SWOT Analysis / TOWS Matrix for LCI Industries (United States)
Based on various researches at Oak Spring University , LCI Industries is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
there is increasing trade war between United States & China, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that LCI Industries can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the LCI Industries, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which LCI Industries 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 LCI Industries can be done for the following purposes –
1. Strategic planning of LCI Industries
2. Improving business portfolio management of LCI Industries
3. Assessing feasibility of the new initiative in United States
4. Making a Mobile Homes & RVs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of LCI Industries
Strengths of LCI Industries | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of LCI Industries are -
Ability to lead change in Mobile Homes & RVs
– LCI Industries is one of the leading players in the Mobile Homes & RVs industry in United States. Over the years it has not only transformed the business landscape in the Mobile Homes & RVs industry in United States but also across the existing markets. The ability to lead change has enabled LCI Industries in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of LCI Industries in the Capital Goods sector have low bargaining power. LCI Industries has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps LCI Industries to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the LCI Industries 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.
Successful track record of launching new products
– LCI Industries has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. LCI Industries 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.
High switching costs
– The high switching costs that LCI Industries 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.
Organizational Resilience of LCI Industries
– The covid-19 pandemic has put organizational resilience at the centre of everthing LCI Industries does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– LCI Industries 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.
Superior customer experience
– The customer experience strategy of LCI Industries in Mobile Homes & RVs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of LCI Industries comprises – understanding the underlying the factors in the Mobile Homes & RVs 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.
Innovation driven organization
– LCI Industries is one of the most innovative firm in Mobile Homes & RVs sector.
Effective Research and Development (R&D)
– LCI Industries has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – LCI Industries staying ahead in the Mobile Homes & RVs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Mobile Homes & RVs industry
– LCI Industries is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of LCI Industries | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of LCI Industries are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, LCI Industries is slow explore the new channels of communication. These new channels of communication can help LCI Industries to provide better information regarding Mobile Homes & RVs products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of LCI Industries is just above the Mobile Homes & RVs industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Skills based hiring in Mobile Homes & RVs industry
– The stress on hiring functional specialists at LCI Industries has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on LCI Industries ‘s star products
– The top 2 products and services of LCI Industries still accounts for major business revenue. This dependence on star products in Mobile Homes & RVs industry has resulted into insufficient focus on developing new products, even though LCI Industries has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, LCI Industries has high operating costs in the Mobile Homes & RVs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract LCI Industries lucrative customers.
Lack of clear differentiation of LCI Industries products
– To increase the profitability and margins on the products, LCI Industries needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As LCI Industries is one of the leading players in the Mobile Homes & RVs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Mobile Homes & RVs industry in last five years.
Interest costs
– Compare to the competition, LCI Industries has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ less understanding of LCI Industries strategy
– From the outside it seems that the employees of LCI Industries don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners in Mobile Homes & RVs industry
– because of the regulatory requirements in United States, LCI Industries 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 Mobile Homes & RVs industry.
Slow decision making process
– As mentioned earlier in the report, LCI Industries has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Mobile Homes & RVs industry over the last five years. LCI Industries 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.
LCI Industries Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of LCI Industries are -
Buying journey improvements
– LCI Industries can improve the customer journey of consumers in the Mobile Homes & RVs 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.
Manufacturing automation
– LCI Industries can use the latest technology developments to improve its manufacturing and designing process in Mobile Homes & RVs 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.
Leveraging digital technologies
– LCI Industries 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, LCI Industries 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 LCI Industries to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at LCI Industries can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Mobile Homes & RVs industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for LCI Industries in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Mobile Homes & RVs industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, LCI Industries 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.
Learning at scale
– Online learning technologies has now opened space for LCI Industries 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.
Creating value in data economy
– The success of analytics program of LCI Industries has opened avenues for new revenue streams for the organization in Mobile Homes & RVs industry. This can help LCI Industries to build a more holistic ecosystem for LCI Industries products in the Mobile Homes & RVs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. LCI Industries can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 LCI Industries 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.
Use of Bitcoin and other crypto currencies for transactions in Mobile Homes & RVs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for LCI Industries in the Mobile Homes & RVs industry. Now LCI Industries can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Mobile Homes & RVs industry, but it has also influenced the consumer preferences. LCI Industries can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats LCI Industries External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of LCI Industries are -
Shortening product life cycle
– it is one of the major threat that LCI Industries is facing in Mobile Homes & RVs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. LCI Industries 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Mobile Homes & RVs industry are lowering. It can presents LCI Industries with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Mobile Homes & RVs sector.
Increasing wage structure of LCI Industries
– 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 LCI Industries.
Easy access to finance
– Easy access to finance in Mobile Homes & RVs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. LCI Industries can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– LCI Industries 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 Mobile Homes & RVs industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, LCI Industries 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 LCI Industries prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, LCI Industries may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Mobile Homes & RVs sector.
High dependence on third party suppliers
– LCI Industries 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.
Technology acceleration in Forth Industrial Revolution
– LCI Industries has witnessed rapid integration of technology during Covid-19 in the Mobile Homes & RVs industry. As one of the leading players in the industry, LCI Industries needs to keep up with the evolution of technology in the Mobile Homes & RVs 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.
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 LCI Industries.
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.
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. LCI Industries needs to understand the core reasons impacting the Mobile Homes & RVs industry. This will help it in building a better workplace.
Weighted SWOT Analysis of LCI Industries Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at LCI Industries 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 LCI Industries 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 LCI Industries 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 LCI Industries 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 LCI Industries needs to make to build a sustainable competitive advantage.