RR Donnelley & Sons (RRD) SWOT Analysis / TOWS Matrix / MBA Resources
Printing Services
Strategy / 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 – technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , etc
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.
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
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 -
Training and development
– RR Donnelley & Sons has one of the best training and development program in Services 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.
Organizational Resilience of RR Donnelley & Sons
– The covid-19 pandemic has put organizational resilience at the centre of everthing RR Donnelley & Sons does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Learning organization
- RR Donnelley & Sons 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 RR Donnelley & Sons is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at RR Donnelley & Sons emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that RR Donnelley & Sons has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the RR Donnelley & Sons 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.
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 -
Lack of clear differentiation of RR Donnelley & Sons products
– To increase the profitability and margins on the products, RR Donnelley & Sons needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
High operating costs
– Compare to the competitors, RR Donnelley & Sons has high operating costs in the Printing Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract RR Donnelley & Sons lucrative customers.
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.
Compensation and incentives
– The revenue per employee of RR Donnelley & Sons is just above the Printing Services 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.
Need for greater diversity
– RR Donnelley & Sons 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, RR Donnelley & Sons is slow explore the new channels of communication. These new channels of communication can help RR Donnelley & Sons to provide better information regarding Printing Services products and services. It can also build an online community to further reach out to potential customers.
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.
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.
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 -
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.
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.
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.
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.
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 RR Donnelley & Sons 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.
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.
Leveraging digital technologies
– RR Donnelley & Sons can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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.
Loyalty marketing
– RR Donnelley & Sons 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.
Manufacturing automation
– RR Donnelley & Sons can use the latest technology developments to improve its manufacturing and designing process in Printing Services 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.
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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that RR Donnelley & Sons is facing in Printing Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, RR Donnelley & Sons can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate RR Donnelley & Sons prominent markets.
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.
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.
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.
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.
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.
Regulatory challenges
– RR Donnelley & Sons 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 Printing Services 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 RR Donnelley & Sons in the Printing Services 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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, RR Donnelley & Sons may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing Services sector.
Increasing wage structure of RR Donnelley & Sons
– 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 RR Donnelley & Sons.
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.
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.
