SWOT Analysis / TOWS Matrix for Mechanical Technolgy (United States)
Based on various researches at Oak Spring University , Mechanical Technolgy is operating in a macro-environment that has been destablized by – technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, wage bills are increasing,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Mechanical Technolgy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mechanical Technolgy can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mechanical Technolgy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mechanical Technolgy 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 Mechanical Technolgy can be done for the following purposes –
1. Strategic planning of Mechanical Technolgy
2. Improving business portfolio management of Mechanical Technolgy
3. Assessing feasibility of the new initiative in United States
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mechanical Technolgy
Strengths of Mechanical Technolgy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mechanical Technolgy are -
Diverse revenue streams
– Mechanical Technolgy is present in almost all the verticals within the Scientific & Technical Instr. industry. This has provided Mechanical Technolgy 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.
High brand equity
– Mechanical Technolgy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mechanical Technolgy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Mechanical Technolgy is one of the leading players in the Scientific & Technical Instr. 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.
Innovation driven organization
– Mechanical Technolgy is one of the most innovative firm in Scientific & Technical Instr. sector.
Effective Research and Development (R&D)
– Mechanical Technolgy has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mechanical Technolgy staying ahead in the Scientific & Technical Instr. 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 Scientific & Technical Instr.
– Mechanical Technolgy is one of the leading players in the Scientific & Technical Instr. industry in United States. Over the years it has not only transformed the business landscape in the Scientific & Technical Instr. industry in United States but also across the existing markets. The ability to lead change has enabled Mechanical Technolgy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Mechanical Technolgy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mechanical Technolgy 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.
Learning organization
- Mechanical Technolgy 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 Mechanical Technolgy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Mechanical Technolgy emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– Mechanical Technolgy has clearly differentiated products in the market place. This has enabled Mechanical Technolgy to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Mechanical Technolgy to invest into research and development (R&D) and innovation.
Training and development
– Mechanical Technolgy 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.
Analytics focus
– Mechanical Technolgy 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 Scientific & Technical Instr. industry. The technology infrastructure of United States 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.
Superior customer experience
– The customer experience strategy of Mechanical Technolgy in Scientific & Technical Instr. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Mechanical Technolgy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mechanical Technolgy are -
Slow to strategic competitive environment developments
– As Mechanical Technolgy is one of the leading players in the Scientific & Technical Instr. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Scientific & Technical Instr. industry in last five years.
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 Mechanical Technolgy supply chain. Even after few cautionary changes, Mechanical Technolgy is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mechanical Technolgy vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Mechanical Technolgy 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.
Aligning sales with marketing
– From the outside it seems that Mechanical Technolgy needs to have more collaboration between its sales team and marketing team. Sales professionals in the Scientific & Technical Instr. industry have deep experience in developing customer relationships. Marketing department at Mechanical Technolgy can leverage the sales team experience to cultivate customer relationships as Mechanical Technolgy is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Mechanical Technolgy has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Scientific & Technical Instr. industry over the last five years. Mechanical Technolgy 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.
Increasing silos among functional specialists
– The organizational structure of Mechanical Technolgy is dominated by functional specialists. It is not different from other players in the Scientific & Technical Instr. industry, but Mechanical Technolgy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mechanical Technolgy to focus more on services in the Scientific & Technical Instr. industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Mechanical Technolgy, it seems that company is thinking out the frontier risks that can impact Scientific & Technical Instr. 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.
Lack of clear differentiation of Mechanical Technolgy products
– To increase the profitability and margins on the products, Mechanical Technolgy needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Mechanical Technolgy 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.
High dependence on Mechanical Technolgy ‘s star products
– The top 2 products and services of Mechanical Technolgy still accounts for major business revenue. This dependence on star products in Scientific & Technical Instr. industry has resulted into insufficient focus on developing new products, even though Mechanical Technolgy has relatively successful track record of launching new products.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in United States, Mechanical Technolgy 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 Scientific & Technical Instr. industry.
Mechanical Technolgy Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mechanical Technolgy are -
Loyalty marketing
– Mechanical Technolgy 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Scientific & Technical Instr. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mechanical Technolgy 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. Mechanical Technolgy 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.
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 Mechanical Technolgy 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.
Learning at scale
– Online learning technologies has now opened space for Mechanical Technolgy 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.
Building a culture of innovation
– managers at Mechanical Technolgy 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 Scientific & Technical Instr. industry.
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. Mechanical Technolgy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Mechanical Technolgy can use the latest technology developments to improve its manufacturing and designing process in Scientific & Technical Instr. 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.
Creating value in data economy
– The success of analytics program of Mechanical Technolgy has opened avenues for new revenue streams for the organization in Scientific & Technical Instr. industry. This can help Mechanical Technolgy to build a more holistic ecosystem for Mechanical Technolgy products in the Scientific & Technical Instr. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mechanical Technolgy 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 Mechanical Technolgy to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Mechanical Technolgy can develop new processes and procedures in Scientific & Technical Instr. 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mechanical Technolgy can use these opportunities to build new business models that can help the communities that Mechanical Technolgy operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mechanical Technolgy 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
– Mechanical Technolgy has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Scientific & Technical Instr. sector. This continuous investment in analytics has enabled Mechanical Technolgy to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mechanical Technolgy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Mechanical Technolgy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mechanical Technolgy are -
Technology acceleration in Forth Industrial Revolution
– Mechanical Technolgy has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Mechanical Technolgy needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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.
Regulatory challenges
– Mechanical Technolgy 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 Scientific & Technical Instr. industry regulations.
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 Mechanical Technolgy business can come under increasing regulations regarding data privacy, data security, 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.
Consumer confidence and its impact on Mechanical Technolgy 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 Scientific & Technical Instr. industry and other sectors.
Easy access to finance
– Easy access to finance in Scientific & Technical Instr. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mechanical Technolgy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Scientific & Technical Instr. industry are lowering. It can presents Mechanical Technolgy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Scientific & Technical Instr. sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mechanical Technolgy in Scientific & Technical Instr. industry. The Scientific & Technical Instr. 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 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.
Stagnating economy with rate increase
– Mechanical Technolgy 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 Scientific & Technical Instr. industry.
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 Mechanical Technolgy.
Increasing wage structure of Mechanical Technolgy
– 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 Mechanical Technolgy.
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. Mechanical Technolgy 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.
Weighted SWOT Analysis of Mechanical Technolgy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mechanical Technolgy 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 Mechanical Technolgy 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 Mechanical Technolgy 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 Mechanical Technolgy 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 Mechanical Technolgy needs to make to build a sustainable competitive advantage.