Tredegar (TG) SWOT Analysis / TOWS Matrix / MBA Resources
Fabricated Plastic & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Tredegar (United States)
Based on various researches at Oak Spring University , Tredegar is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing energy prices, there is backlash against globalization, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, increasing commodity prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tredegar can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tredegar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tredegar 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 Tredegar can be done for the following purposes –
1. Strategic planning of Tredegar
2. Improving business portfolio management of Tredegar
3. Assessing feasibility of the new initiative in United States
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tredegar
Strengths of Tredegar | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tredegar are -
Low bargaining power of suppliers
– Suppliers of Tredegar in the Basic Materials sector have low bargaining power. Tredegar has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tredegar to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Tredegar is present in almost all the verticals within the Fabricated Plastic & Rubber industry. This has provided Tredegar 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.
Digital Transformation in Fabricated Plastic & Rubber industry
- digital transformation varies from industry to industry. For Tredegar digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tredegar 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.
Innovation driven organization
– Tredegar is one of the most innovative firm in Fabricated Plastic & Rubber sector.
Superior customer experience
– The customer experience strategy of Tredegar in Fabricated Plastic & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Tredegar has one of the best training and development program in Basic Materials 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.
Highly skilled collaborators
– Tredegar has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fabricated Plastic & Rubber industry. Secondly the value chain collaborators of Tredegar have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Tredegar has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tredegar staying ahead in the Fabricated Plastic & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Tredegar 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 Fabricated Plastic & Rubber 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.
High switching costs
– The high switching costs that Tredegar 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 Fabricated Plastic & Rubber industry
– Tredegar has clearly differentiated products in the market place. This has enabled Tredegar to fetch slight price premium compare to the competitors in the Fabricated Plastic & Rubber industry. The sustainable margins have also helped Tredegar to invest into research and development (R&D) and innovation.
Ability to lead change in Fabricated Plastic & Rubber
– Tredegar is one of the leading players in the Fabricated Plastic & Rubber industry in United States. Over the years it has not only transformed the business landscape in the Fabricated Plastic & Rubber industry in United States but also across the existing markets. The ability to lead change has enabled Tredegar in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Tredegar | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tredegar are -
Interest costs
– Compare to the competition, Tredegar has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on Tredegar ‘s star products
– The top 2 products and services of Tredegar still accounts for major business revenue. This dependence on star products in Fabricated Plastic & Rubber industry has resulted into insufficient focus on developing new products, even though Tredegar has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Tredegar, it seems that company is thinking out the frontier risks that can impact Fabricated Plastic & Rubber 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 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 Tredegar supply chain. Even after few cautionary changes, Tredegar is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tredegar vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Tredegar has a high cash cycle compare to other players in the Fabricated Plastic & Rubber 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 Tredegar is dominated by functional specialists. It is not different from other players in the Fabricated Plastic & Rubber industry, but Tredegar needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tredegar to focus more on services in the Fabricated Plastic & Rubber industry rather than just following the product oriented approach.
High bargaining power of channel partners in Fabricated Plastic & Rubber industry
– because of the regulatory requirements in United States, Tredegar 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 Fabricated Plastic & Rubber industry.
Products dominated business model
– Even though Tredegar has some of the most successful models in the Fabricated Plastic & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Tredegar should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Tredegar 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 Fabricated Plastic & Rubber industry using digital technology.
High operating costs
– Compare to the competitors, Tredegar has high operating costs in the Fabricated Plastic & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tredegar lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tredegar is slow explore the new channels of communication. These new channels of communication can help Tredegar to provide better information regarding Fabricated Plastic & Rubber products and services. It can also build an online community to further reach out to potential customers.
Tredegar Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tredegar are -
Learning at scale
– Online learning technologies has now opened space for Tredegar 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Fabricated Plastic & Rubber industry, but it has also influenced the consumer preferences. Tredegar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tredegar 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 Tredegar 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, Tredegar is facing challenges because of the dominance of functional experts in the organization. Tredegar can utilize new technology in the field of Fabricated Plastic & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Tredegar 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.
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 Tredegar 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.
Better consumer reach
– The expansion of the 5G network will help Tredegar to increase its market reach. Tredegar 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tredegar 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.
Developing new processes and practices
– Tredegar can develop new processes and procedures in Fabricated Plastic & Rubber 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Fabricated Plastic & Rubber industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tredegar 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. Tredegar 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.
Using analytics as competitive advantage
– Tredegar has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Fabricated Plastic & Rubber sector. This continuous investment in analytics has enabled Tredegar to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tredegar to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tredegar can use these opportunities to build new business models that can help the communities that Tredegar operates in. Secondly it can use opportunities from government spending in Fabricated Plastic & Rubber sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tredegar 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 Tredegar to hire the very best people irrespective of their geographical location.
Threats Tredegar External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tredegar are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Tredegar may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fabricated Plastic & Rubber sector.
Stagnating economy with rate increase
– Tredegar 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 Fabricated Plastic & Rubber industry.
Consumer confidence and its impact on Tredegar 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 Fabricated Plastic & Rubber 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 Tredegar.
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.
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 Tredegar in the Fabricated Plastic & Rubber sector and impact the bottomline of the organization.
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 Tredegar is facing in Fabricated Plastic & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Tredegar
– 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 Tredegar.
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. Tredegar needs to understand the core reasons impacting the Fabricated Plastic & Rubber industry. This will help it in building a better workplace.
Regulatory challenges
– Tredegar 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 Fabricated Plastic & Rubber industry regulations.
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 Tredegar business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Tredegar 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. Tredegar can take advantage of this fund but it will also bring new competitors in the Fabricated Plastic & Rubber industry.
Weighted SWOT Analysis of Tredegar Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tredegar 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 Tredegar 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 Tredegar 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 Tredegar 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 Tredegar needs to make to build a sustainable competitive advantage.