×




SPS Commerce (SPSC) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SPS Commerce (United States)


Based on various researches at Oak Spring University , SPS Commerce is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, technology disruption, supply chains are disrupted by pandemic , there is backlash against globalization, increasing energy prices, increasing household debt because of falling income levels, etc



12 Hrs

$59.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now

24 Hrs

$49.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now

48 Hrs

$39.99
per Page
  • 100% Plagiarism Free
  • On Time Delivery | 27x7
  • PayPal Secure
  • 300 Words / Page
  • Buy Now







Introduction to SWOT Analysis of SPS Commerce


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SPS Commerce can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SPS Commerce, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SPS Commerce 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 SPS Commerce can be done for the following purposes –
1. Strategic planning of SPS Commerce
2. Improving business portfolio management of SPS Commerce
3. Assessing feasibility of the new initiative in United States
4. Making a Software & Programming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SPS Commerce




Strengths of SPS Commerce | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of SPS Commerce are -

Low bargaining power of suppliers

– Suppliers of SPS Commerce in the Technology sector have low bargaining power. SPS Commerce has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SPS Commerce to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the SPS Commerce 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.

Ability to lead change in Software & Programming

– SPS Commerce is one of the leading players in the Software & Programming industry in United States. Over the years it has not only transformed the business landscape in the Software & Programming industry in United States but also across the existing markets. The ability to lead change has enabled SPS Commerce in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Digital Transformation in Software & Programming industry

- digital transformation varies from industry to industry. For SPS Commerce digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SPS Commerce 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

– SPS Commerce has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SPS Commerce to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

High switching costs

– The high switching costs that SPS Commerce 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.

Strong track record of project management in the Software & Programming industry

– SPS Commerce is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Effective Research and Development (R&D)

– SPS Commerce has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SPS Commerce staying ahead in the Software & Programming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of SPS Commerce in Software & Programming industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– SPS Commerce has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SPS Commerce 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.

Sustainable margins compare to other players in Software & Programming industry

– SPS Commerce has clearly differentiated products in the market place. This has enabled SPS Commerce to fetch slight price premium compare to the competitors in the Software & Programming industry. The sustainable margins have also helped SPS Commerce to invest into research and development (R&D) and innovation.

Learning organization

- SPS Commerce 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 SPS Commerce is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SPS Commerce emphasize – knowledge, initiative, and innovation.






Weaknesses of SPS Commerce | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of SPS Commerce are -

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, SPS Commerce is slow explore the new channels of communication. These new channels of communication can help SPS Commerce to provide better information regarding Software & Programming products and services. It can also build an online community to further reach out to potential customers.

Ability to respond to the competition

– As the decision making is very deliberative at SPS Commerce, in the dynamic environment of Software & Programming industry it has struggled to respond to the nimble upstart competition. SPS Commerce has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, SPS Commerce has high operating costs in the Software & Programming industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SPS Commerce lucrative customers.

Employees’ less understanding of SPS Commerce strategy

– From the outside it seems that the employees of SPS Commerce 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.

Slow decision making process

– As mentioned earlier in the report, SPS Commerce has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Software & Programming industry over the last five years. SPS Commerce 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.

Workers concerns about automation

– As automation is fast increasing in the Software & Programming industry, SPS Commerce 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.

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 SPS Commerce supply chain. Even after few cautionary changes, SPS Commerce is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SPS Commerce vulnerable to further global disruptions in South East Asia.

Skills based hiring in Software & Programming industry

– The stress on hiring functional specialists at SPS Commerce 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.

Lack of clear differentiation of SPS Commerce products

– To increase the profitability and margins on the products, SPS Commerce needs to provide more differentiated products than what it is currently offering in the marketplace.

High dependence on SPS Commerce ‘s star products

– The top 2 products and services of SPS Commerce still accounts for major business revenue. This dependence on star products in Software & Programming industry has resulted into insufficient focus on developing new products, even though SPS Commerce has relatively successful track record of launching new products.

Capital Spending Reduction

– Even during the low interest decade, SPS Commerce 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 Software & Programming industry using digital technology.




SPS Commerce Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of SPS Commerce are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SPS Commerce 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 SPS Commerce to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, SPS Commerce is facing challenges because of the dominance of functional experts in the organization. SPS Commerce can utilize new technology in the field of Software & Programming industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Developing new processes and practices

– SPS Commerce can develop new processes and procedures in Software & Programming 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, SPS Commerce 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 SPS Commerce to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Manufacturing automation

– SPS Commerce can use the latest technology developments to improve its manufacturing and designing process in Software & Programming 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.

Building a culture of innovation

– managers at SPS Commerce 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 Software & Programming industry.

Leveraging digital technologies

– SPS Commerce 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.

Using analytics as competitive advantage

– SPS Commerce has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Software & Programming sector. This continuous investment in analytics has enabled SPS Commerce to build a competitive advantage using analytics. The analytics driven competitive advantage can help SPS Commerce to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 SPS Commerce 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.

Use of Bitcoin and other crypto currencies for transactions in Software & Programming industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SPS Commerce in the Software & Programming industry. Now SPS Commerce can target international markets with far fewer capital restrictions requirements than the existing system.

Loyalty marketing

– SPS Commerce 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.

Buying journey improvements

– SPS Commerce can improve the customer journey of consumers in the Software & Programming 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SPS Commerce can use these opportunities to build new business models that can help the communities that SPS Commerce operates in. Secondly it can use opportunities from government spending in Software & Programming sector.




Threats SPS Commerce External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of SPS Commerce are -

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.

Shortening product life cycle

– it is one of the major threat that SPS Commerce is facing in Software & Programming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. SPS Commerce needs to understand the core reasons impacting the Software & Programming industry. This will help it in building a better workplace.

Easy access to finance

– Easy access to finance in Software & Programming industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SPS Commerce 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 SPS Commerce business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– SPS Commerce 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 Software & Programming industry.

Consumer confidence and its impact on SPS Commerce 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 Software & Programming 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.

Environmental challenges

– SPS Commerce 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. SPS Commerce can take advantage of this fund but it will also bring new competitors in the Software & Programming industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, SPS Commerce 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 SPS Commerce prominent markets.

High dependence on third party suppliers

– SPS Commerce 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Software & Programming industry are lowering. It can presents SPS Commerce with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Software & Programming sector.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SPS Commerce may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Software & Programming sector.




Weighted SWOT Analysis of SPS Commerce Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SPS Commerce 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 SPS Commerce 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 SPS Commerce 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 SPS Commerce 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 SPS Commerce needs to make to build a sustainable competitive advantage.



--- ---

Start Group SWOT Analysis / TOWS Matrix

Basic Materials , Misc. Fabricated Products


Leumi SWOT Analysis / TOWS Matrix

Financial , Regional Banks


Saes Getters SWOT Analysis / TOWS Matrix

Technology , Electronic Instr. & Controls


Navient SWOT Analysis / TOWS Matrix

Financial , Consumer Financial Services


G-treeBNT SWOT Analysis / TOWS Matrix

Technology , Software & Programming


Allegra Orthopaedics SWOT Analysis / TOWS Matrix

Healthcare , Medical Equipment & Supplies


Swiss Prime Site SWOT Analysis / TOWS Matrix

Services , Real Estate Operations


Hansung Ent SWOT Analysis / TOWS Matrix

Consumer/Non-Cyclical , Food Processing