Swedish Match Ab Ord (SWMAY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Swedish Match Ab Ord (United States)
Based on various researches at Oak Spring University , Swedish Match Ab Ord is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Swedish Match Ab Ord
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Swedish Match Ab Ord can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Swedish Match Ab Ord, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Swedish Match Ab Ord 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 Swedish Match Ab Ord can be done for the following purposes –
1. Strategic planning of Swedish Match Ab Ord
2. Improving business portfolio management of Swedish Match Ab Ord
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Swedish Match Ab Ord
Strengths of Swedish Match Ab Ord | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Swedish Match Ab Ord are -
Effective Research and Development (R&D)
– Swedish Match Ab Ord has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Swedish Match Ab Ord staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Swedish Match Ab Ord is one of the leading players in the 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.
Superior customer experience
– The customer experience strategy of Swedish Match Ab Ord in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Swedish Match Ab Ord has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Swedish Match Ab Ord to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Swedish Match Ab Ord has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Swedish Match Ab Ord 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.
Cross disciplinary teams
– Horizontal connected teams at the Swedish Match Ab Ord 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.
Innovation driven organization
– Swedish Match Ab Ord is one of the most innovative firm in sector.
Training and development
– Swedish Match Ab Ord has one of the best training and development program in 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.
Learning organization
- Swedish Match Ab Ord 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 Swedish Match Ab Ord is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Swedish Match Ab Ord emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Swedish Match Ab Ord 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.
Low bargaining power of suppliers
– Suppliers of Swedish Match Ab Ord in the sector have low bargaining power. Swedish Match Ab Ord has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Swedish Match Ab Ord to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Swedish Match Ab Ord is present in almost all the verticals within the industry. This has provided Swedish Match Ab Ord 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.
Weaknesses of Swedish Match Ab Ord | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Swedish Match Ab Ord are -
High operating costs
– Compare to the competitors, Swedish Match Ab Ord has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Swedish Match Ab Ord lucrative customers.
Products dominated business model
– Even though Swedish Match Ab Ord has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Swedish Match Ab Ord should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Swedish Match Ab Ord 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 industry using digital technology.
Employees’ less understanding of Swedish Match Ab Ord strategy
– From the outside it seems that the employees of Swedish Match Ab Ord 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.
Compensation and incentives
– The revenue per employee of Swedish Match Ab Ord is just above the 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.
Need for greater diversity
– Swedish Match Ab Ord 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 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 Swedish Match Ab Ord supply chain. Even after few cautionary changes, Swedish Match Ab Ord is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Swedish Match Ab Ord vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Swedish Match Ab Ord, it seems that company is thinking out the frontier risks that can impact 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.
High cash cycle compare to competitors
Swedish Match Ab Ord has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in industry
– The stress on hiring functional specialists at Swedish Match Ab Ord 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.
High dependence on Swedish Match Ab Ord ‘s star products
– The top 2 products and services of Swedish Match Ab Ord still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Swedish Match Ab Ord has relatively successful track record of launching new products.
Swedish Match Ab Ord Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Swedish Match Ab Ord are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Swedish Match Ab Ord 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.
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 Swedish Match Ab Ord 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.
Building a culture of innovation
– managers at Swedish Match Ab Ord 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 industry.
Leveraging digital technologies
– Swedish Match Ab Ord 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.
Better consumer reach
– The expansion of the 5G network will help Swedish Match Ab Ord to increase its market reach. Swedish Match Ab Ord 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.
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. Swedish Match Ab Ord can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Swedish Match Ab Ord 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 Swedish Match Ab Ord to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Swedish Match Ab Ord has opened avenues for new revenue streams for the organization in industry. This can help Swedish Match Ab Ord to build a more holistic ecosystem for Swedish Match Ab Ord products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Swedish Match Ab Ord can develop new processes and procedures in 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Swedish Match Ab Ord can use these opportunities to build new business models that can help the communities that Swedish Match Ab Ord operates in. Secondly it can use opportunities from government spending in sector.
Manufacturing automation
– Swedish Match Ab Ord can use the latest technology developments to improve its manufacturing and designing process in 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Swedish Match Ab Ord in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Loyalty marketing
– Swedish Match Ab Ord 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.
Threats Swedish Match Ab Ord External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Swedish Match Ab Ord 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.
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 Swedish Match Ab Ord.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Swedish Match Ab Ord 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 Swedish Match Ab Ord prominent markets.
Environmental challenges
– Swedish Match Ab Ord 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. Swedish Match Ab Ord can take advantage of this fund but it will also bring new competitors in the industry.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Swedish Match Ab Ord can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Swedish Match Ab Ord 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 industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Swedish Match Ab Ord in industry. The 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
– Swedish Match Ab Ord 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. Swedish Match Ab Ord 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.
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 Swedish Match Ab Ord business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Swedish Match Ab Ord may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Shortening product life cycle
– it is one of the major threat that Swedish Match Ab Ord is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Swedish Match Ab Ord 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 industry regulations.
Weighted SWOT Analysis of Swedish Match Ab Ord Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Swedish Match Ab Ord 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 Swedish Match Ab Ord 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 Swedish Match Ab Ord 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 Swedish Match Ab Ord 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 Swedish Match Ab Ord needs to make to build a sustainable competitive advantage.