SWOT Analysis / TOWS Matrix for Sector 5 (United States)
Based on various researches at Oak Spring University , Sector 5 is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing commodity prices, there is increasing trade war between United States & China, there is backlash against globalization, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sector 5 can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sector 5, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sector 5 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 Sector 5 can be done for the following purposes –
1. Strategic planning of Sector 5
2. Improving business portfolio management of Sector 5
3. Assessing feasibility of the new initiative in United States
4. Making a Computer Hardware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sector 5
Strengths of Sector 5 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sector 5 are -
Organizational Resilience of Sector 5
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sector 5 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Sector 5 is one of the leading players in the Computer Hardware 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.
High brand equity
– Sector 5 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sector 5 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Computer Hardware industry
- digital transformation varies from industry to industry. For Sector 5 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sector 5 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.
Cross disciplinary teams
– Horizontal connected teams at the Sector 5 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.
Operational resilience
– The operational resilience strategy of Sector 5 comprises – understanding the underlying the factors in the Computer Hardware 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.
Highly skilled collaborators
– Sector 5 has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Hardware industry. Secondly the value chain collaborators of Sector 5 have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Sector 5 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.
Learning organization
- Sector 5 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 Sector 5 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sector 5 emphasize – knowledge, initiative, and innovation.
Analytics focus
– Sector 5 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 Computer Hardware 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 Sector 5 in Computer Hardware industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Sector 5 has one of the best training and development program in Technology 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.
Weaknesses of Sector 5 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sector 5 are -
Increasing silos among functional specialists
– The organizational structure of Sector 5 is dominated by functional specialists. It is not different from other players in the Computer Hardware industry, but Sector 5 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sector 5 to focus more on services in the Computer Hardware industry rather than just following the product oriented approach.
Skills based hiring in Computer Hardware industry
– The stress on hiring functional specialists at Sector 5 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.
Products dominated business model
– Even though Sector 5 has some of the most successful models in the Computer Hardware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sector 5 should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Sector 5 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 Computer Hardware industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Sector 5, it seems that company is thinking out the frontier risks that can impact Computer Hardware 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sector 5 is slow explore the new channels of communication. These new channels of communication can help Sector 5 to provide better information regarding Computer Hardware products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Sector 5 needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Hardware industry have deep experience in developing customer relationships. Marketing department at Sector 5 can leverage the sales team experience to cultivate customer relationships as Sector 5 is planning to shift buying processes online.
High bargaining power of channel partners in Computer Hardware industry
– because of the regulatory requirements in United States, Sector 5 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 Computer Hardware industry.
Slow to strategic competitive environment developments
– As Sector 5 is one of the leading players in the Computer Hardware industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Hardware industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Sector 5 has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Hardware industry over the last five years. Sector 5 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 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 Sector 5 supply chain. Even after few cautionary changes, Sector 5 is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sector 5 vulnerable to further global disruptions in South East Asia.
Sector 5 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sector 5 are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sector 5 can use these opportunities to build new business models that can help the communities that Sector 5 operates in. Secondly it can use opportunities from government spending in Computer Hardware sector.
Better consumer reach
– The expansion of the 5G network will help Sector 5 to increase its market reach. Sector 5 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.
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 Sector 5 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 Sector 5 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sector 5 is facing challenges because of the dominance of functional experts in the organization. Sector 5 can utilize new technology in the field of Computer Hardware industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Hardware industry, but it has also influenced the consumer preferences. Sector 5 can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Sector 5 has opened avenues for new revenue streams for the organization in Computer Hardware industry. This can help Sector 5 to build a more holistic ecosystem for Sector 5 products in the Computer Hardware industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Sector 5 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 Computer Hardware industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Hardware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sector 5 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. Sector 5 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.
Leveraging digital technologies
– Sector 5 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.
Developing new processes and practices
– Sector 5 can develop new processes and procedures in Computer Hardware 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sector 5 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 Sector 5 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 Sector 5 to hire the very best people irrespective of their geographical location.
Threats Sector 5 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sector 5 are -
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. Sector 5 needs to understand the core reasons impacting the Computer Hardware industry. This will help it in building a better workplace.
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 Sector 5 business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sector 5 may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Hardware sector.
Regulatory challenges
– Sector 5 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 Computer Hardware industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Hardware industry are lowering. It can presents Sector 5 with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Hardware 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 Sector 5 in the Computer Hardware sector and impact the bottomline of the organization.
Increasing wage structure of Sector 5
– 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 Sector 5.
Consumer confidence and its impact on Sector 5 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 Computer Hardware industry and other sectors.
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.
High dependence on third party suppliers
– Sector 5 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.
Environmental challenges
– Sector 5 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. Sector 5 can take advantage of this fund but it will also bring new competitors in the Computer Hardware industry.
Stagnating economy with rate increase
– Sector 5 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 Computer Hardware industry.
Shortening product life cycle
– it is one of the major threat that Sector 5 is facing in Computer Hardware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Sector 5 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sector 5 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 Sector 5 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 Sector 5 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 Sector 5 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 Sector 5 needs to make to build a sustainable competitive advantage.