Sierra Wireless (SW) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sierra Wireless (Canada)

Based on various researches at Oak Spring University , Sierra Wireless is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc

---

---

---

---

Introduction to SWOT Analysis of Sierra Wireless

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

---

Strengths of Sierra Wireless | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sierra Wireless are -

Cross disciplinary teams

– Horizontal connected teams at the Sierra Wireless 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.

Digital Transformation in Communications Equipment industry

- digital transformation varies from industry to industry. For Sierra Wireless digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sierra Wireless 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

– Sierra Wireless is one of the leading players in the Communications Equipment 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.

High switching costs

– The high switching costs that Sierra Wireless 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.

Training and development

– Sierra Wireless has one of the best training and development program in Technology 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.

Learning organization

- Sierra Wireless 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 Sierra Wireless is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sierra Wireless emphasize – knowledge, initiative, and innovation.

High brand equity

– Sierra Wireless has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sierra Wireless to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Communications Equipment industry

– Sierra Wireless has clearly differentiated products in the market place. This has enabled Sierra Wireless to fetch slight price premium compare to the competitors in the Communications Equipment industry. The sustainable margins have also helped Sierra Wireless to invest into research and development (R&D) and innovation.

Innovation driven organization

– Sierra Wireless is one of the most innovative firm in Communications Equipment sector.

Low bargaining power of suppliers

– Suppliers of Sierra Wireless in the Technology sector have low bargaining power. Sierra Wireless has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sierra Wireless to manage not only supply disruptions but also source products at highly competitive prices.

Organizational Resilience of Sierra Wireless

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

Effective Research and Development (R&D)

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

---

---

Weaknesses of Sierra Wireless | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sierra Wireless are -

Products dominated business model

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

Compensation and incentives

– The revenue per employee of Sierra Wireless is just above the Communications Equipment 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.

Increasing silos among functional specialists

– The organizational structure of Sierra Wireless is dominated by functional specialists. It is not different from other players in the Communications Equipment industry, but Sierra Wireless needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sierra Wireless to focus more on services in the Communications Equipment industry rather than just following the product oriented approach.

High dependence on Sierra Wireless ‘s star products

– The top 2 products and services of Sierra Wireless still accounts for major business revenue. This dependence on star products in Communications Equipment industry has resulted into insufficient focus on developing new products, even though Sierra Wireless has relatively successful track record of launching new products.

High cash cycle compare to competitors

Sierra Wireless has a high cash cycle compare to other players in the Communications Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Skills based hiring in Communications Equipment industry

– The stress on hiring functional specialists at Sierra Wireless 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.

Interest costs

– Compare to the competition, Sierra Wireless 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.

Lack of clear differentiation of Sierra Wireless products

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

Slow to harness new channels of communication

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

Low market penetration in new markets

– Outside its home market of Canada, Sierra Wireless needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High operating costs

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

---

Sierra Wireless Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sierra Wireless are -

Lowering marketing communication costs

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

Increase in government spending

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

Buying journey improvements

– Sierra Wireless can improve the customer journey of consumers in the Communications Equipment 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.

Use of Bitcoin and other crypto currencies for transactions in Communications Equipment industry

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

Manufacturing automation

– Sierra Wireless can use the latest technology developments to improve its manufacturing and designing process in Communications Equipment 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.

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 Sierra Wireless 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.

Finding new ways to collaborate

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

Using analytics as competitive advantage

– Sierra Wireless has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Equipment sector. This continuous investment in analytics has enabled Sierra Wireless to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sierra Wireless to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Building a culture of innovation

– managers at Sierra Wireless 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 Communications Equipment industry.

Learning at scale

– Online learning technologies has now opened space for Sierra Wireless to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

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. Sierra Wireless can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sierra Wireless to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Sierra Wireless to hire the very best people irrespective of their geographical location.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Sierra Wireless can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

---

Threats Sierra Wireless External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sierra Wireless are -

Increasing wage structure of Sierra Wireless

– 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 Sierra Wireless.

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. Sierra Wireless 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.

Barriers of entry lowering

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

Regulatory challenges

– Sierra Wireless 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 Communications Equipment industry regulations.

Stagnating economy with rate increase

– Sierra Wireless 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 Communications Equipment industry.

Shortening product life cycle

– it is one of the major threat that Sierra Wireless is facing in Communications Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Sierra Wireless business can come under increasing regulations regarding data privacy, data security, etc.

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.

Learning curve for new practices

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

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.

Consumer confidence and its impact on Sierra Wireless 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 Communications Equipment industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– Sierra Wireless has witnessed rapid integration of technology during Covid-19 in the Communications Equipment industry. As one of the leading players in the industry, Sierra Wireless needs to keep up with the evolution of technology in the Communications Equipment 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Sierra Wireless in Communications Equipment industry. The Communications Equipment 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.

---

Weighted SWOT Analysis of Sierra Wireless Template, Example

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

--- ---