Sparton (SPA) SWOT Analysis / TOWS Matrix / MBA Resources
Scientific & Technical Instr.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sparton (United States)
Based on various researches at Oak Spring University , Sparton is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sparton can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sparton, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sparton 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 Sparton can be done for the following purposes –
1. Strategic planning of Sparton
2. Improving business portfolio management of Sparton
3. Assessing feasibility of the new initiative in United States
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sparton
Strengths of Sparton | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sparton are -
High switching costs
– The high switching costs that Sparton 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.
Cross disciplinary teams
– Horizontal connected teams at the Sparton 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 Scientific & Technical Instr. industry
- digital transformation varies from industry to industry. For Sparton digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sparton 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.
High brand equity
– Sparton has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sparton to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Sparton
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sparton does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Sparton has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sparton 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.
Diverse revenue streams
– Sparton is present in almost all the verticals within the Scientific & Technical Instr. industry. This has provided Sparton 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.
Superior customer experience
– The customer experience strategy of Sparton in Scientific & Technical Instr. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Sparton has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sparton staying ahead in the Scientific & Technical Instr. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Sparton is one of the most innovative firm in Scientific & Technical Instr. sector.
Highly skilled collaborators
– Sparton has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Scientific & Technical Instr. industry. Secondly the value chain collaborators of Sparton have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– Sparton has clearly differentiated products in the market place. This has enabled Sparton to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Sparton to invest into research and development (R&D) and innovation.
Weaknesses of Sparton | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sparton are -
Need for greater diversity
– Sparton 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.
High cash cycle compare to competitors
Sparton has a high cash cycle compare to other players in the Scientific & Technical Instr. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Sparton needs to have more collaboration between its sales team and marketing team. Sales professionals in the Scientific & Technical Instr. industry have deep experience in developing customer relationships. Marketing department at Sparton can leverage the sales team experience to cultivate customer relationships as Sparton is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Sparton, it seems that company is thinking out the frontier risks that can impact Scientific & Technical Instr. 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.
Products dominated business model
– Even though Sparton has some of the most successful models in the Scientific & Technical Instr. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sparton should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Sparton products
– To increase the profitability and margins on the products, Sparton needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Sparton is one of the leading players in the Scientific & Technical Instr. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Scientific & Technical Instr. industry in last five years.
Skills based hiring in Scientific & Technical Instr. industry
– The stress on hiring functional specialists at Sparton 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.
Capital Spending Reduction
– Even during the low interest decade, Sparton 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 Scientific & Technical Instr. industry using digital technology.
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 Sparton supply chain. Even after few cautionary changes, Sparton is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sparton vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Sparton is dominated by functional specialists. It is not different from other players in the Scientific & Technical Instr. industry, but Sparton needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sparton to focus more on services in the Scientific & Technical Instr. industry rather than just following the product oriented approach.
Sparton Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sparton are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sparton in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Scientific & Technical Instr. industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Sparton 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 Scientific & Technical Instr. industry.
Better consumer reach
– The expansion of the 5G network will help Sparton to increase its market reach. Sparton 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.
Using analytics as competitive advantage
– Sparton has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Scientific & Technical Instr. sector. This continuous investment in analytics has enabled Sparton to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sparton to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Sparton 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.
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. Sparton can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sparton can use these opportunities to build new business models that can help the communities that Sparton operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sparton 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 Sparton to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Sparton 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Scientific & Technical Instr. industry, but it has also influenced the consumer preferences. Sparton can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Sparton can develop new processes and procedures in Scientific & Technical Instr. 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sparton 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 Sparton to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sparton is facing challenges because of the dominance of functional experts in the organization. Sparton can utilize new technology in the field of Scientific & Technical Instr. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Sparton External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sparton 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. Sparton needs to understand the core reasons impacting the Scientific & Technical Instr. industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Sparton 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.
Technology acceleration in Forth Industrial Revolution
– Sparton has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Sparton needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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 Sparton is facing in Scientific & Technical Instr. 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 Scientific & Technical Instr. industry are lowering. It can presents Sparton with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Scientific & Technical Instr. 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 Sparton in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Sparton 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 Scientific & Technical Instr. industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sparton 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 Sparton prominent markets.
Consumer confidence and its impact on Sparton 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 Scientific & Technical Instr. industry and other sectors.
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 Sparton.
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 Sparton business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Sparton 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 Scientific & Technical Instr. industry regulations.
Weighted SWOT Analysis of Sparton Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sparton 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 Sparton 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 Sparton 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 Sparton 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 Sparton needs to make to build a sustainable competitive advantage.