Electro Optic Systems Holdings (EOS) SWOT Analysis / TOWS Matrix / MBA Resources
Aerospace & Defense
Strategy / 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 – central banks are concerned over increasing inflation, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is increasing trade war between United States & China,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
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.
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
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 -
Sustainable margins compare to other players in Aerospace & Defense industry
– Electro Optic Systems Holdings has clearly differentiated products in the market place. This has enabled Electro Optic Systems Holdings to fetch slight price premium compare to the competitors in the Aerospace & Defense industry. The sustainable margins have also helped Electro Optic Systems Holdings to invest into research and development (R&D) and innovation.
Organizational Resilience of Electro Optic Systems Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing Electro Optic Systems Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Electro Optic Systems Holdings 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.
Highly skilled collaborators
– Electro Optic Systems Holdings has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Aerospace & Defense industry. Secondly the value chain collaborators of Electro Optic Systems Holdings have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Electro Optic Systems Holdings 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 Electro Optic Systems Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Electro Optic Systems Holdings emphasize – knowledge, initiative, and innovation.
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 -
No frontier risks strategy
– From the 10K / annual statement of Electro Optic Systems Holdings, it seems that company is thinking out the frontier risks that can impact Aerospace & Defense 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 operating costs
– Compare to the competitors, Electro Optic Systems Holdings has high operating costs in the Aerospace & Defense industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Electro Optic Systems Holdings lucrative customers.
Low market penetration in new markets
– Outside its home market of Australia, Electro Optic Systems Holdings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
High dependence on Electro Optic Systems Holdings ‘s star products
– The top 2 products and services of Electro Optic Systems Holdings still accounts for major business revenue. This dependence on star products in Aerospace & Defense industry has resulted into insufficient focus on developing new products, even though Electro Optic Systems Holdings has relatively successful track record of launching new products.
Skills based hiring in Aerospace & Defense industry
– The stress on hiring functional specialists at Electro Optic Systems Holdings 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 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.
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.
Products dominated business model
– Even though Electro Optic Systems Holdings has some of the most successful models in the Aerospace & Defense industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Electro Optic Systems Holdings should strive to include more intangible value offerings along with its core products and services.
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 -
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.
Buying journey improvements
– Electro Optic Systems Holdings can improve the customer journey of consumers in the Aerospace & Defense 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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Aerospace & Defense industry, but it has also influenced the consumer preferences. Electro Optic Systems Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Learning at scale
– Online learning technologies has now opened space for Electro Optic Systems Holdings 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.
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.
Loyalty marketing
– Electro Optic Systems Holdings 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Electro Optic Systems Holdings 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.
Better consumer reach
– The expansion of the 5G network will help Electro Optic Systems Holdings to increase its market reach. Electro Optic Systems Holdings 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.
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 -
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 Electro Optic Systems Holdings business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Easy access to finance
– Easy access to finance in Aerospace & Defense industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Electro Optic Systems Holdings can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
High dependence on third party suppliers
– Electro Optic Systems Holdings 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.
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.
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.
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. Electro Optic Systems Holdings 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.
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.
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.
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.
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.
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.