Stargroup (STL) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Stargroup (Australia)

Based on various researches at Oak Spring University , Stargroup is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, wage bills are increasing, technology disruption, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, geopolitical disruptions, etc

---

---

---

---

Introduction to SWOT Analysis of Stargroup

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

---

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

The strengths of Stargroup are -

Digital Transformation in Office Equipment industry

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

Highly skilled collaborators

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

Learning organization

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

Cross disciplinary teams

– Horizontal connected teams at the Stargroup 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.

Innovation driven organization

– Stargroup is one of the most innovative firm in Office Equipment sector.

Diverse revenue streams

– Stargroup is present in almost all the verticals within the Office Equipment industry. This has provided Stargroup 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.

Ability to lead change in Office Equipment

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

High switching costs

– The high switching costs that Stargroup 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.

Successful track record of launching new products

– Stargroup has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Stargroup 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 Office Equipment industry

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

Organizational Resilience of Stargroup

– The covid-19 pandemic has put organizational resilience at the centre of everthing Stargroup does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Low bargaining power of suppliers

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

---

---

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

The weaknesses of Stargroup are -

Slow to harness new channels of communication

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

Lack of clear differentiation of Stargroup products

– To increase the profitability and margins on the products, Stargroup needs to provide more differentiated products than what it is currently offering in the marketplace.

Products dominated business model

– Even though Stargroup has some of the most successful models in the Office Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Stargroup should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

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

Increasing silos among functional specialists

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

Employees’ less understanding of Stargroup strategy

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

High bargaining power of channel partners in Office Equipment industry

– because of the regulatory requirements in Australia, Stargroup 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 Office Equipment industry.

Slow decision making process

– As mentioned earlier in the report, Stargroup has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Equipment industry over the last five years. Stargroup even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Skills based hiring in Office Equipment industry

– The stress on hiring functional specialists at Stargroup 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.

High operating costs

– Compare to the competitors, Stargroup has high operating costs in the Office Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Stargroup lucrative customers.

High dependence on Stargroup ‘s star products

– The top 2 products and services of Stargroup still accounts for major business revenue. This dependence on star products in Office Equipment industry has resulted into insufficient focus on developing new products, even though Stargroup has relatively successful track record of launching new products.

---

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

The opportunities of Stargroup are -

Low interest rates

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

Building a culture of innovation

– managers at Stargroup 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 Office Equipment industry.

Harnessing reconfiguration of the global supply chains

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

Using analytics as competitive advantage

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

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 Stargroup 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.

Loyalty marketing

– Stargroup 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.

Learning at scale

– Online learning technologies has now opened space for Stargroup 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.

Better consumer reach

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

Manufacturing automation

– Stargroup can use the latest technology developments to improve its manufacturing and designing process in Office 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.

Remote work and new talent hiring opportunities

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

Finding new ways to collaborate

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

Use of Bitcoin and other crypto currencies for transactions in Office Equipment industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Stargroup in the Office Equipment industry. Now Stargroup can target international markets with far fewer capital restrictions requirements than the existing system.

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. Stargroup can explore opportunities that can attract volunteers and are consistent with its mission and vision.

---

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

The threats of Stargroup are -

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. Stargroup 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Stargroup may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Equipment sector.

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 Stargroup business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Stargroup is facing in Office Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Stargroup

– 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 Stargroup.

High dependence on third party suppliers

– Stargroup 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.

Consumer confidence and its impact on Stargroup 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 Office Equipment industry and other sectors.

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.

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 Stargroup in the Office Equipment sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Stargroup in Office Equipment industry. The Office Equipment 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, Stargroup 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 Stargroup prominent markets.

Technology acceleration in Forth Industrial Revolution

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

Environmental challenges

– Stargroup 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. Stargroup can take advantage of this fund but it will also bring new competitors in the Office Equipment industry.

---

Weighted SWOT Analysis of Stargroup Template, Example

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

--- ---