Sykes (SYKE) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sykes (United States)

Based on various researches at Oak Spring University , Sykes is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing commodity prices, etc

---

---

---

---

Introduction to SWOT Analysis of Sykes

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

---

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

The strengths of Sykes are -

Sustainable margins compare to other players in Computer Networks industry

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

Strong track record of project management in the Computer Networks industry

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

High brand equity

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

Superior customer experience

– The customer experience strategy of Sykes in Computer Networks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Sykes 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.

Highly skilled collaborators

– Sykes has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Networks industry. Secondly the value chain collaborators of Sykes have helped the firm to develop new products and bring them quickly to the marketplace.

Innovation driven organization

– Sykes is one of the most innovative firm in Computer Networks sector.

Ability to lead change in Computer Networks

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

Effective Research and Development (R&D)

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

Learning organization

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

Operational resilience

– The operational resilience strategy of Sykes comprises – understanding the underlying the factors in the Computer Networks 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.

Low bargaining power of suppliers

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

---

---

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

The weaknesses of Sykes are -

Slow to strategic competitive environment developments

– As Sykes is one of the leading players in the Computer Networks industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Networks industry in last five years.

Compensation and incentives

– The revenue per employee of Sykes is just above the Computer Networks 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.

High bargaining power of channel partners in Computer Networks industry

– because of the regulatory requirements in United States, Sykes is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Computer Networks industry.

Slow decision making process

– As mentioned earlier in the report, Sykes 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 Networks industry over the last five years. Sykes 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.

Slow to harness new channels of communication

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

Need for greater diversity

– Sykes 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

Sykes has a high cash cycle compare to other players in the Computer Networks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Capital Spending Reduction

– Even during the low interest decade, Sykes 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 Networks industry using digital technology.

Employees’ less understanding of Sykes strategy

– From the outside it seems that the employees of Sykes 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.

Skills based hiring in Computer Networks industry

– The stress on hiring functional specialists at Sykes 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.

Aligning sales with marketing

– From the outside it seems that Sykes needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Networks industry have deep experience in developing customer relationships. Marketing department at Sykes can leverage the sales team experience to cultivate customer relationships as Sykes is planning to shift buying processes online.

---

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

The opportunities of Sykes are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Computer Networks industry, but it has also influenced the consumer preferences. Sykes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Low interest rates

– Even though inflation is raising its head in most developed economies, Sykes 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Sykes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Developing new processes and practices

– Sykes can develop new processes and procedures in Computer Networks 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.

Building a culture of innovation

– managers at Sykes 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 Networks industry.

Redefining models of collaboration and team work

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

Better consumer reach

– The expansion of the 5G network will help Sykes to increase its market reach. Sykes 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.

Increase in government spending

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

Loyalty marketing

– Sykes 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Sykes 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 Networks industry, and it will provide faster access to the consumers.

Using analytics as competitive advantage

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

Buying journey improvements

– Sykes can improve the customer journey of consumers in the Computer Networks 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.

Remote work and new talent hiring opportunities

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

---

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

The threats of Sykes 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. Sykes needs to understand the core reasons impacting the Computer Networks industry. This will help it in building a better workplace.

Increasing international competition and downward pressure on margins

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

High dependence on third party suppliers

– Sykes 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 Computer Networks industry are lowering. It can presents Sykes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Networks 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 Sykes in the Computer Networks sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Sykes in Computer Networks industry. The Computer Networks 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Sykes 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 Networks sector.

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. Sykes 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.

Technology acceleration in Forth Industrial Revolution

– Sykes has witnessed rapid integration of technology during Covid-19 in the Computer Networks industry. As one of the leading players in the industry, Sykes needs to keep up with the evolution of technology in the Computer Networks 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.

Easy access to finance

– Easy access to finance in Computer Networks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sykes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Environmental challenges

– Sykes 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. Sykes can take advantage of this fund but it will also bring new competitors in the Computer Networks industry.

Consumer confidence and its impact on Sykes 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 Networks 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 Sykes.

---

Weighted SWOT Analysis of Sykes Template, Example

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

--- ---