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 – talent flight as more people leaving formal jobs, geopolitical disruptions, technology disruption, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
increasing energy prices, increasing commodity prices, 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 -
Ability to lead change in Computer Hardware
– Sector 5 is one of the leading players in the Computer Hardware industry in United States. Over the years it has not only transformed the business landscape in the Computer Hardware industry in United States but also across the existing markets. The ability to lead change has enabled Sector 5 in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Effective Research and Development (R&D)
– Sector 5 has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sector 5 staying ahead in the Computer Hardware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Sector 5 in the Technology sector have low bargaining power. Sector 5 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sector 5 to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Sector 5 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sector 5 has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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.
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.
Diverse revenue streams
– Sector 5 is present in almost all the verticals within the Computer Hardware industry. This has provided Sector 5 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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the Computer Hardware industry, Sector 5 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.
Interest costs
– Compare to the competition, Sector 5 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 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.
Ability to respond to the competition
– As the decision making is very deliberative at Sector 5, in the dynamic environment of Computer Hardware industry it has struggled to respond to the nimble upstart competition. Sector 5 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
– Sector 5 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.
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.
Lack of clear differentiation of Sector 5 products
– To increase the profitability and margins on the products, Sector 5 needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
Sector 5 Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sector 5 are -
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.
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. Sector 5 can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
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.
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.
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.
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.
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.
Manufacturing automation
– Sector 5 can use the latest technology developments to improve its manufacturing and designing process in Computer Hardware 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.
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.
Use of Bitcoin and other crypto currencies for transactions in Computer Hardware industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sector 5 in the Computer Hardware industry. Now Sector 5 can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Sector 5 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sector 5 are -
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.
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.
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.
Easy access to finance
– Easy access to finance in Computer Hardware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sector 5 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 Sector 5 business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sector 5 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 Sector 5 prominent markets.
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.
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.
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 Sector 5.
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.
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.
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.
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.
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.
