SWOT Analysis / TOWS Matrix for iRhythm Tech (United States)
Based on various researches at Oak Spring University , iRhythm Tech is operating in a macro-environment that has been destablized by – technology disruption, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that iRhythm Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the iRhythm Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which iRhythm Tech 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 iRhythm Tech can be done for the following purposes –
1. Strategic planning of iRhythm Tech
2. Improving business portfolio management of iRhythm Tech
3. Assessing feasibility of the new initiative in United States
4. Making a Healthcare Facilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of iRhythm Tech
Strengths of iRhythm Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of iRhythm Tech are -
High switching costs
– The high switching costs that iRhythm Tech 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.
High brand equity
– iRhythm Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled iRhythm Tech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Healthcare Facilities industry
- digital transformation varies from industry to industry. For iRhythm Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. iRhythm Tech 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.
Highly skilled collaborators
– iRhythm Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Healthcare Facilities industry. Secondly the value chain collaborators of iRhythm Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– iRhythm Tech is one of the most innovative firm in Healthcare Facilities sector.
Low bargaining power of suppliers
– Suppliers of iRhythm Tech in the Healthcare sector have low bargaining power. iRhythm Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps iRhythm Tech to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- iRhythm Tech 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 iRhythm Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at iRhythm Tech emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of iRhythm Tech in Healthcare Facilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– iRhythm Tech has one of the best training and development program in Healthcare 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.
Successful track record of launching new products
– iRhythm Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. iRhythm Tech 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.
Diverse revenue streams
– iRhythm Tech is present in almost all the verticals within the Healthcare Facilities industry. This has provided iRhythm Tech 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.
Ability to lead change in Healthcare Facilities
– iRhythm Tech is one of the leading players in the Healthcare Facilities industry in United States. Over the years it has not only transformed the business landscape in the Healthcare Facilities industry in United States but also across the existing markets. The ability to lead change has enabled iRhythm Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of iRhythm Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of iRhythm Tech 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 iRhythm Tech supply chain. Even after few cautionary changes, iRhythm Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left iRhythm Tech vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Healthcare Facilities industry, iRhythm Tech 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.
Employees’ less understanding of iRhythm Tech strategy
– From the outside it seems that the employees of iRhythm Tech 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.
Capital Spending Reduction
– Even during the low interest decade, iRhythm Tech 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 Healthcare Facilities industry using digital technology.
High operating costs
– Compare to the competitors, iRhythm Tech has high operating costs in the Healthcare Facilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract iRhythm Tech lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, iRhythm Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of iRhythm Tech is just above the Healthcare Facilities 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.
Products dominated business model
– Even though iRhythm Tech has some of the most successful models in the Healthcare Facilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. iRhythm Tech should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As iRhythm Tech is one of the leading players in the Healthcare Facilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Healthcare Facilities industry in last five years.
Interest costs
– Compare to the competition, iRhythm Tech 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.
High cash cycle compare to competitors
iRhythm Tech has a high cash cycle compare to other players in the Healthcare Facilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
iRhythm Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of iRhythm Tech 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. iRhythm Tech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– iRhythm Tech 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
– iRhythm Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Healthcare Facilities sector. This continuous investment in analytics has enabled iRhythm Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help iRhythm Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help iRhythm Tech to increase its market reach. iRhythm Tech 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects iRhythm Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for iRhythm Tech 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 iRhythm Tech to hire the very best people irrespective of their geographical location.
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 iRhythm Tech 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.
Manufacturing automation
– iRhythm Tech can use the latest technology developments to improve its manufacturing and designing process in Healthcare Facilities 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.
Buying journey improvements
– iRhythm Tech can improve the customer journey of consumers in the Healthcare Facilities 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, iRhythm Tech 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 iRhythm Tech to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Healthcare Facilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. iRhythm Tech 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. iRhythm Tech 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for iRhythm Tech in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Healthcare Facilities industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, iRhythm Tech can use these opportunities to build new business models that can help the communities that iRhythm Tech operates in. Secondly it can use opportunities from government spending in Healthcare Facilities sector.
Threats iRhythm Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of iRhythm Tech are -
Environmental challenges
– iRhythm Tech 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. iRhythm Tech can take advantage of this fund but it will also bring new competitors in the Healthcare Facilities industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, iRhythm Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Healthcare Facilities sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for iRhythm Tech in Healthcare Facilities industry. The Healthcare Facilities industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High dependence on third party suppliers
– iRhythm Tech high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that iRhythm Tech is facing in Healthcare Facilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of iRhythm Tech
– 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 iRhythm Tech.
Consumer confidence and its impact on iRhythm Tech 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 Healthcare Facilities industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, iRhythm Tech 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 iRhythm Tech prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Healthcare Facilities industry are lowering. It can presents iRhythm Tech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Healthcare Facilities 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.
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. iRhythm Tech needs to understand the core reasons impacting the Healthcare Facilities industry. This will help it in building a better workplace.
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 iRhythm Tech business can come under increasing regulations regarding data privacy, data security, etc.
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 iRhythm Tech in the Healthcare Facilities sector and impact the bottomline of the organization.
Weighted SWOT Analysis of iRhythm Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at iRhythm Tech 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 iRhythm Tech 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 iRhythm Tech 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 iRhythm Tech 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 iRhythm Tech needs to make to build a sustainable competitive advantage.