Optex Systems Holdings (OPXS) SWOT Analysis / TOWS Matrix / MBA Resources
Scientific & Technical Instr.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Optex Systems Holdings (United States)
Based on various researches at Oak Spring University , Optex Systems Holdings is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing household debt because of falling income levels, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing commodity prices, cloud computing is disrupting traditional business models,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Optex Systems Holdings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Optex Systems Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Optex Systems Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Optex Systems Holdings 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 Optex Systems Holdings can be done for the following purposes –
1. Strategic planning of Optex Systems Holdings
2. Improving business portfolio management of Optex Systems Holdings
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 Optex Systems Holdings
Strengths of Optex Systems Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Optex Systems Holdings are -
Digital Transformation in Scientific & Technical Instr. industry
- digital transformation varies from industry to industry. For Optex Systems Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Optex Systems Holdings 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.
- Optex Systems Holdings 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 Optex Systems Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Optex Systems Holdings emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– Optex Systems Holdings has clearly differentiated products in the market place. This has enabled Optex Systems Holdings to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Optex Systems Holdings to invest into research and development (R&D) and innovation.
High brand equity
– Optex Systems Holdings has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Optex Systems Holdings to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Optex Systems Holdings in Scientific & Technical Instr. 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 Optex Systems Holdings 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.
Ability to lead change in Scientific & Technical Instr.
– Optex Systems Holdings 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 Optex Systems Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Optex Systems Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing Optex Systems Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Optex Systems Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Optex Systems Holdings 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.
Strong track record of project management in the Scientific & Technical Instr. industry
– Optex Systems Holdings is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Optex Systems Holdings 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.
– Optex Systems Holdings 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.
Weaknesses of Optex Systems Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Optex Systems Holdings are -
Ability to respond to the competition
– As the decision making is very deliberative at Optex Systems Holdings, in the dynamic environment of Scientific & Technical Instr. industry it has struggled to respond to the nimble upstart competition. Optex Systems Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Optex Systems Holdings has some of the most successful models in the Scientific & Technical Instr. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Optex Systems Holdings should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Optex Systems Holdings is slow explore the new channels of communication. These new channels of communication can help Optex Systems Holdings to provide better information regarding Scientific & Technical Instr. products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Optex Systems Holdings is dominated by functional specialists. It is not different from other players in the Scientific & Technical Instr. industry, but Optex Systems Holdings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Optex Systems Holdings to focus more on services in the Scientific & Technical Instr. industry rather than just following the product oriented approach.
Employees’ less understanding of Optex Systems Holdings strategy
– From the outside it seems that the employees of Optex Systems Holdings don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High cash cycle compare to competitors
Optex Systems Holdings has a high cash cycle compare to other players in the Scientific & Technical Instr. 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, Optex Systems Holdings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Optex Systems Holdings, 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.
Compensation and incentives
– The revenue per employee of Optex Systems Holdings is just above the Scientific & Technical Instr. 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.
High dependence on Optex Systems Holdings ‘s star products
– The top 2 products and services of Optex Systems Holdings 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 Optex Systems Holdings has relatively successful track record of launching new products.
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 Optex Systems Holdings supply chain. Even after few cautionary changes, Optex Systems Holdings is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Optex Systems Holdings vulnerable to further global disruptions in South East Asia.
Optex Systems Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Optex Systems Holdings are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Optex Systems Holdings 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 Optex Systems Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Optex Systems Holdings to increase its market reach. Optex Systems Holdings will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
– Optex Systems Holdings 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. Optex Systems Holdings 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. Optex Systems Holdings 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Optex Systems Holdings 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Optex Systems Holdings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Scientific & Technical Instr. industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Optex Systems Holdings is facing challenges because of the dominance of functional experts in the organization. Optex Systems Holdings can utilize new technology in the field of Scientific & Technical Instr. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Scientific & Technical Instr. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Optex Systems Holdings in the Scientific & Technical Instr. industry. Now Optex Systems Holdings can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Optex Systems Holdings 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 Optex Systems Holdings to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Optex Systems Holdings can improve the customer journey of consumers in the Scientific & Technical Instr. 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Scientific & Technical Instr. industry, but it has also influenced the consumer preferences. Optex Systems Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Optex Systems Holdings 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, Optex Systems Holdings can use these opportunities to build new business models that can help the communities that Optex Systems Holdings operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Threats Optex Systems Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Optex Systems Holdings are -
– Optex Systems Holdings 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. Optex Systems Holdings can take advantage of this fund but it will also bring new competitors in the Scientific & Technical Instr. industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Scientific & Technical Instr. industry are lowering. It can presents Optex Systems Holdings 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.
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 Optex Systems Holdings.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Optex Systems Holdings 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.
Increasing wage structure of Optex Systems Holdings
– 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 Optex Systems Holdings.
High dependence on third party suppliers
– Optex Systems Holdings 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 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. Optex Systems Holdings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Optex Systems Holdings 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.
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 Optex Systems Holdings business can come under increasing regulations regarding data privacy, data security, etc.
– Optex Systems Holdings 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.
– 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.
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. Optex Systems Holdings 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.
Technology acceleration in Forth Industrial Revolution
– Optex Systems Holdings has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Optex Systems Holdings 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.
Weighted SWOT Analysis of Optex Systems Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Optex Systems Holdings 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 Optex Systems Holdings 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 Optex Systems Holdings 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 Optex Systems Holdings 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 Optex Systems Holdings needs to make to build a sustainable competitive advantage.