SWOT Analysis / TOWS Matrix for Fiberhome Telecom (China)
Based on various researches at Oak Spring University , Fiberhome Telecom is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
geopolitical disruptions, increasing energy prices, etc
Introduction to SWOT Analysis of Fiberhome Telecom
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fiberhome Telecom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fiberhome Telecom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fiberhome Telecom 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 Fiberhome Telecom can be done for the following purposes –
1. Strategic planning of Fiberhome Telecom
2. Improving business portfolio management of Fiberhome Telecom
3. Assessing feasibility of the new initiative in China
4. Making a Communications Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fiberhome Telecom
Strengths of Fiberhome Telecom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fiberhome Telecom are -
Digital Transformation in Communications Equipment industry
- digital transformation varies from industry to industry. For Fiberhome Telecom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fiberhome Telecom 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.
Strong track record of project management in the Communications Equipment industry
– Fiberhome Telecom is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Fiberhome Telecom has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Fiberhome Telecom staying ahead in the Communications Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Fiberhome Telecom has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Equipment industry. Secondly the value chain collaborators of Fiberhome Telecom have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Communications Equipment
– Fiberhome Telecom is one of the leading players in the Communications Equipment industry in China. Over the years it has not only transformed the business landscape in the Communications Equipment industry in China but also across the existing markets. The ability to lead change has enabled Fiberhome Telecom in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Fiberhome Telecom is one of the most innovative firm in Communications Equipment sector.
Sustainable margins compare to other players in Communications Equipment industry
– Fiberhome Telecom has clearly differentiated products in the market place. This has enabled Fiberhome Telecom to fetch slight price premium compare to the competitors in the Communications Equipment industry. The sustainable margins have also helped Fiberhome Telecom to invest into research and development (R&D) and innovation.
Learning organization
- Fiberhome Telecom 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 Fiberhome Telecom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Fiberhome Telecom emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Fiberhome Telecom
– The covid-19 pandemic has put organizational resilience at the centre of everthing Fiberhome Telecom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Fiberhome Telecom 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.
High switching costs
– The high switching costs that Fiberhome Telecom 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.
Operational resilience
– The operational resilience strategy of Fiberhome Telecom comprises – understanding the underlying the factors in the Communications Equipment 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.
Weaknesses of Fiberhome Telecom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fiberhome Telecom are -
Ability to respond to the competition
– As the decision making is very deliberative at Fiberhome Telecom, in the dynamic environment of Communications Equipment industry it has struggled to respond to the nimble upstart competition. Fiberhome Telecom has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Fiberhome Telecom needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Equipment industry have deep experience in developing customer relationships. Marketing department at Fiberhome Telecom can leverage the sales team experience to cultivate customer relationships as Fiberhome Telecom is planning to shift buying processes online.
Products dominated business model
– Even though Fiberhome Telecom has some of the most successful models in the Communications Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Fiberhome Telecom should strive to include more intangible value offerings along with its core products and services.
High dependence on Fiberhome Telecom ‘s star products
– The top 2 products and services of Fiberhome Telecom still accounts for major business revenue. This dependence on star products in Communications Equipment industry has resulted into insufficient focus on developing new products, even though Fiberhome Telecom has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Fiberhome Telecom is dominated by functional specialists. It is not different from other players in the Communications Equipment industry, but Fiberhome Telecom needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fiberhome Telecom to focus more on services in the Communications Equipment industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Fiberhome Telecom has high operating costs in the Communications Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fiberhome Telecom lucrative customers.
Low market penetration in new markets
– Outside its home market of China, Fiberhome Telecom needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Fiberhome Telecom supply chain. Even after few cautionary changes, Fiberhome Telecom is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fiberhome Telecom vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Fiberhome Telecom is just above the Communications Equipment 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.
Skills based hiring in Communications Equipment industry
– The stress on hiring functional specialists at Fiberhome Telecom 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fiberhome Telecom is slow explore the new channels of communication. These new channels of communication can help Fiberhome Telecom to provide better information regarding Communications Equipment products and services. It can also build an online community to further reach out to potential customers.
Fiberhome Telecom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Fiberhome Telecom are -
Loyalty marketing
– Fiberhome Telecom 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.
Buying journey improvements
– Fiberhome Telecom can improve the customer journey of consumers in the Communications Equipment 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.
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 Fiberhome Telecom 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fiberhome Telecom is facing challenges because of the dominance of functional experts in the organization. Fiberhome Telecom can utilize new technology in the field of Communications Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Fiberhome Telecom can use the latest technology developments to improve its manufacturing and designing process in Communications Equipment 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.
Better consumer reach
– The expansion of the 5G network will help Fiberhome Telecom to increase its market reach. Fiberhome Telecom 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 Fiberhome Telecom 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 Communications Equipment industry.
Use of Bitcoin and other crypto currencies for transactions in Communications Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Fiberhome Telecom in the Communications Equipment industry. Now Fiberhome Telecom can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fiberhome Telecom can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Fiberhome Telecom has opened avenues for new revenue streams for the organization in Communications Equipment industry. This can help Fiberhome Telecom to build a more holistic ecosystem for Fiberhome Telecom products in the Communications Equipment 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 Communications Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fiberhome Telecom 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. Fiberhome Telecom 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, Fiberhome Telecom can use these opportunities to build new business models that can help the communities that Fiberhome Telecom operates in. Secondly it can use opportunities from government spending in Communications Equipment sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Equipment industry, but it has also influenced the consumer preferences. Fiberhome Telecom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Fiberhome Telecom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Fiberhome Telecom are -
Consumer confidence and its impact on Fiberhome Telecom 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 Communications Equipment industry and other sectors.
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. Fiberhome Telecom 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
– Fiberhome Telecom 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 Communications Equipment industry.
Environmental challenges
– Fiberhome Telecom 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. Fiberhome Telecom can take advantage of this fund but it will also bring new competitors in the Communications Equipment industry.
Easy access to finance
– Easy access to finance in Communications Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fiberhome Telecom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Communications Equipment industry are lowering. It can presents Fiberhome Telecom with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Equipment 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 Fiberhome Telecom in the Communications Equipment sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fiberhome Telecom 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 Fiberhome Telecom prominent markets.
High dependence on third party suppliers
– Fiberhome Telecom 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.
Technology acceleration in Forth Industrial Revolution
– Fiberhome Telecom has witnessed rapid integration of technology during Covid-19 in the Communications Equipment industry. As one of the leading players in the industry, Fiberhome Telecom needs to keep up with the evolution of technology in the Communications Equipment 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.
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 Fiberhome Telecom business can come under increasing regulations regarding data privacy, data security, etc.
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 Fiberhome Telecom.
Shortening product life cycle
– it is one of the major threat that Fiberhome Telecom is facing in Communications Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Fiberhome Telecom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fiberhome Telecom 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 Fiberhome Telecom 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 Fiberhome Telecom 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 Fiberhome Telecom 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 Fiberhome Telecom needs to make to build a sustainable competitive advantage.
