RR Donnelley & Sons (RRD) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for RR Donnelley & Sons (United States)

Based on various researches at Oak Spring University , RR Donnelley & Sons is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, technology disruption, geopolitical disruptions, there is backlash against globalization, increasing commodity prices, etc

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Introduction to SWOT Analysis of RR Donnelley & Sons

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

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Strengths of RR Donnelley & Sons | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of RR Donnelley & Sons are -

Effective Research and Development (R&D)

– RR Donnelley & Sons has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – RR Donnelley & Sons staying ahead in the Printing Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management in the Printing Services industry

– RR Donnelley & Sons is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Diverse revenue streams

– RR Donnelley & Sons is present in almost all the verticals within the Printing Services industry. This has provided RR Donnelley & Sons 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.

Analytics focus

– RR Donnelley & Sons 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 Printing Services 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.

Ability to lead change in Printing Services

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

Highly skilled collaborators

– RR Donnelley & Sons has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Printing Services industry. Secondly the value chain collaborators of RR Donnelley & Sons have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of RR Donnelley & Sons in Printing Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

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

Ability to recruit top talent

– RR Donnelley & Sons is one of the leading players in the Printing Services 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.

Sustainable margins compare to other players in Printing Services industry

– RR Donnelley & Sons has clearly differentiated products in the market place. This has enabled RR Donnelley & Sons to fetch slight price premium compare to the competitors in the Printing Services industry. The sustainable margins have also helped RR Donnelley & Sons to invest into research and development (R&D) and innovation.

Digital Transformation in Printing Services industry

- digital transformation varies from industry to industry. For RR Donnelley & Sons digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. RR Donnelley & Sons 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.

Innovation driven organization

– RR Donnelley & Sons is one of the most innovative firm in Printing Services sector.

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Weaknesses of RR Donnelley & Sons | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of RR Donnelley & Sons are -

Slow decision making process

– As mentioned earlier in the report, RR Donnelley & Sons has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Printing Services industry over the last five years. RR Donnelley & Sons 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.

Capital Spending Reduction

– Even during the low interest decade, RR Donnelley & Sons 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 Printing Services industry using digital technology.

Aligning sales with marketing

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

Slow to strategic competitive environment developments

– As RR Donnelley & Sons is one of the leading players in the Printing Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Printing Services industry in last five years.

High cash cycle compare to competitors

RR Donnelley & Sons has a high cash cycle compare to other players in the Printing Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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

Ability to respond to the competition

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

Interest costs

– Compare to the competition, RR Donnelley & Sons 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.

Workers concerns about automation

– As automation is fast increasing in the Printing Services industry, RR Donnelley & Sons needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Products dominated business model

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

Increasing silos among functional specialists

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

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RR Donnelley & Sons Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of RR Donnelley & Sons are -

Finding new ways to collaborate

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

Learning at scale

– Online learning technologies has now opened space for RR Donnelley & Sons 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.

Buying journey improvements

– RR Donnelley & Sons can improve the customer journey of consumers in the Printing Services 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.

Developing new processes and practices

– RR Donnelley & Sons can develop new processes and procedures in Printing Services 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.

Use of Bitcoin and other crypto currencies for transactions in Printing Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for RR Donnelley & Sons in the Printing Services industry. Now RR Donnelley & Sons can target international markets with far fewer capital restrictions requirements than the existing system.

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. RR Donnelley & Sons can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

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

Building a culture of innovation

– managers at RR Donnelley & Sons 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 Printing Services industry.

Remote work and new talent hiring opportunities

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

Better consumer reach

– The expansion of the 5G network will help RR Donnelley & Sons to increase its market reach. RR Donnelley & Sons 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.

Redefining models of collaboration and team work

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

Creating value in data economy

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

Lowering marketing communication costs

– 5G expansion will open new opportunities for RR Donnelley & Sons in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Printing Services industry, and it will provide faster access to the consumers.

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Threats RR Donnelley & Sons External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of RR Donnelley & Sons are -

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 RR Donnelley & Sons.

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Printing Services industry are lowering. It can presents RR Donnelley & Sons with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing Services sector.

Consumer confidence and its impact on RR Donnelley & Sons 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 Printing Services 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. RR Donnelley & Sons 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.

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. RR Donnelley & Sons needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– RR Donnelley & Sons 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 Printing Services industry.

Environmental challenges

– RR Donnelley & Sons 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. RR Donnelley & Sons can take advantage of this fund but it will also bring new competitors in the Printing Services industry.

Easy access to finance

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

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for RR Donnelley & Sons in Printing Services industry. The Printing Services 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.

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 RR Donnelley & Sons business can come under increasing regulations regarding data privacy, data security, etc.

Technology acceleration in Forth Industrial Revolution

– RR Donnelley & Sons has witnessed rapid integration of technology during Covid-19 in the Printing Services industry. As one of the leading players in the industry, RR Donnelley & Sons needs to keep up with the evolution of technology in the Printing Services 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.

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.

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Weighted SWOT Analysis of RR Donnelley & Sons Template, Example

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

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