Scholastic (SCHL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Scholastic (United States)

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

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Introduction to SWOT Analysis of Scholastic

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

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Strengths of Scholastic | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Scholastic are -

Ability to recruit top talent

– Scholastic is one of the leading players in the Printing & Publishing 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 & Publishing industry

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

High brand equity

– Scholastic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Scholastic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Scholastic 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 Scholastic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Scholastic emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Scholastic is one of the most innovative firm in Printing & Publishing sector.

Digital Transformation in Printing & Publishing industry

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

Operational resilience

– The operational resilience strategy of Scholastic comprises – understanding the underlying the factors in the Printing & Publishing 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.

Ability to lead change in Printing & Publishing

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

Highly skilled collaborators

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

Analytics focus

– Scholastic 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 & Publishing 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.

Strong track record of project management in the Printing & Publishing industry

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

Effective Research and Development (R&D)

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

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Weaknesses of Scholastic | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Scholastic are -

Capital Spending Reduction

– Even during the low interest decade, Scholastic 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 & Publishing industry using digital technology.

Low market penetration in new markets

– Outside its home market of United States, Scholastic needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

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

Interest costs

– Compare to the competition, Scholastic 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 Printing & Publishing industry

– The stress on hiring functional specialists at Scholastic 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.

Increasing silos among functional specialists

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

Slow decision making process

– As mentioned earlier in the report, Scholastic 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 & Publishing industry over the last five years. Scholastic 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, Scholastic has high operating costs in the Printing & Publishing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Scholastic lucrative customers.

High cash cycle compare to competitors

Scholastic has a high cash cycle compare to other players in the Printing & Publishing 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 bargaining power of channel partners in Printing & Publishing industry

– because of the regulatory requirements in United States, Scholastic is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Printing & Publishing industry.

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

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Scholastic Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Scholastic are -

Better consumer reach

– The expansion of the 5G network will help Scholastic to increase its market reach. Scholastic 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

– Scholastic 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Scholastic can use these opportunities to build new business models that can help the communities that Scholastic operates in. Secondly it can use opportunities from government spending in Printing & Publishing sector.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Scholastic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

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

Leveraging digital technologies

– Scholastic 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Scholastic 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.

Building a culture of innovation

– managers at Scholastic 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 & Publishing industry.

Learning at scale

– Online learning technologies has now opened space for Scholastic 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.

Using analytics as competitive advantage

– Scholastic has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Printing & Publishing sector. This continuous investment in analytics has enabled Scholastic to build a competitive advantage using analytics. The analytics driven competitive advantage can help Scholastic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Creating value in data economy

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

Buying journey improvements

– Scholastic can improve the customer journey of consumers in the Printing & Publishing 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.

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. Scholastic can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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Threats Scholastic External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Scholastic are -

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.

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 Scholastic business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Scholastic is facing in Printing & Publishing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

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

Consumer confidence and its impact on Scholastic 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 & Publishing industry and other sectors.

Increasing wage structure of Scholastic

– 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 Scholastic.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Scholastic in Printing & Publishing industry. The Printing & Publishing 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.

Easy access to finance

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

Environmental challenges

– Scholastic 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. Scholastic can take advantage of this fund but it will also bring new competitors in the Printing & Publishing industry.

Stagnating economy with rate increase

– Scholastic 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 & Publishing industry.

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. Scholastic needs to understand the core reasons impacting the Printing & Publishing industry. This will help it in building a better workplace.

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. Scholastic 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.

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Weighted SWOT Analysis of Scholastic Template, Example

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

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