SWOT Analysis / TOWS Matrix for Mcpherson'S Ltd (Australia)
Based on various researches at Oak Spring University , Mcpherson'S Ltd is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, there is backlash against globalization, geopolitical disruptions, central banks are concerned over increasing inflation, increasing energy prices, increasing commodity prices, technology disruption,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mcpherson'S Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mcpherson'S Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mcpherson'S Ltd 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 Mcpherson'S Ltd can be done for the following purposes –
1. Strategic planning of Mcpherson'S Ltd
2. Improving business portfolio management of Mcpherson'S Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Jewelry & Silverware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mcpherson'S Ltd
Strengths of Mcpherson'S Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mcpherson'S Ltd are -
Diverse revenue streams
– Mcpherson'S Ltd is present in almost all the verticals within the Jewelry & Silverware industry. This has provided Mcpherson'S Ltd 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.
Digital Transformation in Jewelry & Silverware industry
- digital transformation varies from industry to industry. For Mcpherson'S Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mcpherson'S Ltd 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.
Low bargaining power of suppliers
– Suppliers of Mcpherson'S Ltd in the Consumer Cyclical sector have low bargaining power. Mcpherson'S Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mcpherson'S Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Jewelry & Silverware industry
– Mcpherson'S Ltd has clearly differentiated products in the market place. This has enabled Mcpherson'S Ltd to fetch slight price premium compare to the competitors in the Jewelry & Silverware industry. The sustainable margins have also helped Mcpherson'S Ltd to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Mcpherson'S Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mcpherson'S Ltd staying ahead in the Jewelry & Silverware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Mcpherson'S Ltd 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 Jewelry & Silverware 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.
High brand equity
– Mcpherson'S Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mcpherson'S Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Mcpherson'S Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Mcpherson'S Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Mcpherson'S Ltd comprises – understanding the underlying the factors in the Jewelry & Silverware 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.
Learning organization
- Mcpherson'S Ltd 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 Mcpherson'S Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Mcpherson'S Ltd emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Mcpherson'S Ltd 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.
Ability to recruit top talent
– Mcpherson'S Ltd is one of the leading players in the Jewelry & Silverware 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.
Weaknesses of Mcpherson'S Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mcpherson'S Ltd are -
Low market penetration in new markets
– Outside its home market of Australia, Mcpherson'S Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Mcpherson'S Ltd is dominated by functional specialists. It is not different from other players in the Jewelry & Silverware industry, but Mcpherson'S Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mcpherson'S Ltd to focus more on services in the Jewelry & Silverware industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Mcpherson'S Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Jewelry & Silverware industry over the last five years. Mcpherson'S Ltd 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.
Workers concerns about automation
– As automation is fast increasing in the Jewelry & Silverware industry, Mcpherson'S Ltd 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.
Lack of clear differentiation of Mcpherson'S Ltd products
– To increase the profitability and margins on the products, Mcpherson'S Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Mcpherson'S Ltd has high operating costs in the Jewelry & Silverware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mcpherson'S Ltd lucrative customers.
High cash cycle compare to competitors
Mcpherson'S Ltd has a high cash cycle compare to other players in the Jewelry & Silverware industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Mcpherson'S Ltd 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.
Ability to respond to the competition
– As the decision making is very deliberative at Mcpherson'S Ltd, in the dynamic environment of Jewelry & Silverware industry it has struggled to respond to the nimble upstart competition. Mcpherson'S Ltd 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 Mcpherson'S Ltd is just above the Jewelry & Silverware 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.
No frontier risks strategy
– From the 10K / annual statement of Mcpherson'S Ltd, it seems that company is thinking out the frontier risks that can impact Jewelry & Silverware 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.
Mcpherson'S Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mcpherson'S Ltd are -
Creating value in data economy
– The success of analytics program of Mcpherson'S Ltd has opened avenues for new revenue streams for the organization in Jewelry & Silverware industry. This can help Mcpherson'S Ltd to build a more holistic ecosystem for Mcpherson'S Ltd products in the Jewelry & Silverware industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Mcpherson'S Ltd can improve the customer journey of consumers in the Jewelry & Silverware 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.
Learning at scale
– Online learning technologies has now opened space for Mcpherson'S Ltd 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.
Loyalty marketing
– Mcpherson'S Ltd 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.
Use of Bitcoin and other crypto currencies for transactions in Jewelry & Silverware industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mcpherson'S Ltd in the Jewelry & Silverware industry. Now Mcpherson'S Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Mcpherson'S Ltd can develop new processes and procedures in Jewelry & Silverware 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Jewelry & Silverware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mcpherson'S Ltd 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. Mcpherson'S Ltd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Jewelry & Silverware industry, but it has also influenced the consumer preferences. Mcpherson'S Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mcpherson'S Ltd is facing challenges because of the dominance of functional experts in the organization. Mcpherson'S Ltd can utilize new technology in the field of Jewelry & Silverware industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Mcpherson'S Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Jewelry & Silverware sector. This continuous investment in analytics has enabled Mcpherson'S Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mcpherson'S Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mcpherson'S Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Jewelry & Silverware industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Mcpherson'S Ltd 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 Jewelry & Silverware industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mcpherson'S Ltd can use these opportunities to build new business models that can help the communities that Mcpherson'S Ltd operates in. Secondly it can use opportunities from government spending in Jewelry & Silverware sector.
Threats Mcpherson'S Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mcpherson'S Ltd are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mcpherson'S Ltd in Jewelry & Silverware industry. The Jewelry & Silverware 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.
High dependence on third party suppliers
– Mcpherson'S Ltd 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Jewelry & Silverware industry are lowering. It can presents Mcpherson'S Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Jewelry & Silverware sector.
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.
Easy access to finance
– Easy access to finance in Jewelry & Silverware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mcpherson'S Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Mcpherson'S Ltd is facing in Jewelry & Silverware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Mcpherson'S Ltd has witnessed rapid integration of technology during Covid-19 in the Jewelry & Silverware industry. As one of the leading players in the industry, Mcpherson'S Ltd needs to keep up with the evolution of technology in the Jewelry & Silverware 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
– Mcpherson'S Ltd 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. Mcpherson'S Ltd can take advantage of this fund but it will also bring new competitors in the Jewelry & Silverware industry.
Consumer confidence and its impact on Mcpherson'S Ltd 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 Jewelry & Silverware industry and other sectors.
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. Mcpherson'S Ltd needs to understand the core reasons impacting the Jewelry & Silverware industry. This will help it in building a better workplace.
Increasing wage structure of Mcpherson'S Ltd
– 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 Mcpherson'S Ltd.
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 Mcpherson'S Ltd.
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 Mcpherson'S Ltd in the Jewelry & Silverware sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Mcpherson'S Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mcpherson'S Ltd 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 Mcpherson'S Ltd 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 Mcpherson'S Ltd 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 Mcpherson'S Ltd 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 Mcpherson'S Ltd needs to make to build a sustainable competitive advantage.