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 – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic ,
wage bills are increasing, technology disruption, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Seagate 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.
Learning organization
- Seagate 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 Seagate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Seagate emphasize – knowledge, initiative, and innovation.
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.
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.
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.
Diverse revenue streams
– Seagate is present in almost all the verticals within the Computer Storage Devices industry. This has provided Seagate 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.
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.
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.
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.
Training and development
– Seagate has one of the best training and development program in Technology 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.
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.
Successful track record of launching new products
– Seagate has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Seagate 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.
Weaknesses of Seagate | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Seagate are -
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.
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.
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.
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.
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.
High cash cycle compare to competitors
Seagate has a high cash cycle compare to other players in the Computer Storage Devices industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Seagate is dominated by functional specialists. It is not different from other players in the Computer Storage Devices industry, but Seagate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Seagate to focus more on services in the Computer Storage Devices industry rather than just following the product oriented approach.
Employees’ less understanding of Seagate strategy
– From the outside it seems that the employees of Seagate 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.
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.
Slow to strategic competitive environment developments
– As Seagate is one of the leading players in the Computer Storage Devices industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Storage Devices industry in last five years.
Seagate Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Seagate are -
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Seagate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Seagate can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
Better consumer reach
– The expansion of the 5G network will help Seagate to increase its market reach. Seagate 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.
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.
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.
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. Seagate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Computer Storage Devices industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Seagate in the Computer Storage Devices industry. Now Seagate can target international markets with far fewer capital restrictions requirements than the existing system.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Seagate is facing challenges because of the dominance of functional experts in the organization. Seagate can utilize new technology in the field of Computer Storage Devices industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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 -
Increasing wage structure of Seagate
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Seagate.
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.
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.
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.
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.
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.
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.
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.
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.
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. Seagate needs to understand the core reasons impacting the Computer Storage Devices industry. This will help it in building a better workplace.
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.
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.
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.