Vita Group (VTG) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Technology)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Vita Group (Australia)
Based on various researches at Oak Spring University , Vita Group is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing commodity prices, wage bills are increasing,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Vita Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vita Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vita Group 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 Vita Group can be done for the following purposes –
1. Strategic planning of Vita Group
2. Improving business portfolio management of Vita Group
3. Assessing feasibility of the new initiative in Australia
4. Making a Retail (Technology) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vita Group
Strengths of Vita Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vita Group are -
Cross disciplinary teams
– Horizontal connected teams at the Vita Group 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.
Strong track record of project management in the Retail (Technology) industry
– Vita Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Vita Group has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Vita Group is one of the leading players in the Retail (Technology) 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.
Sustainable margins compare to other players in Retail (Technology) industry
– Vita Group has clearly differentiated products in the market place. This has enabled Vita Group to fetch slight price premium compare to the competitors in the Retail (Technology) industry. The sustainable margins have also helped Vita Group to invest into research and development (R&D) and innovation.
High brand equity
– Vita Group has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vita Group to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Vita Group is one of the most innovative firm in Retail (Technology) sector.
Operational resilience
– The operational resilience strategy of Vita Group comprises – understanding the underlying the factors in the Retail (Technology) 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.
Effective Research and Development (R&D)
– Vita Group has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Vita Group staying ahead in the Retail (Technology) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Vita Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Technology) industry. Secondly the value chain collaborators of Vita Group have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Vita Group has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vita Group 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.
Organizational Resilience of Vita Group
– The covid-19 pandemic has put organizational resilience at the centre of everthing Vita Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Vita Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vita Group are -
High operating costs
– Compare to the competitors, Vita Group has high operating costs in the Retail (Technology) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Vita Group lucrative customers.
Interest costs
– Compare to the competition, Vita Group 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.
Need for greater diversity
– Vita Group 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Vita Group supply chain. Even after few cautionary changes, Vita Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vita Group vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Vita Group, it seems that company is thinking out the frontier risks that can impact Retail (Technology) 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.
Employees’ less understanding of Vita Group strategy
– From the outside it seems that the employees of Vita Group 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 dependence on Vita Group ‘s star products
– The top 2 products and services of Vita Group still accounts for major business revenue. This dependence on star products in Retail (Technology) industry has resulted into insufficient focus on developing new products, even though Vita Group has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Vita Group is dominated by functional specialists. It is not different from other players in the Retail (Technology) industry, but Vita Group needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vita Group to focus more on services in the Retail (Technology) industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Vita Group is just above the Retail (Technology) 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.
Aligning sales with marketing
– From the outside it seems that Vita Group needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Technology) industry have deep experience in developing customer relationships. Marketing department at Vita Group can leverage the sales team experience to cultivate customer relationships as Vita Group is planning to shift buying processes online.
Products dominated business model
– Even though Vita Group has some of the most successful models in the Retail (Technology) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Vita Group should strive to include more intangible value offerings along with its core products and services.
Vita Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vita Group are -
Developing new processes and practices
– Vita Group can develop new processes and procedures in Retail (Technology) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vita Group 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 Vita Group to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Vita Group has opened avenues for new revenue streams for the organization in Retail (Technology) industry. This can help Vita Group to build a more holistic ecosystem for Vita Group products in the Retail (Technology) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Vita Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Technology) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vita Group 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. Vita Group 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Technology) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vita Group in the Retail (Technology) industry. Now Vita Group can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vita Group is facing challenges because of the dominance of functional experts in the organization. Vita Group can utilize new technology in the field of Retail (Technology) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Vita Group can use the latest technology developments to improve its manufacturing and designing process in Retail (Technology) 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.
Using analytics as competitive advantage
– Vita Group has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Technology) sector. This continuous investment in analytics has enabled Vita Group to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vita Group 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 Vita Group 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Technology) industry, but it has also influenced the consumer preferences. Vita Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vita Group can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vita Group 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.
Threats Vita Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vita Group are -
Increasing wage structure of Vita Group
– 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 Vita Group.
Easy access to finance
– Easy access to finance in Retail (Technology) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vita Group can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Vita Group has witnessed rapid integration of technology during Covid-19 in the Retail (Technology) industry. As one of the leading players in the industry, Vita Group needs to keep up with the evolution of technology in the Retail (Technology) 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.
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.
Consumer confidence and its impact on Vita Group 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 Retail (Technology) industry and other sectors.
High dependence on third party suppliers
– Vita Group 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.
Stagnating economy with rate increase
– Vita Group 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 Retail (Technology) industry.
Environmental challenges
– Vita Group 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. Vita Group can take advantage of this fund but it will also bring new competitors in the Retail (Technology) industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vita Group in Retail (Technology) industry. The Retail (Technology) 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.
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 Vita Group.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Vita Group may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Technology) sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Technology) industry are lowering. It can presents Vita Group with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Technology) sector.
Weighted SWOT Analysis of Vita Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Vita Group 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 Vita Group 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 Vita Group 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 Vita Group 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 Vita Group needs to make to build a sustainable competitive advantage.