Heroux-Devtek Inc. (HRX) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Heroux-Devtek Inc. (Canada)

Based on various researches at Oak Spring University , Heroux-Devtek Inc. is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, supply chains are disrupted by pandemic , increasing energy prices, increasing household debt because of falling income levels, technology disruption, geopolitical disruptions, etc

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Introduction to SWOT Analysis of Heroux-Devtek Inc.

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

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Strengths of Heroux-Devtek Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Heroux-Devtek Inc. are -

Superior customer experience

– The customer experience strategy of Heroux-Devtek Inc. in Aerospace & Defense industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Learning organization

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

Operational resilience

– The operational resilience strategy of Heroux-Devtek Inc. comprises – understanding the underlying the factors in the Aerospace & Defense 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.

Strong track record of project management in the Aerospace & Defense industry

– Heroux-Devtek Inc. is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Organizational Resilience of Heroux-Devtek Inc.

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

Cross disciplinary teams

– Horizontal connected teams at the Heroux-Devtek Inc. 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.

High switching costs

– The high switching costs that Heroux-Devtek Inc. 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

– Heroux-Devtek Inc. 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.

Analytics focus

– Heroux-Devtek Inc. 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 Aerospace & Defense 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.

Sustainable margins compare to other players in Aerospace & Defense industry

– Heroux-Devtek Inc. has clearly differentiated products in the market place. This has enabled Heroux-Devtek Inc. to fetch slight price premium compare to the competitors in the Aerospace & Defense industry. The sustainable margins have also helped Heroux-Devtek Inc. to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Heroux-Devtek Inc. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Aerospace & Defense industry. Secondly the value chain collaborators of Heroux-Devtek Inc. have helped the firm to develop new products and bring them quickly to the marketplace.

Digital Transformation in Aerospace & Defense industry

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

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Weaknesses of Heroux-Devtek Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Heroux-Devtek Inc. are -

Need for greater diversity

– Heroux-Devtek Inc. 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Heroux-Devtek Inc. is slow explore the new channels of communication. These new channels of communication can help Heroux-Devtek Inc. to provide better information regarding Aerospace & Defense products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Heroux-Devtek Inc. strategy

– From the outside it seems that the employees of Heroux-Devtek Inc. 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.

Slow decision making process

– As mentioned earlier in the report, Heroux-Devtek Inc. has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Aerospace & Defense industry over the last five years. Heroux-Devtek Inc. 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.

Workers concerns about automation

– As automation is fast increasing in the Aerospace & Defense industry, Heroux-Devtek Inc. needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Increasing silos among functional specialists

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

Products dominated business model

– Even though Heroux-Devtek Inc. has some of the most successful models in the Aerospace & Defense industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Heroux-Devtek Inc. 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 Heroux-Devtek Inc., in the dynamic environment of Aerospace & Defense industry it has struggled to respond to the nimble upstart competition. Heroux-Devtek Inc. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Lack of clear differentiation of Heroux-Devtek Inc. products

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

Slow to strategic competitive environment developments

– As Heroux-Devtek Inc. is one of the leading players in the Aerospace & Defense industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Aerospace & Defense industry in last five years.

Aligning sales with marketing

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

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Heroux-Devtek Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Heroux-Devtek Inc. are -

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. Heroux-Devtek Inc. can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Creating value in data economy

– The success of analytics program of Heroux-Devtek Inc. has opened avenues for new revenue streams for the organization in Aerospace & Defense industry. This can help Heroux-Devtek Inc. to build a more holistic ecosystem for Heroux-Devtek Inc. products in the Aerospace & Defense industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Heroux-Devtek Inc. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Aerospace & Defense industry, and it will provide faster access to the consumers.

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 Heroux-Devtek Inc. 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Heroux-Devtek Inc. 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 Heroux-Devtek Inc. 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 Heroux-Devtek Inc. can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Developing new processes and practices

– Heroux-Devtek Inc. can develop new processes and procedures in Aerospace & Defense 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.

Loyalty marketing

– Heroux-Devtek Inc. 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.

Use of Bitcoin and other crypto currencies for transactions in Aerospace & Defense industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Heroux-Devtek Inc. in the Aerospace & Defense industry. Now Heroux-Devtek Inc. can target international markets with far fewer capital restrictions requirements than the existing system.

Leveraging digital technologies

– Heroux-Devtek Inc. 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.

Learning at scale

– Online learning technologies has now opened space for Heroux-Devtek Inc. 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.

Buying journey improvements

– Heroux-Devtek Inc. can improve the customer journey of consumers in the Aerospace & Defense 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.

Using analytics as competitive advantage

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

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Threats Heroux-Devtek Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Heroux-Devtek Inc. are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Heroux-Devtek Inc. 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 Heroux-Devtek Inc. prominent markets.

Stagnating economy with rate increase

– Heroux-Devtek Inc. 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 Aerospace & Defense industry.

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. Heroux-Devtek Inc. 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.

Regulatory challenges

– Heroux-Devtek Inc. 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 Aerospace & Defense industry regulations.

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 Heroux-Devtek Inc. in the Aerospace & Defense sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Heroux-Devtek Inc. has witnessed rapid integration of technology during Covid-19 in the Aerospace & Defense industry. As one of the leading players in the industry, Heroux-Devtek Inc. needs to keep up with the evolution of technology in the Aerospace & Defense 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.

Environmental challenges

– Heroux-Devtek Inc. 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. Heroux-Devtek Inc. can take advantage of this fund but it will also bring new competitors in the Aerospace & Defense industry.

Increasing wage structure of Heroux-Devtek Inc.

– 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 Heroux-Devtek Inc..

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. Heroux-Devtek Inc. needs to understand the core reasons impacting the Aerospace & Defense industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that Heroux-Devtek Inc. is facing in Aerospace & Defense sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Heroux-Devtek Inc. may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Aerospace & Defense sector.

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.

Easy access to finance

– Easy access to finance in Aerospace & Defense industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Heroux-Devtek Inc. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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Weighted SWOT Analysis of Heroux-Devtek Inc. Template, Example

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

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