SWOT Analysis / TOWS Matrix for ReShape Lifesciences (United States)
Based on various researches at Oak Spring University , ReShape Lifesciences is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion,
supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of ReShape Lifesciences
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ReShape Lifesciences can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ReShape Lifesciences, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ReShape Lifesciences 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 ReShape Lifesciences can be done for the following purposes –
1. Strategic planning of ReShape Lifesciences
2. Improving business portfolio management of ReShape Lifesciences
3. Assessing feasibility of the new initiative in United States
4. Making a Medical Equipment & Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ReShape Lifesciences
Strengths of ReShape Lifesciences | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ReShape Lifesciences are -
Learning organization
- ReShape Lifesciences 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 ReShape Lifesciences is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ReShape Lifesciences emphasize – knowledge, initiative, and innovation.
Ability to lead change in Medical Equipment & Supplies
– ReShape Lifesciences is one of the leading players in the Medical Equipment & Supplies industry in United States. Over the years it has not only transformed the business landscape in the Medical Equipment & Supplies industry in United States but also across the existing markets. The ability to lead change has enabled ReShape Lifesciences in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of ReShape Lifesciences in the Healthcare sector have low bargaining power. ReShape Lifesciences has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ReShape Lifesciences to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– ReShape Lifesciences has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ReShape Lifesciences to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Medical Equipment & Supplies industry
– ReShape Lifesciences is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Medical Equipment & Supplies industry
- digital transformation varies from industry to industry. For ReShape Lifesciences digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ReShape Lifesciences 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.
Highly skilled collaborators
– ReShape Lifesciences has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Medical Equipment & Supplies industry. Secondly the value chain collaborators of ReShape Lifesciences have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– ReShape Lifesciences has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ReShape Lifesciences staying ahead in the Medical Equipment & Supplies industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– ReShape Lifesciences 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 Medical Equipment & Supplies 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.
Operational resilience
– The operational resilience strategy of ReShape Lifesciences comprises – understanding the underlying the factors in the Medical Equipment & Supplies 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.
Organizational Resilience of ReShape Lifesciences
– The covid-19 pandemic has put organizational resilience at the centre of everthing ReShape Lifesciences does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– ReShape Lifesciences is one of the leading players in the Medical Equipment & Supplies 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.
Weaknesses of ReShape Lifesciences | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ReShape Lifesciences are -
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 ReShape Lifesciences supply chain. Even after few cautionary changes, ReShape Lifesciences is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left ReShape Lifesciences vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of United States, ReShape Lifesciences needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, ReShape Lifesciences 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.
Skills based hiring in Medical Equipment & Supplies industry
– The stress on hiring functional specialists at ReShape Lifesciences has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on ReShape Lifesciences ‘s star products
– The top 2 products and services of ReShape Lifesciences still accounts for major business revenue. This dependence on star products in Medical Equipment & Supplies industry has resulted into insufficient focus on developing new products, even though ReShape Lifesciences has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, ReShape Lifesciences has high operating costs in the Medical Equipment & Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract ReShape Lifesciences lucrative customers.
Products dominated business model
– Even though ReShape Lifesciences has some of the most successful models in the Medical Equipment & Supplies industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. ReShape Lifesciences should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of ReShape Lifesciences, it seems that company is thinking out the frontier risks that can impact Medical Equipment & Supplies 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.
Slow to strategic competitive environment developments
– As ReShape Lifesciences is one of the leading players in the Medical Equipment & Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Medical Equipment & Supplies industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Medical Equipment & Supplies industry, ReShape Lifesciences 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.
Capital Spending Reduction
– Even during the low interest decade, ReShape Lifesciences 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 Medical Equipment & Supplies industry using digital technology.
ReShape Lifesciences Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ReShape Lifesciences are -
Low interest rates
– Even though inflation is raising its head in most developed economies, ReShape Lifesciences 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.
Using analytics as competitive advantage
– ReShape Lifesciences has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Medical Equipment & Supplies sector. This continuous investment in analytics has enabled ReShape Lifesciences to build a competitive advantage using analytics. The analytics driven competitive advantage can help ReShape Lifesciences to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– ReShape Lifesciences can improve the customer journey of consumers in the Medical Equipment & Supplies 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, ReShape Lifesciences 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 ReShape Lifesciences 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 ReShape Lifesciences in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Medical Equipment & Supplies industry, and it will provide faster access to the consumers.
Loyalty marketing
– ReShape Lifesciences 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.
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 ReShape Lifesciences to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for ReShape Lifesciences 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Medical Equipment & Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ReShape Lifesciences 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. ReShape Lifesciences 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.
Developing new processes and practices
– ReShape Lifesciences can develop new processes and procedures in Medical Equipment & Supplies industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ReShape Lifesciences can use these opportunities to build new business models that can help the communities that ReShape Lifesciences operates in. Secondly it can use opportunities from government spending in Medical Equipment & Supplies sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Medical Equipment & Supplies industry, but it has also influenced the consumer preferences. ReShape Lifesciences can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at ReShape Lifesciences 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 Medical Equipment & Supplies industry.
Threats ReShape Lifesciences External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ReShape Lifesciences are -
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. ReShape Lifesciences 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.
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 ReShape Lifesciences.
Consumer confidence and its impact on ReShape Lifesciences 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 Medical Equipment & Supplies industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– ReShape Lifesciences has witnessed rapid integration of technology during Covid-19 in the Medical Equipment & Supplies industry. As one of the leading players in the industry, ReShape Lifesciences needs to keep up with the evolution of technology in the Medical Equipment & Supplies 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.
Environmental challenges
– ReShape Lifesciences 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. ReShape Lifesciences can take advantage of this fund but it will also bring new competitors in the Medical Equipment & Supplies industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ReShape Lifesciences 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 ReShape Lifesciences prominent markets.
Stagnating economy with rate increase
– ReShape Lifesciences 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 Medical Equipment & Supplies industry.
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.
Easy access to finance
– Easy access to finance in Medical Equipment & Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. ReShape Lifesciences can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Medical Equipment & Supplies industry are lowering. It can presents ReShape Lifesciences with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Medical Equipment & Supplies sector.
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 ReShape Lifesciences in the Medical Equipment & Supplies sector and impact the bottomline of the organization.
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. ReShape Lifesciences needs to understand the core reasons impacting the Medical Equipment & Supplies industry. This will help it in building a better workplace.
High dependence on third party suppliers
– ReShape Lifesciences 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.
Weighted SWOT Analysis of ReShape Lifesciences Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ReShape Lifesciences 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 ReShape Lifesciences 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 ReShape Lifesciences 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 ReShape Lifesciences 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 ReShape Lifesciences needs to make to build a sustainable competitive advantage.