Vecima Networks Inc. (VCM) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Vecima Networks Inc. (Canada)

Based on various researches at Oak Spring University , Vecima Networks Inc. is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing energy prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing commodity prices, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of Vecima Networks Inc.

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

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Strengths of Vecima Networks Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Vecima Networks Inc. are -

Learning organization

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

Successful track record of launching new products

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

Cross disciplinary teams

– Horizontal connected teams at the Vecima Networks 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.

Ability to recruit top talent

– Vecima Networks Inc. is one of the leading players in the Communications Equipment industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.

Strong track record of project management in the Communications Equipment industry

– Vecima Networks 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.

Low bargaining power of suppliers

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

Sustainable margins compare to other players in Communications Equipment industry

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

Diverse revenue streams

– Vecima Networks Inc. is present in almost all the verticals within the Communications Equipment industry. This has provided Vecima Networks Inc. 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.

Innovation driven organization

– Vecima Networks Inc. is one of the most innovative firm in Communications Equipment sector.

Training and development

– Vecima Networks Inc. has one of the best training and development program in Technology 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.

Effective Research and Development (R&D)

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

Ability to lead change in Communications Equipment

– Vecima Networks Inc. is one of the leading players in the Communications Equipment industry in Canada. Over the years it has not only transformed the business landscape in the Communications Equipment industry in Canada but also across the existing markets. The ability to lead change has enabled Vecima Networks Inc. in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses of Vecima Networks Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Vecima Networks Inc. are -

Workers concerns about automation

– As automation is fast increasing in the Communications Equipment industry, Vecima Networks 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.

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

Slow decision making process

– As mentioned earlier in the report, Vecima Networks 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 Communications Equipment industry over the last five years. Vecima Networks 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.

Ability to respond to the competition

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

Products dominated business model

– Even though Vecima Networks Inc. has some of the most successful models in the Communications Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Vecima Networks Inc. should strive to include more intangible value offerings along with its core products and services.

High operating costs

– Compare to the competitors, Vecima Networks Inc. has high operating costs in the Communications Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Vecima Networks Inc. lucrative customers.

Compensation and incentives

– The revenue per employee of Vecima Networks Inc. is just above the Communications Equipment 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.

Low market penetration in new markets

– Outside its home market of Canada, Vecima Networks Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Interest costs

– Compare to the competition, Vecima Networks Inc. 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 dependence on Vecima Networks Inc. ‘s star products

– The top 2 products and services of Vecima Networks Inc. still accounts for major business revenue. This dependence on star products in Communications Equipment industry has resulted into insufficient focus on developing new products, even though Vecima Networks Inc. has relatively successful track record of launching new products.

Aligning sales with marketing

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

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Vecima Networks Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Vecima Networks Inc. are -

Finding new ways to collaborate

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

Developing new processes and practices

– Vecima Networks Inc. can develop new processes and procedures in Communications Equipment 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, Vecima Networks Inc. 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.

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. Vecima Networks Inc. can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Communications Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vecima Networks Inc. 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. Vecima Networks Inc. 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.

Reforming the budgeting process

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

Loyalty marketing

– Vecima Networks 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.

Redefining models of collaboration and team work

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

Use of Bitcoin and other crypto currencies for transactions in Communications Equipment industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vecima Networks Inc. in the Communications Equipment industry. Now Vecima Networks Inc. can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– Vecima Networks Inc. can improve the customer journey of consumers in the Communications Equipment 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.

Remote work and new talent hiring opportunities

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for Vecima Networks 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 Communications Equipment industry, and it will provide faster access to the consumers.

Creating value in data economy

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

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Threats Vecima Networks Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Vecima Networks Inc. are -

Consumer confidence and its impact on Vecima Networks Inc. 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 Communications Equipment industry and other sectors.

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.

Environmental challenges

– Vecima Networks 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. Vecima Networks Inc. can take advantage of this fund but it will also bring new competitors in the Communications Equipment industry.

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. Vecima Networks Inc. needs to understand the core reasons impacting the Communications Equipment industry. This will help it in building a better workplace.

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.

Barriers of entry lowering

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

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Vecima Networks Inc. in Communications Equipment industry. The Communications Equipment 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.

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 Vecima Networks Inc..

Shortening product life cycle

– it is one of the major threat that Vecima Networks Inc. is facing in Communications Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Vecima Networks 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 Vecima Networks Inc..

Technology acceleration in Forth Industrial Revolution

– Vecima Networks Inc. has witnessed rapid integration of technology during Covid-19 in the Communications Equipment industry. As one of the leading players in the industry, Vecima Networks Inc. needs to keep up with the evolution of technology in the Communications Equipment 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.

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 Vecima Networks Inc. in the Communications Equipment sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Vecima Networks 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 Communications Equipment industry.

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Weighted SWOT Analysis of Vecima Networks Inc. Template, Example

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

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