Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Firemans Contractors (United States)
Based on various researches at Oak Spring University , Firemans Contractors is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, supply chains are disrupted by pandemic , technology disruption,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
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- On Time Delivery | 27x7
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Introduction to SWOT Analysis of Firemans Contractors
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Firemans Contractors can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Firemans Contractors, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Firemans Contractors 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 Firemans Contractors can be done for the following purposes –
1. Strategic planning of Firemans Contractors
2. Improving business portfolio management of Firemans Contractors
3. Assessing feasibility of the new initiative in United States
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Firemans Contractors
Strengths of Firemans Contractors | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Firemans Contractors are -
Low bargaining power of suppliers
– Suppliers of Firemans Contractors in the Capital Goods sector have low bargaining power. Firemans Contractors has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Firemans Contractors to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Firemans Contractors in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Firemans Contractors digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Firemans Contractors 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 lead change in Construction Services
– Firemans Contractors is one of the leading players in the Construction Services industry in United States. Over the years it has not only transformed the business landscape in the Construction Services industry in United States but also across the existing markets. The ability to lead change has enabled Firemans Contractors in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Firemans Contractors has one of the best training and development program in Capital Goods 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.
Diverse revenue streams
– Firemans Contractors is present in almost all the verticals within the Construction Services industry. This has provided Firemans Contractors 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.
Effective Research and Development (R&D)
– Firemans Contractors has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Firemans Contractors staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
– The operational resilience strategy of Firemans Contractors comprises – understanding the underlying the factors in the Construction Services 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.
Innovation driven organization
– Firemans Contractors is one of the most innovative firm in Construction Services sector.
Sustainable margins compare to other players in Construction Services industry
– Firemans Contractors has clearly differentiated products in the market place. This has enabled Firemans Contractors to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Firemans Contractors to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Firemans Contractors has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Firemans Contractors have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Firemans Contractors
– The covid-19 pandemic has put organizational resilience at the centre of everthing Firemans Contractors does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Firemans Contractors | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Firemans Contractors are -
Lack of clear differentiation of Firemans Contractors products
– To increase the profitability and margins on the products, Firemans Contractors needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Firemans Contractors has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Firemans Contractors is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Firemans Contractors needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Firemans Contractors to focus more on services in the Construction Services industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Firemans Contractors needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Firemans Contractors can leverage the sales team experience to cultivate customer relationships as Firemans Contractors is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Firemans Contractors, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Firemans Contractors has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
– Compare to the competition, Firemans Contractors 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.
Capital Spending Reduction
– Even during the low interest decade, Firemans Contractors has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Construction Services industry using digital technology.
Slow to strategic competitive environment developments
– As Firemans Contractors is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Firemans Contractors is slow explore the new channels of communication. These new channels of communication can help Firemans Contractors to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
High dependence on Firemans Contractors ‘s star products
– The top 2 products and services of Firemans Contractors still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Firemans Contractors has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Firemans Contractors, it seems that company is thinking out the frontier risks that can impact Construction Services 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.
Firemans Contractors Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Firemans Contractors 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 Firemans Contractors 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.
– Firemans Contractors 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.
Better consumer reach
– The expansion of the 5G network will help Firemans Contractors to increase its market reach. Firemans Contractors 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Firemans Contractors can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
– Firemans Contractors can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Firemans Contractors can use these opportunities to build new business models that can help the communities that Firemans Contractors operates in. Secondly it can use opportunities from government spending in Construction Services sector.
Creating value in data economy
– The success of analytics program of Firemans Contractors has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Firemans Contractors to build a more holistic ecosystem for Firemans Contractors products in the Construction Services 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 Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Firemans Contractors in the Construction Services industry. Now Firemans Contractors can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Firemans Contractors can develop new processes and procedures in Construction Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Firemans Contractors 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Firemans Contractors 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 Firemans Contractors to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Firemans Contractors 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 Construction Services industry.
Using analytics as competitive advantage
– Firemans Contractors has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Firemans Contractors to build a competitive advantage using analytics. The analytics driven competitive advantage can help Firemans Contractors to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Firemans Contractors External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Firemans Contractors are -
Increasing wage structure of Firemans Contractors
– 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 Firemans Contractors.
– 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.
– Firemans Contractors 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. Firemans Contractors can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
Shortening product life cycle
– it is one of the major threat that Firemans Contractors is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Firemans Contractors 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 Firemans Contractors business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Firemans Contractors may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
High dependence on third party suppliers
– Firemans Contractors 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Firemans Contractors in Construction Services industry. The Construction Services 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Firemans Contractors needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
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. Firemans Contractors 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 Construction Services industry are lowering. It can presents Firemans Contractors with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
– 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 Firemans Contractors in the Construction Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Firemans Contractors Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Firemans Contractors 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 Firemans Contractors 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 Firemans Contractors 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 Firemans Contractors 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 Firemans Contractors needs to make to build a sustainable competitive advantage.