Lafargeholcim ADR (HCMLY) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lafargeholcim ADR (United States)

Based on various researches at Oak Spring University , Lafargeholcim ADR is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing energy prices, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Lafargeholcim ADR

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

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

The strengths of Lafargeholcim ADR are -

High brand equity

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

Superior customer experience

– The customer experience strategy of Lafargeholcim ADR in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Training and development

– Lafargeholcim ADR 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.

Highly skilled collaborators

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

Strong track record of project management in the Construction - Raw Materials industry

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

Successful track record of launching new products

– Lafargeholcim ADR has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lafargeholcim ADR has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Operational resilience

– The operational resilience strategy of Lafargeholcim ADR comprises – understanding the underlying the factors in the Construction - Raw Materials 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.

Ability to lead change in Construction - Raw Materials

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

Organizational Resilience of Lafargeholcim ADR

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

Sustainable margins compare to other players in Construction - Raw Materials industry

– Lafargeholcim ADR has clearly differentiated products in the market place. This has enabled Lafargeholcim ADR to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Lafargeholcim ADR to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

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

High switching costs

– The high switching costs that Lafargeholcim ADR 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.

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

The weaknesses of Lafargeholcim ADR are -

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 Lafargeholcim ADR supply chain. Even after few cautionary changes, Lafargeholcim ADR is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lafargeholcim ADR vulnerable to further global disruptions in South East Asia.

Low market penetration in new markets

– Outside its home market of United States, Lafargeholcim ADR needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring in Construction - Raw Materials industry

– The stress on hiring functional specialists at Lafargeholcim ADR 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, Lafargeholcim ADR 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.

Workers concerns about automation

– As automation is fast increasing in the Construction - Raw Materials industry, Lafargeholcim ADR 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.

Ability to respond to the competition

– As the decision making is very deliberative at Lafargeholcim ADR, in the dynamic environment of Construction - Raw Materials industry it has struggled to respond to the nimble upstart competition. Lafargeholcim ADR has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Employees’ less understanding of Lafargeholcim ADR strategy

– From the outside it seems that the employees of Lafargeholcim ADR 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.

Aligning sales with marketing

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

High dependence on Lafargeholcim ADR ‘s star products

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

High cash cycle compare to competitors

Lafargeholcim ADR has a high cash cycle compare to other players in the Construction - Raw Materials industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

No frontier risks strategy

– From the 10K / annual statement of Lafargeholcim ADR, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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.

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

The opportunities of Lafargeholcim ADR are -

Finding new ways to collaborate

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

Learning at scale

– Online learning technologies has now opened space for Lafargeholcim ADR 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Construction - Raw Materials industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lafargeholcim ADR 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. Lafargeholcim ADR 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Lafargeholcim ADR 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 Lafargeholcim ADR to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

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

Increase in government spending

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

Loyalty marketing

– Lafargeholcim ADR 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.

Buying journey improvements

– Lafargeholcim ADR can improve the customer journey of consumers in the Construction - Raw Materials 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

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

Use of Bitcoin and other crypto currencies for transactions in Construction - Raw Materials industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lafargeholcim ADR in the Construction - Raw Materials industry. Now Lafargeholcim ADR can target international markets with far fewer capital restrictions requirements than the existing system.

Creating value in data economy

– The success of analytics program of Lafargeholcim ADR has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Lafargeholcim ADR to build a more holistic ecosystem for Lafargeholcim ADR products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– Lafargeholcim ADR can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.

Low interest rates

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

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

The threats of Lafargeholcim ADR are -

Technology acceleration in Forth Industrial Revolution

– Lafargeholcim ADR has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Lafargeholcim ADR needs to keep up with the evolution of technology in the Construction - Raw Materials 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.

Regulatory challenges

– Lafargeholcim ADR 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 Construction - Raw Materials industry regulations.

Stagnating economy with rate increase

– Lafargeholcim ADR 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 Construction - Raw Materials industry.

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.

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. Lafargeholcim ADR 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 Lafargeholcim ADR

– 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 Lafargeholcim ADR.

Consumer confidence and its impact on Lafargeholcim ADR 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 Construction - Raw Materials industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Lafargeholcim ADR 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 - Raw Materials sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lafargeholcim ADR in Construction - Raw Materials industry. The Construction - Raw Materials 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.

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

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 Lafargeholcim ADR.

Increasing international competition and downward pressure on margins

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

Easy access to finance

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

Weighted SWOT Analysis of Lafargeholcim ADR Template, Example

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

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