SWOT Analysis / TOWS Matrix for Smith&Nephew SNATS (United States)
Based on various researches at Oak Spring University , Smith&Nephew SNATS is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, there is backlash against globalization, wage bills are increasing, talent flight as more people leaving formal jobs, increasing energy prices, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies,
technology disruption, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Smith&Nephew SNATS
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Smith&Nephew SNATS can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smith&Nephew SNATS, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smith&Nephew SNATS 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 Smith&Nephew SNATS can be done for the following purposes –
1. Strategic planning of Smith&Nephew SNATS
2. Improving business portfolio management of Smith&Nephew SNATS
3. Assessing feasibility of the new initiative in United States
4. Making a Medical Equipment & Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Smith&Nephew SNATS
Strengths of Smith&Nephew SNATS | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smith&Nephew SNATS are -
Low bargaining power of suppliers
– Suppliers of Smith&Nephew SNATS in the Healthcare sector have low bargaining power. Smith&Nephew SNATS has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Smith&Nephew SNATS to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Medical Equipment & Supplies industry
– Smith&Nephew SNATS is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Smith&Nephew SNATS is one of the most innovative firm in Medical Equipment & Supplies sector.
Highly skilled collaborators
– Smith&Nephew SNATS has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Medical Equipment & Supplies industry. Secondly the value chain collaborators of Smith&Nephew SNATS have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Smith&Nephew SNATS comprises – understanding the underlying the factors in the Medical Equipment & Supplies 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 Medical Equipment & Supplies
– Smith&Nephew SNATS is one of the leading players in the Medical Equipment & Supplies industry in United States. Over the years it has not only transformed the business landscape in the Medical Equipment & Supplies industry in United States but also across the existing markets. The ability to lead change has enabled Smith&Nephew SNATS in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Smith&Nephew SNATS has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Smith&Nephew SNATS to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Medical Equipment & Supplies industry
– Smith&Nephew SNATS has clearly differentiated products in the market place. This has enabled Smith&Nephew SNATS to fetch slight price premium compare to the competitors in the Medical Equipment & Supplies industry. The sustainable margins have also helped Smith&Nephew SNATS to invest into research and development (R&D) and innovation.
Training and development
– Smith&Nephew SNATS has one of the best training and development program in Healthcare 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.
Effective Research and Development (R&D)
– Smith&Nephew SNATS has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Smith&Nephew SNATS staying ahead in the Medical Equipment & Supplies industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Smith&Nephew SNATS 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 Medical Equipment & Supplies 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 Smith&Nephew SNATS in Medical Equipment & Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Smith&Nephew SNATS | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Smith&Nephew SNATS are -
High operating costs
– Compare to the competitors, Smith&Nephew SNATS has high operating costs in the Medical Equipment & Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Smith&Nephew SNATS lucrative customers.
Low market penetration in new markets
– Outside its home market of United States, Smith&Nephew SNATS needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Smith&Nephew SNATS has some of the most successful models in the Medical Equipment & Supplies industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Smith&Nephew SNATS should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the Medical Equipment & Supplies industry, Smith&Nephew SNATS 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.
Skills based hiring in Medical Equipment & Supplies industry
– The stress on hiring functional specialists at Smith&Nephew SNATS 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 Smith&Nephew SNATS strategy
– From the outside it seems that the employees of Smith&Nephew SNATS 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 Smith&Nephew SNATS is dominated by functional specialists. It is not different from other players in the Medical Equipment & Supplies industry, but Smith&Nephew SNATS needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Smith&Nephew SNATS to focus more on services in the Medical Equipment & Supplies industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Smith&Nephew SNATS is just above the Medical Equipment & Supplies 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 Smith&Nephew SNATS, in the dynamic environment of Medical Equipment & Supplies industry it has struggled to respond to the nimble upstart competition. Smith&Nephew SNATS has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Medical Equipment & Supplies industry
– because of the regulatory requirements in United States, Smith&Nephew SNATS 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 Medical Equipment & Supplies industry.
Need for greater diversity
– Smith&Nephew SNATS 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.
Smith&Nephew SNATS Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Smith&Nephew SNATS are -
Loyalty marketing
– Smith&Nephew SNATS 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Medical Equipment & Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Smith&Nephew SNATS 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. Smith&Nephew SNATS 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Smith&Nephew SNATS can use these opportunities to build new business models that can help the communities that Smith&Nephew SNATS operates in. Secondly it can use opportunities from government spending in Medical Equipment & Supplies sector.
Creating value in data economy
– The success of analytics program of Smith&Nephew SNATS has opened avenues for new revenue streams for the organization in Medical Equipment & Supplies industry. This can help Smith&Nephew SNATS to build a more holistic ecosystem for Smith&Nephew SNATS products in the Medical Equipment & Supplies industry by providing – data insight services, data privacy related products, data based consulting services, 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 Smith&Nephew SNATS 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.
Leveraging digital technologies
– Smith&Nephew SNATS 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Medical Equipment & Supplies industry, but it has also influenced the consumer preferences. Smith&Nephew SNATS can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Smith&Nephew SNATS is facing challenges because of the dominance of functional experts in the organization. Smith&Nephew SNATS can utilize new technology in the field of Medical Equipment & Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smith&Nephew SNATS 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 Smith&Nephew SNATS to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Medical Equipment & Supplies industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Smith&Nephew SNATS in the Medical Equipment & Supplies industry. Now Smith&Nephew SNATS can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Smith&Nephew SNATS 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 Medical Equipment & Supplies industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Smith&Nephew SNATS in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Medical Equipment & Supplies industry, and it will provide faster access to the consumers.
Manufacturing automation
– Smith&Nephew SNATS can use the latest technology developments to improve its manufacturing and designing process in Medical Equipment & Supplies 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.
Threats Smith&Nephew SNATS External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Smith&Nephew SNATS are -
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 Smith&Nephew SNATS in the Medical Equipment & Supplies sector and impact the bottomline of the organization.
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.
Easy access to finance
– Easy access to finance in Medical Equipment & Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Smith&Nephew SNATS can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Smith&Nephew SNATS 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 Medical Equipment & Supplies industry regulations.
High dependence on third party suppliers
– Smith&Nephew SNATS 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Medical Equipment & Supplies industry are lowering. It can presents Smith&Nephew SNATS with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Medical Equipment & Supplies sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Smith&Nephew SNATS may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Medical Equipment & Supplies sector.
Environmental challenges
– Smith&Nephew SNATS 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. Smith&Nephew SNATS can take advantage of this fund but it will also bring new competitors in the Medical Equipment & Supplies industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Smith&Nephew SNATS 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 Smith&Nephew SNATS prominent markets.
Technology acceleration in Forth Industrial Revolution
– Smith&Nephew SNATS has witnessed rapid integration of technology during Covid-19 in the Medical Equipment & Supplies industry. As one of the leading players in the industry, Smith&Nephew SNATS needs to keep up with the evolution of technology in the Medical Equipment & Supplies 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.
Shortening product life cycle
– it is one of the major threat that Smith&Nephew SNATS is facing in Medical Equipment & Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Smith&Nephew SNATS.
Weighted SWOT Analysis of Smith&Nephew SNATS Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Smith&Nephew SNATS 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 Smith&Nephew SNATS 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 Smith&Nephew SNATS 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 Smith&Nephew SNATS 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 Smith&Nephew SNATS needs to make to build a sustainable competitive advantage.