SWOT Analysis / TOWS Matrix for SG Blocks (United States)
Based on various researches at Oak Spring University , SG Blocks is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, technology disruption, there is backlash against globalization, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing commodity prices,
there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SG Blocks can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SG Blocks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SG Blocks 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 SG Blocks can be done for the following purposes –
1. Strategic planning of SG Blocks
2. Improving business portfolio management of SG Blocks
3. Assessing feasibility of the new initiative in United States
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SG Blocks
Strengths of SG Blocks | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SG Blocks are -
Successful track record of launching new products
– SG Blocks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SG Blocks 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.
Cross disciplinary teams
– Horizontal connected teams at the SG Blocks 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.
Effective Research and Development (R&D)
– SG Blocks has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SG Blocks staying ahead in the Containers & Packaging 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 SG Blocks in the Basic Materials sector have low bargaining power. SG Blocks has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SG Blocks to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– SG Blocks 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 Containers & Packaging 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.
Training and development
– SG Blocks has one of the best training and development program in Basic Materials 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.
Innovation driven organization
– SG Blocks is one of the most innovative firm in Containers & Packaging sector.
Highly skilled collaborators
– SG Blocks has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Containers & Packaging industry. Secondly the value chain collaborators of SG Blocks have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Containers & Packaging industry
– SG Blocks has clearly differentiated products in the market place. This has enabled SG Blocks to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped SG Blocks to invest into research and development (R&D) and innovation.
Strong track record of project management in the Containers & Packaging industry
– SG Blocks is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- SG Blocks 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 SG Blocks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SG Blocks emphasize – knowledge, initiative, and innovation.
Digital Transformation in Containers & Packaging industry
- digital transformation varies from industry to industry. For SG Blocks digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SG Blocks 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.
Weaknesses of SG Blocks | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SG Blocks are -
Workers concerns about automation
– As automation is fast increasing in the Containers & Packaging industry, SG Blocks 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, SG Blocks 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 Containers & Packaging industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at SG Blocks, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. SG Blocks has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, SG Blocks has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. SG Blocks 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 cash cycle compare to competitors
SG Blocks has a high cash cycle compare to other players in the Containers & Packaging industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, SG Blocks 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.
Low market penetration in new markets
– Outside its home market of United States, SG Blocks needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Containers & Packaging industry
– The stress on hiring functional specialists at SG Blocks 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.
Employees’ less understanding of SG Blocks strategy
– From the outside it seems that the employees of SG Blocks 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.
Increasing silos among functional specialists
– The organizational structure of SG Blocks is dominated by functional specialists. It is not different from other players in the Containers & Packaging industry, but SG Blocks needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SG Blocks to focus more on services in the Containers & Packaging industry rather than just following the product oriented approach.
Lack of clear differentiation of SG Blocks products
– To increase the profitability and margins on the products, SG Blocks needs to provide more differentiated products than what it is currently offering in the marketplace.
SG Blocks Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SG Blocks are -
Buying journey improvements
– SG Blocks can improve the customer journey of consumers in the Containers & Packaging 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.
Better consumer reach
– The expansion of the 5G network will help SG Blocks to increase its market reach. SG Blocks 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SG Blocks 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 SG Blocks to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– SG Blocks has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Containers & Packaging sector. This continuous investment in analytics has enabled SG Blocks to build a competitive advantage using analytics. The analytics driven competitive advantage can help SG Blocks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Containers & Packaging industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SG Blocks 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. SG Blocks 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Containers & Packaging industry, but it has also influenced the consumer preferences. SG Blocks can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, SG Blocks 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 SG Blocks to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SG Blocks in the Containers & Packaging industry. Now SG Blocks can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects SG Blocks can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– SG Blocks 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.
Building a culture of innovation
– managers at SG Blocks 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 Containers & Packaging industry.
Leveraging digital technologies
– SG Blocks 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SG Blocks can use these opportunities to build new business models that can help the communities that SG Blocks operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.
Threats SG Blocks External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SG Blocks are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for SG Blocks in Containers & Packaging industry. The Containers & Packaging 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.
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. SG Blocks 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.
Technology acceleration in Forth Industrial Revolution
– SG Blocks has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, SG Blocks needs to keep up with the evolution of technology in the Containers & Packaging 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.
Stagnating economy with rate increase
– SG Blocks 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 Containers & Packaging industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents SG Blocks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging sector.
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 SG Blocks business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– SG Blocks 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 Containers & Packaging 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.
High dependence on third party suppliers
– SG Blocks 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SG Blocks 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 SG Blocks prominent markets.
Environmental challenges
– SG Blocks 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. SG Blocks can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.
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 SG Blocks in the Containers & Packaging 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. SG Blocks needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.
Weighted SWOT Analysis of SG Blocks Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SG Blocks 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 SG Blocks 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 SG Blocks 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 SG Blocks 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 SG Blocks needs to make to build a sustainable competitive advantage.