Seagate (STX) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Storage Devices
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Seagate (United States)
Based on various researches at Oak Spring University , Seagate is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, 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, increasing energy prices, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Seagate can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Seagate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Seagate 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 Seagate can be done for the following purposes –
1. Strategic planning of Seagate
2. Improving business portfolio management of Seagate
3. Assessing feasibility of the new initiative in United States
4. Making a Computer Storage Devices sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Seagate
Strengths of Seagate | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Seagate are -
Innovation driven organization
– Seagate is one of the most innovative firm in Computer Storage Devices sector.
Analytics focus
– Seagate 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 Computer Storage Devices 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.
Strong track record of project management in the Computer Storage Devices industry
– Seagate is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Seagate in Computer Storage Devices industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Seagate comprises – understanding the underlying the factors in the Computer Storage Devices 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 Computer Storage Devices
– Seagate is one of the leading players in the Computer Storage Devices industry in United States. Over the years it has not only transformed the business landscape in the Computer Storage Devices industry in United States but also across the existing markets. The ability to lead change has enabled Seagate in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Seagate is one of the leading players in the Computer Storage Devices industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Seagate has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Storage Devices industry. Secondly the value chain collaborators of Seagate have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Seagate has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Seagate staying ahead in the Computer Storage Devices industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Seagate 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.
Sustainable margins compare to other players in Computer Storage Devices industry
– Seagate has clearly differentiated products in the market place. This has enabled Seagate to fetch slight price premium compare to the competitors in the Computer Storage Devices industry. The sustainable margins have also helped Seagate to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Seagate in the Technology sector have low bargaining power. Seagate has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Seagate to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Seagate | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seagate are -
Slow decision making process
– As mentioned earlier in the report, Seagate has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Storage Devices industry over the last five years. Seagate 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.
Compensation and incentives
– The revenue per employee of Seagate is just above the Computer Storage Devices 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.
Workers concerns about automation
– As automation is fast increasing in the Computer Storage Devices industry, Seagate 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, Seagate 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 Computer Storage Devices industry using digital technology.
Low market penetration in new markets
– Outside its home market of United States, Seagate needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Seagate has some of the most successful models in the Computer Storage Devices industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Seagate should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Seagate has high operating costs in the Computer Storage Devices industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Seagate lucrative customers.
High dependence on Seagate ‘s star products
– The top 2 products and services of Seagate still accounts for major business revenue. This dependence on star products in Computer Storage Devices industry has resulted into insufficient focus on developing new products, even though Seagate has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Seagate needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Storage Devices industry have deep experience in developing customer relationships. Marketing department at Seagate can leverage the sales team experience to cultivate customer relationships as Seagate is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Seagate, in the dynamic environment of Computer Storage Devices industry it has struggled to respond to the nimble upstart competition. Seagate has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Seagate supply chain. Even after few cautionary changes, Seagate is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Seagate vulnerable to further global disruptions in South East Asia.
Seagate Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Seagate are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Storage Devices industry, but it has also influenced the consumer preferences. Seagate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Seagate can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Computer Storage Devices industry.
Buying journey improvements
– Seagate can improve the customer journey of consumers in the Computer Storage Devices 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.
Leveraging digital technologies
– Seagate 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Seagate 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 Seagate to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Seagate has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Storage Devices sector. This continuous investment in analytics has enabled Seagate to build a competitive advantage using analytics. The analytics driven competitive advantage can help Seagate to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Seagate has opened avenues for new revenue streams for the organization in Computer Storage Devices industry. This can help Seagate to build a more holistic ecosystem for Seagate products in the Computer Storage Devices industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Storage Devices industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Seagate 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. Seagate 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, Seagate can use these opportunities to build new business models that can help the communities that Seagate operates in. Secondly it can use opportunities from government spending in Computer Storage Devices sector.
Loyalty marketing
– Seagate 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Seagate 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 Seagate to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Seagate to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Seagate in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Storage Devices industry, and it will provide faster access to the consumers.
Threats Seagate External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Seagate are -
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 Seagate.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Storage Devices industry are lowering. It can presents Seagate with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Storage Devices sector.
Consumer confidence and its impact on Seagate demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Computer Storage Devices 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.
Easy access to finance
– Easy access to finance in Computer Storage Devices industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Seagate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Seagate may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Storage Devices sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Seagate in Computer Storage Devices industry. The Computer Storage Devices 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.
High dependence on third party suppliers
– Seagate 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, Seagate 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 Seagate prominent markets.
Regulatory challenges
– Seagate 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 Computer Storage Devices industry regulations.
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. Seagate 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.
Stagnating economy with rate increase
– Seagate 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 Computer Storage Devices industry.
Weighted SWOT Analysis of Seagate Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Seagate 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 Seagate 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 Seagate 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 Seagate 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 Seagate needs to make to build a sustainable competitive advantage.