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 – wage bills are increasing, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc

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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.

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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

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

The strengths of Stargroup are -

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.

Ability to recruit top talent

– Stargroup is one of the leading players in the Office Equipment 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.

Analytics focus

– Stargroup 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 Office Equipment 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.

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.

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.

Effective Research and Development (R&D)

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

Sustainable margins compare to other players in Office Equipment industry

– Stargroup has clearly differentiated products in the market place. This has enabled Stargroup to fetch slight price premium compare to the competitors in the Office Equipment industry. The sustainable margins have also helped Stargroup to invest into research and development (R&D) and innovation.

Innovation driven organization

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

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.

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.

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.

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

The weaknesses of Stargroup are -

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.

Need for greater diversity

– Stargroup has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Capital Spending Reduction

– Even during the low interest decade, Stargroup 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 Office Equipment industry using digital technology.

Interest costs

– Compare to the competition, Stargroup 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.

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.

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.

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.

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.

Compensation and incentives

– The revenue per employee of Stargroup is just above the Office 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.

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.

Low market penetration in new markets

– Outside its home market of Australia, Stargroup needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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

The opportunities of Stargroup are -

Creating value in data economy

– The success of analytics program of Stargroup has opened avenues for new revenue streams for the organization in Office Equipment industry. This can help Stargroup to build a more holistic ecosystem for Stargroup products in the Office Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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.

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.

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.

Leveraging digital technologies

– Stargroup 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.

Developing new processes and practices

– Stargroup can develop new processes and procedures in Office Equipment 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.

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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Stargroup can use these opportunities to build new business models that can help the communities that Stargroup operates in. Secondly it can use opportunities from government spending in Office Equipment sector.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Stargroup is facing challenges because of the dominance of functional experts in the organization. Stargroup can utilize new technology in the field of Office Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Buying journey improvements

– Stargroup can improve the customer journey of consumers in the Office 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.

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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Stargroup can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Stargroup in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Office Equipment industry, and it will provide faster access to the consumers.

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

The threats of Stargroup are -

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.

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.

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.

Easy access to finance

– Easy access to finance in Office Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Stargroup can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

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.

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.

Stagnating economy with rate increase

– Stargroup 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 Office Equipment industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Office Equipment industry are lowering. It can presents Stargroup with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Equipment sector.

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. Stargroup needs to understand the core reasons impacting the Office Equipment industry. This will help it in building a better workplace.

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.

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.

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.

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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.

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