Temple & Webster Group Ltd (TPW) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Temple & Webster Group Ltd (Australia)

Based on various researches at Oak Spring University , Temple & Webster Group Ltd is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , technology disruption, there is backlash against globalization, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of Temple & Webster Group Ltd

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Temple & Webster Group Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Temple & Webster Group Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Temple & Webster Group 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Temple & Webster Group Ltd can be done for the following purposes –
1. Strategic planning of Temple & Webster Group Ltd
2. Improving business portfolio management of Temple & Webster Group Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Furniture & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Temple & Webster Group Ltd

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Strengths of Temple & Webster Group Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Temple & Webster Group Ltd are -

Operational resilience

– The operational resilience strategy of Temple & Webster Group Ltd comprises – understanding the underlying the factors in the Furniture & Fixtures 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)

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

Diverse revenue streams

– Temple & Webster Group Ltd is present in almost all the verticals within the Furniture & Fixtures industry. This has provided Temple & Webster Group 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.

Low bargaining power of suppliers

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

Digital Transformation in Furniture & Fixtures industry

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

Ability to recruit top talent

– Temple & Webster Group Ltd is one of the leading players in the Furniture & Fixtures 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.

Learning organization

- Temple & Webster Group 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 Temple & Webster Group Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Temple & Webster Group Ltd emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Temple & Webster Group Ltd is one of the most innovative firm in Furniture & Fixtures sector.

Successful track record of launching new products

– Temple & Webster Group Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Temple & Webster Group Ltd 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.

Sustainable margins compare to other players in Furniture & Fixtures industry

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

Training and development

– Temple & Webster Group Ltd has one of the best training and development program in Consumer Cyclical 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.

Cross disciplinary teams

– Horizontal connected teams at the Temple & Webster Group 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.

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Weaknesses of Temple & Webster Group Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Temple & Webster Group Ltd are -

Increasing silos among functional specialists

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

Ability to respond to the competition

– As the decision making is very deliberative at Temple & Webster Group Ltd, in the dynamic environment of Furniture & Fixtures industry it has struggled to respond to the nimble upstart competition. Temple & Webster Group Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Low market penetration in new markets

– Outside its home market of Australia, Temple & Webster Group Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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

High dependence on Temple & Webster Group Ltd ‘s star products

– The top 2 products and services of Temple & Webster Group Ltd still accounts for major business revenue. This dependence on star products in Furniture & Fixtures industry has resulted into insufficient focus on developing new products, even though Temple & Webster Group Ltd has relatively successful track record of launching new products.

Need for greater diversity

– Temple & Webster Group 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.

Slow decision making process

– As mentioned earlier in the report, Temple & Webster Group 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 Furniture & Fixtures industry over the last five years. Temple & Webster Group 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.

Compensation and incentives

– The revenue per employee of Temple & Webster Group Ltd is just above the Furniture & Fixtures 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, Temple & Webster Group Ltd 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 Furniture & Fixtures industry using digital technology.

Employees’ less understanding of Temple & Webster Group Ltd strategy

– From the outside it seems that the employees of Temple & Webster Group Ltd 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 cash cycle compare to competitors

Temple & Webster Group Ltd has a high cash cycle compare to other players in the Furniture & Fixtures industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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Temple & Webster Group Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Temple & Webster Group Ltd are -

Learning at scale

– Online learning technologies has now opened space for Temple & Webster Group 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Furniture & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Temple & Webster Group 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. Temple & Webster Group 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.

Better consumer reach

– The expansion of the 5G network will help Temple & Webster Group Ltd to increase its market reach. Temple & Webster Group Ltd 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.

Developing new processes and practices

– Temple & Webster Group Ltd can develop new processes and procedures in Furniture & Fixtures 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.

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 Temple & Webster Group Ltd 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.

Buying journey improvements

– Temple & Webster Group Ltd can improve the customer journey of consumers in the Furniture & Fixtures 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.

Creating value in data economy

– The success of analytics program of Temple & Webster Group Ltd has opened avenues for new revenue streams for the organization in Furniture & Fixtures industry. This can help Temple & Webster Group Ltd to build a more holistic ecosystem for Temple & Webster Group Ltd products in the Furniture & Fixtures industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Temple & Webster Group 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 Furniture & Fixtures industry.

Use of Bitcoin and other crypto currencies for transactions in Furniture & Fixtures industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Temple & Webster Group Ltd in the Furniture & Fixtures industry. Now Temple & Webster Group Ltd can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Temple & Webster Group Ltd can use these opportunities to build new business models that can help the communities that Temple & Webster Group Ltd operates in. Secondly it can use opportunities from government spending in Furniture & Fixtures sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Temple & Webster Group 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 Furniture & Fixtures industry, and it will provide faster access to the consumers.

Harnessing reconfiguration of the global supply chains

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

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Threats Temple & Webster Group Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Temple & Webster Group Ltd are -

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 Temple & Webster Group Ltd.

Technology acceleration in Forth Industrial Revolution

– Temple & Webster Group Ltd has witnessed rapid integration of technology during Covid-19 in the Furniture & Fixtures industry. As one of the leading players in the industry, Temple & Webster Group Ltd needs to keep up with the evolution of technology in the Furniture & Fixtures 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.

Stagnating economy with rate increase

– Temple & Webster Group Ltd 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 Furniture & Fixtures industry.

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 Temple & Webster Group Ltd in the Furniture & Fixtures sector and impact the bottomline of the organization.

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.

Regulatory challenges

– Temple & Webster Group Ltd 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 Furniture & Fixtures industry regulations.

High dependence on third party suppliers

– Temple & Webster Group 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Temple & Webster Group Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Furniture & Fixtures sector.

Easy access to finance

– Easy access to finance in Furniture & Fixtures industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Temple & Webster Group 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 Temple & Webster Group Ltd is facing in Furniture & Fixtures sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Environmental challenges

– Temple & Webster Group 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. Temple & Webster Group Ltd can take advantage of this fund but it will also bring new competitors in the Furniture & Fixtures industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Furniture & Fixtures industry are lowering. It can presents Temple & Webster Group Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Furniture & Fixtures sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Temple & Webster Group Ltd in Furniture & Fixtures industry. The Furniture & Fixtures 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.

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Weighted SWOT Analysis of Temple & Webster Group Ltd Template, Example

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

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