SWOT Analysis / TOWS Matrix for Interfor Corp (Canada)
Based on various researches at Oak Spring University , Interfor Corp is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Interfor Corp can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Interfor Corp, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Interfor Corp 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 Interfor Corp can be done for the following purposes –
1. Strategic planning of Interfor Corp
2. Improving business portfolio management of Interfor Corp
3. Assessing feasibility of the new initiative in Canada
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Interfor Corp
Strengths of Interfor Corp | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Interfor Corp are -
Highly skilled collaborators
– Interfor Corp has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Forestry & Wood Products industry. Secondly the value chain collaborators of Interfor Corp have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Interfor Corp has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Interfor Corp to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Interfor Corp in Forestry & Wood Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Interfor Corp has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Interfor Corp staying ahead in the Forestry & Wood Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Interfor Corp 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.
Successful track record of launching new products
– Interfor Corp has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Interfor Corp 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
– Interfor Corp is one of the leading players in the Forestry & Wood Products 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.
Innovation driven organization
– Interfor Corp is one of the most innovative firm in Forestry & Wood Products sector.
Sustainable margins compare to other players in Forestry & Wood Products industry
– Interfor Corp has clearly differentiated products in the market place. This has enabled Interfor Corp to fetch slight price premium compare to the competitors in the Forestry & Wood Products industry. The sustainable margins have also helped Interfor Corp to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Interfor Corp is present in almost all the verticals within the Forestry & Wood Products industry. This has provided Interfor Corp 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.
Analytics focus
– Interfor Corp 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 Forestry & Wood Products industry. The technology infrastructure of Canada 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.
Organizational Resilience of Interfor Corp
– The covid-19 pandemic has put organizational resilience at the centre of everthing Interfor Corp does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Interfor Corp | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Interfor Corp are -
High dependence on Interfor Corp ‘s star products
– The top 2 products and services of Interfor Corp still accounts for major business revenue. This dependence on star products in Forestry & Wood Products industry has resulted into insufficient focus on developing new products, even though Interfor Corp has relatively successful track record of launching new products.
High bargaining power of channel partners in Forestry & Wood Products industry
– because of the regulatory requirements in Canada, Interfor Corp 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 Forestry & Wood Products industry.
Products dominated business model
– Even though Interfor Corp has some of the most successful models in the Forestry & Wood Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Interfor Corp should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Canada, Interfor Corp needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Interfor Corp 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.
No frontier risks strategy
– From the 10K / annual statement of Interfor Corp, it seems that company is thinking out the frontier risks that can impact Forestry & Wood Products 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.
Lack of clear differentiation of Interfor Corp products
– To increase the profitability and margins on the products, Interfor Corp needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Interfor Corp has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Forestry & Wood Products industry over the last five years. Interfor Corp 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.
Slow to strategic competitive environment developments
– As Interfor Corp is one of the leading players in the Forestry & Wood Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Forestry & Wood Products industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Interfor Corp, in the dynamic environment of Forestry & Wood Products industry it has struggled to respond to the nimble upstart competition. Interfor Corp has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Interfor Corp 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.
Interfor Corp Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Interfor Corp are -
Creating value in data economy
– The success of analytics program of Interfor Corp has opened avenues for new revenue streams for the organization in Forestry & Wood Products industry. This can help Interfor Corp to build a more holistic ecosystem for Interfor Corp products in the Forestry & Wood Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Forestry & Wood Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Interfor Corp in the Forestry & Wood Products industry. Now Interfor Corp can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Interfor Corp 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 Interfor Corp to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Interfor Corp to increase its market reach. Interfor Corp 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.
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. Interfor Corp can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Interfor Corp has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Forestry & Wood Products sector. This continuous investment in analytics has enabled Interfor Corp to build a competitive advantage using analytics. The analytics driven competitive advantage can help Interfor Corp to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Interfor Corp 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Interfor Corp can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Interfor Corp 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Interfor Corp can use these opportunities to build new business models that can help the communities that Interfor Corp operates in. Secondly it can use opportunities from government spending in Forestry & Wood Products sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Interfor Corp 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Forestry & Wood Products industry, but it has also influenced the consumer preferences. Interfor Corp can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Forestry & Wood Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Interfor Corp 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. Interfor Corp 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.
Threats Interfor Corp External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Interfor Corp are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Interfor Corp may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Forestry & Wood Products sector.
Shortening product life cycle
– it is one of the major threat that Interfor Corp is facing in Forestry & Wood Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Interfor Corp 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 Forestry & Wood Products industry.
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.
Environmental challenges
– Interfor Corp 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. Interfor Corp can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
Consumer confidence and its impact on Interfor Corp 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 Forestry & Wood Products industry and other sectors.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Interfor Corp in the Forestry & Wood Products sector and impact the bottomline of the organization.
Regulatory challenges
– Interfor Corp 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 Forestry & Wood Products industry regulations.
Easy access to finance
– Easy access to finance in Forestry & Wood Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Interfor Corp can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Interfor Corp business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Interfor Corp
– 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 Interfor Corp.
High dependence on third party suppliers
– Interfor Corp 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.
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 Interfor Corp.
Weighted SWOT Analysis of Interfor Corp Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Interfor Corp 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 Interfor Corp 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 Interfor Corp 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 Interfor Corp 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 Interfor Corp needs to make to build a sustainable competitive advantage.