People Infrastructure (PPE) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for People Infrastructure (Australia)

Based on various researches at Oak Spring University , People Infrastructure is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing commodity prices, technology disruption, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of People Infrastructure

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

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

The strengths of People Infrastructure are -

Diverse revenue streams

– People Infrastructure is present in almost all the verticals within the Business Services industry. This has provided People Infrastructure 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.

Analytics focus

– People Infrastructure 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 Business Services 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.

Learning organization

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

Strong track record of project management in the Business Services industry

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

Highly skilled collaborators

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

Digital Transformation in Business Services industry

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

Successful track record of launching new products

– People Infrastructure has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. People Infrastructure 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.

Superior customer experience

– The customer experience strategy of People Infrastructure in Business Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– People Infrastructure is one of the most innovative firm in Business Services sector.

High switching costs

– The high switching costs that People Infrastructure 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.

Operational resilience

– The operational resilience strategy of People Infrastructure comprises – understanding the underlying the factors in the Business Services 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.

Cross disciplinary teams

– Horizontal connected teams at the People Infrastructure 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.

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

The weaknesses of People Infrastructure are -

Slow to harness new channels of communication

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

High bargaining power of channel partners in Business Services industry

– because of the regulatory requirements in Australia, People Infrastructure 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 Business Services industry.

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 People Infrastructure supply chain. Even after few cautionary changes, People Infrastructure is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left People Infrastructure vulnerable to further global disruptions in South East Asia.

Compensation and incentives

– The revenue per employee of People Infrastructure is just above the Business Services 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.

Capital Spending Reduction

– Even during the low interest decade, People Infrastructure 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 Business Services industry using digital technology.

High dependence on People Infrastructure ‘s star products

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

Interest costs

– Compare to the competition, People Infrastructure 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.

Low market penetration in new markets

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

Lack of clear differentiation of People Infrastructure products

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

Slow to strategic competitive environment developments

– As People Infrastructure is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.

Need for greater diversity

– People Infrastructure 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.

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

The opportunities of People Infrastructure are -

Reforming the budgeting process

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

Finding new ways to collaborate

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

Lowering marketing communication costs

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

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. People Infrastructure 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. People Infrastructure 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 People Infrastructure 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.

Developing new processes and practices

– People Infrastructure can develop new processes and procedures in Business Services 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.

Increase in government spending

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

Low interest rates

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

Harnessing reconfiguration of the global supply chains

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

Leveraging digital technologies

– People Infrastructure 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.

Building a culture of innovation

– managers at People Infrastructure 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 Business Services industry.

Remote work and new talent hiring opportunities

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

Loyalty marketing

– People Infrastructure 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.

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

The threats of People Infrastructure 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 People Infrastructure business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on People Infrastructure 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 Business Services industry and other sectors.

Shortening product life cycle

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

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 People Infrastructure in the Business Services sector and impact the bottomline of the organization.

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 People Infrastructure.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, People Infrastructure 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 People Infrastructure prominent markets.

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. People Infrastructure needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.

Regulatory challenges

– People Infrastructure 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 Business Services industry regulations.

Environmental challenges

– People Infrastructure 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. People Infrastructure can take advantage of this fund but it will also bring new competitors in the Business Services industry.

High dependence on third party suppliers

– People Infrastructure 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 Business Services industry are lowering. It can presents People Infrastructure with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for People Infrastructure in Business Services industry. The Business Services 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 wage structure of People Infrastructure

– 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 People Infrastructure.

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Weighted SWOT Analysis of People Infrastructure Template, Example

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

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