ZCL Composites Inc. (ZCL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for ZCL Composites Inc. (Canada)

Based on various researches at Oak Spring University , ZCL Composites Inc. is operating in a macro-environment that has been destablized by – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of ZCL Composites Inc.

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

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

The strengths of ZCL Composites Inc. are -

Sustainable margins compare to other players in Containers & Packaging industry

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

Learning organization

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

Organizational Resilience of ZCL Composites Inc.

– The covid-19 pandemic has put organizational resilience at the centre of everthing ZCL Composites Inc. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Analytics focus

– ZCL Composites 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 Containers & Packaging 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.

High switching costs

– The high switching costs that ZCL Composites Inc. 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.

Successful track record of launching new products

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

Innovation driven organization

– ZCL Composites Inc. is one of the most innovative firm in Containers & Packaging sector.

Low bargaining power of suppliers

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

Superior customer experience

– The customer experience strategy of ZCL Composites Inc. in Containers & Packaging industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Containers & Packaging industry

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

Highly skilled collaborators

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

Cross disciplinary teams

– Horizontal connected teams at the ZCL Composites 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.

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

The weaknesses of ZCL Composites Inc. are -

Aligning sales with marketing

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

Interest costs

– Compare to the competition, ZCL Composites 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.

Ability to respond to the competition

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

Capital Spending Reduction

– Even during the low interest decade, ZCL Composites Inc. 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 Containers & Packaging industry using digital technology.

Workers concerns about automation

– As automation is fast increasing in the Containers & Packaging industry, ZCL Composites 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.

Increasing silos among functional specialists

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

Low market penetration in new markets

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

Products dominated business model

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

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

High bargaining power of channel partners in Containers & Packaging industry

– because of the regulatory requirements in Canada, ZCL Composites 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 Containers & Packaging industry.

Lack of clear differentiation of ZCL Composites Inc. products

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

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

The opportunities of ZCL Composites Inc. are -

Manufacturing automation

– ZCL Composites Inc. can use the latest technology developments to improve its manufacturing and designing process in Containers & Packaging 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

– ZCL Composites Inc. can improve the customer journey of consumers in the Containers & Packaging 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.

Loyalty marketing

– ZCL Composites 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for ZCL Composites 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 Containers & Packaging industry, and it will provide faster access to the consumers.

Using analytics as competitive advantage

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

Building a culture of innovation

– managers at ZCL Composites Inc. 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 Containers & Packaging industry.

Creating value in data economy

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

Redefining models of collaboration and team work

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

Learning at scale

– Online learning technologies has now opened space for ZCL Composites Inc. 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.

Reforming the budgeting process

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

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. ZCL Composites Inc. can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

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

Leveraging digital technologies

– ZCL Composites 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.

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

The threats of ZCL Composites Inc. are -

Consumer confidence and its impact on ZCL Composites 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 Containers & Packaging industry and other sectors.

Shortening product life cycle

– it is one of the major threat that ZCL Composites Inc. is facing in Containers & Packaging sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for ZCL Composites Inc. in Containers & Packaging industry. The Containers & Packaging 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.

Regulatory challenges

– ZCL Composites Inc. 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 Containers & Packaging industry regulations.

Barriers of entry lowering

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

Easy access to finance

– Easy access to finance in Containers & Packaging industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. ZCL Composites Inc. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, ZCL Composites 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 Containers & Packaging sector.

High dependence on third party suppliers

– ZCL Composites 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.

Technology acceleration in Forth Industrial Revolution

– ZCL Composites Inc. has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, ZCL Composites Inc. needs to keep up with the evolution of technology in the Containers & Packaging 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.

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. ZCL Composites 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.

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 ZCL Composites Inc..

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.

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Weighted SWOT Analysis of ZCL Composites Inc. Template, Example

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

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