RYB Education (RYB) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for RYB Education (United States)
Based on various researches at Oak Spring University , RYB Education is operating in a macro-environment that has been destablized by – geopolitical disruptions, cloud computing is disrupting traditional business models, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that RYB Education can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the RYB Education, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which RYB Education 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 RYB Education can be done for the following purposes –
1. Strategic planning of RYB Education
2. Improving business portfolio management of RYB Education
3. Assessing feasibility of the new initiative in United States
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of RYB Education
Strengths of RYB Education | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of RYB Education are -
High switching costs
– The high switching costs that RYB Education 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.
Effective Research and Development (R&D)
– RYB Education has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – RYB Education staying ahead in the Schools industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– RYB Education is present in almost all the verticals within the Schools industry. This has provided RYB Education 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.
Strong track record of project management in the Schools industry
– RYB Education is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of RYB Education comprises – understanding the underlying the factors in the Schools 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 RYB Education
– The covid-19 pandemic has put organizational resilience at the centre of everthing RYB Education does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– RYB Education 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 Schools 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.
Superior customer experience
– The customer experience strategy of RYB Education in Schools industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- RYB Education 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 RYB Education is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at RYB Education emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Schools industry
– RYB Education has clearly differentiated products in the market place. This has enabled RYB Education to fetch slight price premium compare to the competitors in the Schools industry. The sustainable margins have also helped RYB Education to invest into research and development (R&D) and innovation.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For RYB Education digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. RYB Education 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.
High brand equity
– RYB Education has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled RYB Education to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of RYB Education | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of RYB Education are -
Compensation and incentives
– The revenue per employee of RYB Education is just above the Schools 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.
Ability to respond to the competition
– As the decision making is very deliberative at RYB Education, in the dynamic environment of Schools industry it has struggled to respond to the nimble upstart competition. RYB Education has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– RYB Education 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.
Interest costs
– Compare to the competition, RYB Education 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.
Lack of clear differentiation of RYB Education products
– To increase the profitability and margins on the products, RYB Education needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, RYB Education 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 Schools industry using digital technology.
Aligning sales with marketing
– From the outside it seems that RYB Education needs to have more collaboration between its sales team and marketing team. Sales professionals in the Schools industry have deep experience in developing customer relationships. Marketing department at RYB Education can leverage the sales team experience to cultivate customer relationships as RYB Education is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of RYB Education is dominated by functional specialists. It is not different from other players in the Schools industry, but RYB Education needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help RYB Education to focus more on services in the Schools industry rather than just following the product oriented approach.
Employees’ less understanding of RYB Education strategy
– From the outside it seems that the employees of RYB Education 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 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 RYB Education supply chain. Even after few cautionary changes, RYB Education is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left RYB Education vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, RYB Education is slow explore the new channels of communication. These new channels of communication can help RYB Education to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
RYB Education Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of RYB Education are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects RYB Education can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for RYB Education 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 RYB Education to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help RYB Education to increase its market reach. RYB Education 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, RYB Education 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
– RYB Education has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Schools sector. This continuous investment in analytics has enabled RYB Education to build a competitive advantage using analytics. The analytics driven competitive advantage can help RYB Education to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– RYB Education 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 RYB Education 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, RYB Education can use these opportunities to build new business models that can help the communities that RYB Education operates in. Secondly it can use opportunities from government spending in Schools sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Schools industry, but it has also influenced the consumer preferences. RYB Education can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– RYB Education can use the latest technology developments to improve its manufacturing and designing process in Schools 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, RYB Education is facing challenges because of the dominance of functional experts in the organization. RYB Education can utilize new technology in the field of Schools industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. RYB Education 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, RYB Education 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 RYB Education to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats RYB Education External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of RYB Education are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Schools industry are lowering. It can presents RYB Education with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Schools sector.
Regulatory challenges
– RYB Education 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 Schools industry regulations.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for RYB Education in Schools industry. The Schools 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.
Technology acceleration in Forth Industrial Revolution
– RYB Education has witnessed rapid integration of technology during Covid-19 in the Schools industry. As one of the leading players in the industry, RYB Education needs to keep up with the evolution of technology in the Schools 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.
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 RYB Education.
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 RYB Education in the Schools sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, RYB Education may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Schools sector.
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.
Stagnating economy with rate increase
– RYB Education 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 Schools industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, RYB Education 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 RYB Education prominent markets.
Consumer confidence and its impact on RYB Education 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 Schools 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. RYB Education 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.
Weighted SWOT Analysis of RYB Education Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at RYB Education 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 RYB Education 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 RYB Education 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 RYB Education 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 RYB Education needs to make to build a sustainable competitive advantage.