability to lead change has enabled Richelieu Hardware in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Richelieu Hardware in Personal & Household Prods. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Richelieu Hardware is present in almost all the verticals within the Personal & Household Prods. industry. This has provided Richelieu Hardware 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.
Operational resilience
– The operational resilience strategy of Richelieu Hardware comprises – understanding the underlying the factors in the Personal & Household Prods. 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.
Organizational Resilience of Richelieu Hardware
– The covid-19 pandemic has put organizational resilience at the centre of everthing Richelieu Hardware does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Richelieu Hardware has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Richelieu Hardware 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.
Sustainable margins compare to other players in Personal & Household Prods. industry
– Richelieu Hardware has clearly differentiated products in the market place. This has enabled Richelieu Hardware to fetch slight price premium compare to the competitors in the Personal & Household Prods. industry. The sustainable margins have also helped Richelieu Hardware to invest into research and development (R&D) and innovation.
High brand equity
– Richelieu Hardware has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Richelieu Hardware to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Richelieu Hardware is one of the leading players in the Personal & Household Prods. industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Richelieu Hardware digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Richelieu Hardware 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.
Strong track record of project management in the Personal & Household Prods. industry
– Richelieu Hardware is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Richelieu Hardware | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Richelieu Hardware are -
Low market penetration in new markets
– Outside its home market of Canada, Richelieu Hardware needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Richelieu Hardware, it seems that company is thinking out the frontier risks that can impact Personal & Household Prods. industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Richelieu Hardware has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal & Household Prods. industry over the last five years. Richelieu Hardware 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.
Employees’ less understanding of Richelieu Hardware strategy
– From the outside it seems that the employees of Richelieu Hardware 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.
High bargaining power of channel partners in Personal & Household Prods. industry
– because of the regulatory requirements in Canada, Richelieu Hardware 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 Personal & Household Prods. industry.
Increasing silos among functional specialists
– The organizational structure of Richelieu Hardware is dominated by functional specialists. It is not different from other players in the Personal & Household Prods. industry, but Richelieu Hardware needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Richelieu Hardware to focus more on services in the Personal & Household Prods. industry rather than just following the product oriented approach.
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 Richelieu Hardware supply chain. Even after few cautionary changes, Richelieu Hardware is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Richelieu Hardware vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Richelieu Hardware has some of the most successful models in the Personal & Household Prods. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Richelieu Hardware should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Richelieu Hardware, in the dynamic environment of Personal & Household Prods. industry it has struggled to respond to the nimble upstart competition. Richelieu Hardware 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 Richelieu Hardware needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal & Household Prods. industry have deep experience in developing customer relationships. Marketing department at Richelieu Hardware can leverage the sales team experience to cultivate customer relationships as Richelieu Hardware is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Richelieu Hardware has high operating costs in the Personal & Household Prods. industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Richelieu Hardware lucrative customers.
Richelieu Hardware Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Richelieu Hardware are -
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 Richelieu Hardware 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.
Using analytics as competitive advantage
– Richelieu Hardware has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal & Household Prods. sector. This continuous investment in analytics has enabled Richelieu Hardware to build a competitive advantage using analytics. The analytics driven competitive advantage can help Richelieu Hardware to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Richelieu Hardware 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal & Household Prods. industry, but it has also influenced the consumer preferences. Richelieu Hardware can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Richelieu Hardware can use these opportunities to build new business models that can help the communities that Richelieu Hardware operates in. Secondly it can use opportunities from government spending in Personal & Household Prods. sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Richelieu Hardware can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Richelieu Hardware is facing challenges because of the dominance of functional experts in the organization. Richelieu Hardware can utilize new technology in the field of Personal & Household Prods. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Richelieu Hardware 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 Richelieu Hardware to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Richelieu Hardware can use the latest technology developments to improve its manufacturing and designing process in Personal & Household Prods. 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.
Leveraging digital technologies
– Richelieu Hardware 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.
Developing new processes and practices
– Richelieu Hardware can develop new processes and procedures in Personal & Household Prods. industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Richelieu Hardware 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 Personal & Household Prods. industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Richelieu Hardware can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Richelieu Hardware External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Richelieu Hardware are -
Shortening product life cycle
– it is one of the major threat that Richelieu Hardware is facing in Personal & Household Prods. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Richelieu Hardware in the Personal & Household Prods. sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Richelieu Hardware.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Richelieu Hardware in Personal & Household Prods. industry. The Personal & Household Prods. 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Richelieu Hardware 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.
Technology acceleration in Forth Industrial Revolution
– Richelieu Hardware has witnessed rapid integration of technology during Covid-19 in the Personal & Household Prods. industry. As one of the leading players in the industry, Richelieu Hardware needs to keep up with the evolution of technology in the Personal & Household Prods. 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.
Increasing wage structure of Richelieu Hardware
– 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 Richelieu Hardware.
Environmental challenges
– Richelieu Hardware 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. Richelieu Hardware can take advantage of this fund but it will also bring new competitors in the Personal & Household Prods. industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Richelieu Hardware 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 Richelieu Hardware prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal & Household Prods. industry are lowering. It can presents Richelieu Hardware with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal & Household Prods. sector.
Regulatory challenges
– Richelieu Hardware 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 Personal & Household Prods. industry regulations.
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.
Weighted SWOT Analysis of Richelieu Hardware Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Richelieu Hardware 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 Richelieu Hardware 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 Richelieu Hardware 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 Richelieu Hardware 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 Richelieu Hardware needs to make to build a sustainable competitive advantage.