Owens-Illinois (OI) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Owens-Illinois (United States)

Based on various researches at Oak Spring University , Owens-Illinois is operating in a macro-environment that has been destablized by – increasing energy prices, central banks are concerned over increasing inflation, increasing commodity prices, geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of Owens-Illinois

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

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Strengths of Owens-Illinois | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Owens-Illinois are -

Analytics focus

– Owens-Illinois 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 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.

Sustainable margins compare to other players in Containers & Packaging industry

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

Operational resilience

– The operational resilience strategy of Owens-Illinois comprises – understanding the underlying the factors in the Containers & Packaging industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Strong track record of project management in the Containers & Packaging industry

– Owens-Illinois 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 lead change in Containers & Packaging

– Owens-Illinois is one of the leading players in the Containers & Packaging industry in United States. Over the years it has not only transformed the business landscape in the Containers & Packaging industry in United States but also across the existing markets. The ability to lead change has enabled Owens-Illinois in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– Owens-Illinois is one of the leading players in the Containers & Packaging 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.

Successful track record of launching new products

– Owens-Illinois has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Owens-Illinois 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

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

Innovation driven organization

– Owens-Illinois is one of the most innovative firm in Containers & Packaging sector.

Superior customer experience

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

Cross disciplinary teams

– Horizontal connected teams at the Owens-Illinois 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

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

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Weaknesses of Owens-Illinois | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Owens-Illinois are -

Slow decision making process

– As mentioned earlier in the report, Owens-Illinois has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. Owens-Illinois 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.

Interest costs

– Compare to the competition, Owens-Illinois 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.

Need for greater diversity

– Owens-Illinois 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.

Low market penetration in new markets

– Outside its home market of United States, Owens-Illinois needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Ability to respond to the competition

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

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Owens-Illinois is slow explore the new channels of communication. These new channels of communication can help Owens-Illinois to provide better information regarding Containers & Packaging products and services. It can also build an online community to further reach out to potential customers.

High bargaining power of channel partners in Containers & Packaging industry

– because of the regulatory requirements in United States, Owens-Illinois 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.

Products dominated business model

– Even though Owens-Illinois 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. Owens-Illinois should strive to include more intangible value offerings along with its core products and services.

Compensation and incentives

– The revenue per employee of Owens-Illinois is just above the Containers & Packaging 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.

Increasing silos among functional specialists

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

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

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Owens-Illinois Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Owens-Illinois are -

Building a culture of innovation

– managers at Owens-Illinois 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.

Remote work and new talent hiring opportunities

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

Learning at scale

– Online learning technologies has now opened space for Owens-Illinois 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.

Using analytics as competitive advantage

– Owens-Illinois 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 Owens-Illinois to build a competitive advantage using analytics. The analytics driven competitive advantage can help Owens-Illinois to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Developing new processes and practices

– Owens-Illinois can develop new processes and procedures in Containers & Packaging 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.

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 Owens-Illinois 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.

Finding new ways to collaborate

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

Loyalty marketing

– Owens-Illinois 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.

Harnessing reconfiguration of the global supply chains

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

Creating value in data economy

– The success of analytics program of Owens-Illinois has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help Owens-Illinois to build a more holistic ecosystem for Owens-Illinois products in the Containers & Packaging 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, Owens-Illinois can use these opportunities to build new business models that can help the communities that Owens-Illinois operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.

Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Owens-Illinois in the Containers & Packaging industry. Now Owens-Illinois can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– Owens-Illinois 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.

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Threats Owens-Illinois External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Owens-Illinois are -

Regulatory challenges

– Owens-Illinois 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.

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 Owens-Illinois in the Containers & Packaging sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Owens-Illinois 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.

Stagnating economy with rate increase

– Owens-Illinois 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 Containers & Packaging industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Owens-Illinois 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.

Consumer confidence and its impact on Owens-Illinois 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.

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. Owens-Illinois 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.

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.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Environmental challenges

– Owens-Illinois 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. Owens-Illinois can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.

Shortening product life cycle

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

High dependence on third party suppliers

– Owens-Illinois 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.

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. Owens-Illinois can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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Weighted SWOT Analysis of Owens-Illinois Template, Example

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

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