InnerWorkings (INWK) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for InnerWorkings (United States)

Based on various researches at Oak Spring University , InnerWorkings is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, technology disruption, there is backlash against globalization, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc

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Introduction to SWOT Analysis of InnerWorkings

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

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

The strengths of InnerWorkings are -

Successful track record of launching new products

– InnerWorkings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. InnerWorkings 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.

Learning organization

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

Low bargaining power of suppliers

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

Ability to lead change in Printing Services

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

Diverse revenue streams

– InnerWorkings is present in almost all the verticals within the Printing Services industry. This has provided InnerWorkings 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.

High switching costs

– The high switching costs that InnerWorkings 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

– InnerWorkings has one of the best training and development program in Services 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.

Ability to recruit top talent

– InnerWorkings is one of the leading players in the Printing 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.

Effective Research and Development (R&D)

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

Cross disciplinary teams

– Horizontal connected teams at the InnerWorkings 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.

Superior customer experience

– The customer experience strategy of InnerWorkings in Printing Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Highly skilled collaborators

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

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

The weaknesses of InnerWorkings are -

Ability to respond to the competition

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

Compensation and incentives

– The revenue per employee of InnerWorkings is just above the Printing 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.

Increasing silos among functional specialists

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

Aligning sales with marketing

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

High bargaining power of channel partners in Printing Services industry

– because of the regulatory requirements in United States, InnerWorkings is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Printing Services industry.

Workers concerns about automation

– As automation is fast increasing in the Printing Services industry, InnerWorkings 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.

Lack of clear differentiation of InnerWorkings products

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

High cash cycle compare to competitors

InnerWorkings has a high cash cycle compare to other players in the Printing 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.

Slow to harness new channels of communication

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

Interest costs

– Compare to the competition, InnerWorkings 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.

Low market penetration in new markets

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

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

The opportunities of InnerWorkings are -

Manufacturing automation

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

Reforming the budgeting process

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

Redefining models of collaboration and team work

– As explained in the weaknesses section, InnerWorkings is facing challenges because of the dominance of functional experts in the organization. InnerWorkings can utilize new technology in the field of Printing Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Loyalty marketing

– InnerWorkings 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.

Leveraging digital technologies

– InnerWorkings 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.

Developing new processes and practices

– InnerWorkings can develop new processes and procedures in Printing 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, InnerWorkings 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.

Using analytics as competitive advantage

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

Creating value in data economy

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

Changes in consumer behavior post Covid-19

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

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for InnerWorkings 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 InnerWorkings to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

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

Finding new ways to collaborate

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

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

The threats of InnerWorkings are -

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 InnerWorkings in the Printing Services sector and impact the bottomline of the organization.

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

Technology acceleration in Forth Industrial Revolution

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

Increasing wage structure of InnerWorkings

– 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 InnerWorkings.

Trade war between China and United States

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

Barriers of entry lowering

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

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. InnerWorkings needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that InnerWorkings is facing in Printing 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 Printing Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. InnerWorkings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing international competition and downward pressure on margins

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

Learning curve for new practices

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

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

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.

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Weighted SWOT Analysis of InnerWorkings Template, Example

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

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