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, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing transportation and logistics costs, technology disruption, there is increasing trade war between United States & China, 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 -

Analytics focus

– Vecima Networks Inc. is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Communications Equipment industry. The technology infrastructure of Canada is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

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.

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.

Highly skilled collaborators

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

High brand equity

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

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.

Digital Transformation in Communications Equipment industry

- digital transformation varies from industry to industry. For Vecima Networks Inc. digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vecima Networks Inc. 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.

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.

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.

Superior customer experience

– The customer experience strategy of Vecima Networks Inc. in Communications Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

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

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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.

Need for greater diversity

– Vecima Networks Inc. has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Lack of clear differentiation of Vecima Networks Inc. products

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

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.

Increasing silos among functional specialists

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

High bargaining power of channel partners in Communications Equipment industry

– because of the regulatory requirements in Canada, Vecima Networks Inc. 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 Communications Equipment industry.

No frontier risks strategy

– From the 10K / annual statement of Vecima Networks Inc., it seems that company is thinking out the frontier risks that can impact Communications Equipment 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.

Slow to harness new channels of communication

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

Employees’ less understanding of Vecima Networks Inc. strategy

– From the outside it seems that the employees of Vecima Networks Inc. 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.

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.

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.

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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 -

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.

Harnessing reconfiguration of the global supply chains

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

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.

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.

Better consumer reach

– The expansion of the 5G network will help Vecima Networks Inc. to increase its market reach. Vecima Networks Inc. 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.

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.

Leveraging digital technologies

– Vecima Networks Inc. 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.

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.

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 Vecima Networks Inc. 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.

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.

Using analytics as competitive advantage

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Vecima Networks Inc. can use these opportunities to build new business models that can help the communities that Vecima Networks Inc. operates in. Secondly it can use opportunities from government spending in Communications Equipment sector.

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.

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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 -

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. Vecima Networks Inc. 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.

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.

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..

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 Vecima Networks Inc. business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Vecima Networks Inc. 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 Vecima Networks Inc. prominent markets.

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.

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 dependence on third party suppliers

– Vecima Networks Inc. 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.

Learning curve for new practices

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

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.

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.

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.

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.

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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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