Electro Optic Systems Holdings (EOS) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Electro Optic Systems Holdings (Australia)

Based on various researches at Oak Spring University , Electro Optic Systems Holdings is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing energy prices, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Electro Optic Systems Holdings

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Electro Optic Systems Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Electro Optic Systems Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Electro Optic Systems Holdings 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Electro Optic Systems Holdings can be done for the following purposes –
1. Strategic planning of Electro Optic Systems Holdings
2. Improving business portfolio management of Electro Optic Systems Holdings
3. Assessing feasibility of the new initiative in Australia
4. Making a Aerospace & Defense sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Electro Optic Systems Holdings

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Strengths of Electro Optic Systems Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Electro Optic Systems Holdings are -

Ability to lead change in Aerospace & Defense

– Electro Optic Systems Holdings is one of the leading players in the Aerospace & Defense industry in Australia. Over the years it has not only transformed the business landscape in the Aerospace & Defense industry in Australia but also across the existing markets. The ability to lead change has enabled Electro Optic Systems Holdings in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– Electro Optic Systems Holdings is one of the leading players in the Aerospace & Defense industry in Australia. It is in a position to attract the best talent available in Australia. The firm has a robust talent identification program that helps in identifying the brightest.

Operational resilience

– The operational resilience strategy of Electro Optic Systems Holdings comprises – understanding the underlying the factors in the Aerospace & Defense 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.

High switching costs

– The high switching costs that Electro Optic Systems Holdings 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.

High brand equity

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

Digital Transformation in Aerospace & Defense industry

- digital transformation varies from industry to industry. For Electro Optic Systems Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Electro Optic Systems Holdings 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.

Successful track record of launching new products

– Electro Optic Systems Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Electro Optic Systems Holdings 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.

Innovation driven organization

– Electro Optic Systems Holdings is one of the most innovative firm in Aerospace & Defense sector.

Effective Research and Development (R&D)

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

Analytics focus

– Electro Optic Systems Holdings 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 Aerospace & Defense industry. The technology infrastructure of Australia 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.

Strong track record of project management in the Aerospace & Defense industry

– Electro Optic Systems Holdings 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

– Electro Optic Systems Holdings is present in almost all the verticals within the Aerospace & Defense industry. This has provided Electro Optic Systems Holdings 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.

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Weaknesses of Electro Optic Systems Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Electro Optic Systems Holdings are -

Increasing silos among functional specialists

– The organizational structure of Electro Optic Systems Holdings is dominated by functional specialists. It is not different from other players in the Aerospace & Defense industry, but Electro Optic Systems Holdings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Electro Optic Systems Holdings to focus more on services in the Aerospace & Defense industry rather than just following the product oriented approach.

Slow to strategic competitive environment developments

– As Electro Optic Systems Holdings is one of the leading players in the Aerospace & Defense industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Aerospace & Defense industry in last five years.

Ability to respond to the competition

– As the decision making is very deliberative at Electro Optic Systems Holdings, in the dynamic environment of Aerospace & Defense industry it has struggled to respond to the nimble upstart competition. Electro Optic Systems Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Compensation and incentives

– The revenue per employee of Electro Optic Systems Holdings is just above the Aerospace & Defense 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 cash cycle compare to competitors

Electro Optic Systems Holdings has a high cash cycle compare to other players in the Aerospace & Defense 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, Electro Optic Systems Holdings 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 Aerospace & Defense industry using digital technology.

High bargaining power of channel partners in Aerospace & Defense industry

– because of the regulatory requirements in Australia, Electro Optic Systems Holdings 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 Aerospace & Defense industry.

Workers concerns about automation

– As automation is fast increasing in the Aerospace & Defense industry, Electro Optic Systems Holdings 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.

Employees’ less understanding of Electro Optic Systems Holdings strategy

– From the outside it seems that the employees of Electro Optic Systems Holdings 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.

Interest costs

– Compare to the competition, Electro Optic Systems Holdings 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.

Slow to harness new channels of communication

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

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Electro Optic Systems Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Electro Optic Systems Holdings are -

Use of Bitcoin and other crypto currencies for transactions in Aerospace & Defense industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Electro Optic Systems Holdings in the Aerospace & Defense industry. Now Electro Optic Systems Holdings can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at Electro Optic Systems Holdings 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 Aerospace & Defense industry.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Electro Optic Systems Holdings 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 Electro Optic Systems Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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. Electro Optic Systems Holdings can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Electro Optic Systems Holdings is facing challenges because of the dominance of functional experts in the organization. Electro Optic Systems Holdings can utilize new technology in the field of Aerospace & Defense 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 Electro Optic Systems Holdings has opened avenues for new revenue streams for the organization in Aerospace & Defense industry. This can help Electro Optic Systems Holdings to build a more holistic ecosystem for Electro Optic Systems Holdings products in the Aerospace & Defense industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– Electro Optic Systems Holdings can use the latest technology developments to improve its manufacturing and designing process in Aerospace & Defense 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.

Developing new processes and practices

– Electro Optic Systems Holdings can develop new processes and procedures in Aerospace & Defense 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, Electro Optic Systems Holdings can use these opportunities to build new business models that can help the communities that Electro Optic Systems Holdings operates in. Secondly it can use opportunities from government spending in Aerospace & Defense sector.

Remote work and new talent hiring opportunities

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

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Aerospace & Defense industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Electro Optic Systems Holdings 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. Electro Optic Systems Holdings 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

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

Leveraging digital technologies

– Electro Optic Systems Holdings 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.

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Threats Electro Optic Systems Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Electro Optic Systems Holdings are -

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Aerospace & Defense industry are lowering. It can presents Electro Optic Systems Holdings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Aerospace & Defense sector.

Stagnating economy with rate increase

– Electro Optic Systems Holdings 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 Aerospace & Defense industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Electro Optic Systems Holdings in Aerospace & Defense industry. The Aerospace & Defense 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Electro Optic Systems Holdings 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 Electro Optic Systems Holdings prominent markets.

Technology acceleration in Forth Industrial Revolution

– Electro Optic Systems Holdings has witnessed rapid integration of technology during Covid-19 in the Aerospace & Defense industry. As one of the leading players in the industry, Electro Optic Systems Holdings needs to keep up with the evolution of technology in the Aerospace & Defense 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.

Environmental challenges

– Electro Optic Systems Holdings 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. Electro Optic Systems Holdings can take advantage of this fund but it will also bring new competitors in the Aerospace & Defense industry.

Regulatory challenges

– Electro Optic Systems Holdings 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 Aerospace & Defense 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. Electro Optic Systems Holdings needs to understand the core reasons impacting the Aerospace & Defense industry. This will help it in building a better workplace.

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 Electro Optic Systems Holdings.

Increasing wage structure of Electro Optic Systems Holdings

– 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 Electro Optic Systems Holdings.

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, Electro Optic Systems Holdings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Aerospace & Defense 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 Electro Optic Systems Holdings in the Aerospace & Defense sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of Electro Optic Systems Holdings Template, Example

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

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