SWOT Analysis / TOWS Matrix for MacDonald Dettwiler (United States)
Based on various researches at Oak Spring University , MacDonald Dettwiler is operating in a macro-environment that has been destablized by – increasing energy prices, technology disruption, geopolitical disruptions, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of MacDonald Dettwiler
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that MacDonald Dettwiler can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the MacDonald Dettwiler, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which MacDonald Dettwiler 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 MacDonald Dettwiler can be done for the following purposes –
1. Strategic planning of MacDonald Dettwiler
2. Improving business portfolio management of MacDonald Dettwiler
3. Assessing feasibility of the new initiative in United States
4. Making a Communications Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of MacDonald Dettwiler
Strengths of MacDonald Dettwiler | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of MacDonald Dettwiler are -
Learning organization
- MacDonald Dettwiler 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 MacDonald Dettwiler is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at MacDonald Dettwiler emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Communications Equipment industry
– MacDonald Dettwiler is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– MacDonald Dettwiler is one of the leading players in the Communications Equipment industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the MacDonald Dettwiler 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.
High brand equity
– MacDonald Dettwiler has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled MacDonald Dettwiler to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– MacDonald Dettwiler has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – MacDonald Dettwiler 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.
Organizational Resilience of MacDonald Dettwiler
– The covid-19 pandemic has put organizational resilience at the centre of everthing MacDonald Dettwiler does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– MacDonald Dettwiler 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.
Diverse revenue streams
– MacDonald Dettwiler is present in almost all the verticals within the Communications Equipment industry. This has provided MacDonald Dettwiler 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.
Superior customer experience
– The customer experience strategy of MacDonald Dettwiler in Communications Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– MacDonald Dettwiler 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 MacDonald Dettwiler have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Communications Equipment
– MacDonald Dettwiler is one of the leading players in the Communications Equipment industry in United States. Over the years it has not only transformed the business landscape in the Communications Equipment industry in United States but also across the existing markets. The ability to lead change has enabled MacDonald Dettwiler in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of MacDonald Dettwiler | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of MacDonald Dettwiler are -
Products dominated business model
– Even though MacDonald Dettwiler 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. MacDonald Dettwiler should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Communications Equipment industry
– because of the regulatory requirements in United States, MacDonald Dettwiler 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.
Need for greater diversity
– MacDonald Dettwiler 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 MacDonald Dettwiler products
– To increase the profitability and margins on the products, MacDonald Dettwiler needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
MacDonald Dettwiler has a high cash cycle compare to other players in the Communications Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of United States, MacDonald Dettwiler needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on MacDonald Dettwiler ‘s star products
– The top 2 products and services of MacDonald Dettwiler 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 MacDonald Dettwiler has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, MacDonald Dettwiler is slow explore the new channels of communication. These new channels of communication can help MacDonald Dettwiler to provide better information regarding Communications Equipment products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, MacDonald Dettwiler 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 MacDonald Dettwiler lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of MacDonald Dettwiler, 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.
Capital Spending Reduction
– Even during the low interest decade, MacDonald Dettwiler 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 Communications Equipment industry using digital technology.
MacDonald Dettwiler Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of MacDonald Dettwiler 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. MacDonald Dettwiler can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of MacDonald Dettwiler has opened avenues for new revenue streams for the organization in Communications Equipment industry. This can help MacDonald Dettwiler to build a more holistic ecosystem for MacDonald Dettwiler products in the Communications Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, MacDonald Dettwiler can use these opportunities to build new business models that can help the communities that MacDonald Dettwiler operates in. Secondly it can use opportunities from government spending in Communications Equipment sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects MacDonald Dettwiler can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 MacDonald Dettwiler in the Communications Equipment industry. Now MacDonald Dettwiler can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– MacDonald Dettwiler 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 MacDonald Dettwiler 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
– MacDonald Dettwiler 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.
Using analytics as competitive advantage
– MacDonald Dettwiler 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 MacDonald Dettwiler to build a competitive advantage using analytics. The analytics driven competitive advantage can help MacDonald Dettwiler 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 MacDonald Dettwiler 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 Communications Equipment industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, MacDonald Dettwiler 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, MacDonald Dettwiler is facing challenges because of the dominance of functional experts in the organization. MacDonald Dettwiler 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, MacDonald Dettwiler 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 MacDonald Dettwiler to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats MacDonald Dettwiler External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of MacDonald Dettwiler are -
Consumer confidence and its impact on MacDonald Dettwiler 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.
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 MacDonald Dettwiler.
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. MacDonald Dettwiler needs to understand the core reasons impacting the Communications Equipment industry. This will help it in building a better workplace.
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. MacDonald Dettwiler 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for MacDonald Dettwiler 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.
Technology acceleration in Forth Industrial Revolution
– MacDonald Dettwiler has witnessed rapid integration of technology during Covid-19 in the Communications Equipment industry. As one of the leading players in the industry, MacDonald Dettwiler 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 MacDonald Dettwiler with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Equipment sector.
Regulatory challenges
– MacDonald Dettwiler 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 Communications Equipment industry regulations.
Environmental challenges
– MacDonald Dettwiler 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. MacDonald Dettwiler can take advantage of this fund but it will also bring new competitors in the Communications Equipment industry.
Increasing wage structure of MacDonald Dettwiler
– 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 MacDonald Dettwiler.
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 MacDonald Dettwiler 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.
Stagnating economy with rate increase
– MacDonald Dettwiler 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.
Weighted SWOT Analysis of MacDonald Dettwiler Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at MacDonald Dettwiler 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 MacDonald Dettwiler 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 MacDonald Dettwiler 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 MacDonald Dettwiler 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 MacDonald Dettwiler needs to make to build a sustainable competitive advantage.