Glowpoint (GLOW) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Glowpoint (United States)

Based on various researches at Oak Spring University , Glowpoint is operating in a macro-environment that has been destablized by – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, 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, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, there is backlash against globalization, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Glowpoint

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Glowpoint can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Glowpoint, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Glowpoint 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Glowpoint can be done for the following purposes –
1. Strategic planning of Glowpoint
2. Improving business portfolio management of Glowpoint
3. Assessing feasibility of the new initiative in United States
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Glowpoint

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

The strengths of Glowpoint are -

High switching costs

– The high switching costs that Glowpoint 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.

Cross disciplinary teams

– Horizontal connected teams at the Glowpoint 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.

Highly skilled collaborators

– Glowpoint has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Glowpoint have helped the firm to develop new products and bring them quickly to the marketplace.

Digital Transformation in Business Services industry

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

Effective Research and Development (R&D)

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

Low bargaining power of suppliers

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

Learning organization

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

Analytics focus

– Glowpoint 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 Business Services industry. The technology infrastructure of United States is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Innovation driven organization

– Glowpoint is one of the most innovative firm in Business Services sector.

Organizational Resilience of Glowpoint

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

Ability to recruit top talent

– Glowpoint is one of the leading players in the Business Services industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.

Ability to lead change in Business Services

– Glowpoint is one of the leading players in the Business Services industry in United States. Over the years it has not only transformed the business landscape in the Business Services industry in United States but also across the existing markets. The ability to lead change has enabled Glowpoint in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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

The weaknesses of Glowpoint are -

High cash cycle compare to competitors

Glowpoint has a high cash cycle compare to other players in the Business 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.

Aligning sales with marketing

– From the outside it seems that Glowpoint needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Glowpoint can leverage the sales team experience to cultivate customer relationships as Glowpoint is planning to shift buying processes online.

Capital Spending Reduction

– Even during the low interest decade, Glowpoint 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 Business Services industry using digital technology.

Compensation and incentives

– The revenue per employee of Glowpoint is just above the Business Services 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.

Skills based hiring in Business Services industry

– The stress on hiring functional specialists at Glowpoint has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

High dependence on Glowpoint ‘s star products

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

Interest costs

– Compare to the competition, Glowpoint 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.

Employees’ less understanding of Glowpoint strategy

– From the outside it seems that the employees of Glowpoint 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 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 Glowpoint supply chain. Even after few cautionary changes, Glowpoint is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Glowpoint vulnerable to further global disruptions in South East Asia.

Products dominated business model

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

Slow to strategic competitive environment developments

– As Glowpoint is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.

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

The opportunities of Glowpoint are -

Finding new ways to collaborate

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

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Glowpoint 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 Glowpoint 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

– Glowpoint can use the latest technology developments to improve its manufacturing and designing process in Business 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Glowpoint 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. Glowpoint 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.

Loyalty marketing

– Glowpoint 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.

Using analytics as competitive advantage

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

Buying journey improvements

– Glowpoint can improve the customer journey of consumers in the Business Services 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Glowpoint 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.

Developing new processes and practices

– Glowpoint can develop new processes and procedures in Business 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.

Increase in government spending

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

Leveraging digital technologies

– Glowpoint 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.

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 Glowpoint 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.

Better consumer reach

– The expansion of the 5G network will help Glowpoint to increase its market reach. Glowpoint 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.

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

The threats of Glowpoint are -

Barriers of entry lowering

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

Regulatory challenges

– Glowpoint 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 Business Services industry regulations.

Environmental challenges

– Glowpoint 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. Glowpoint can take advantage of this fund but it will also bring new competitors in the Business Services industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Glowpoint 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 Glowpoint prominent markets.

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. Glowpoint 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.

Increasing wage structure of Glowpoint

– 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 Glowpoint.

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

Consumer confidence and its impact on Glowpoint 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 Business Services industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– Glowpoint has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Glowpoint needs to keep up with the evolution of technology in the Business Services 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.

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.

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 Glowpoint.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Glowpoint in Business Services industry. The Business 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.

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Weighted SWOT Analysis of Glowpoint Template, Example

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

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