Neopost (NPOS) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Neopost (France)

Based on various researches at Oak Spring University , Neopost is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc

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Introduction to SWOT Analysis of Neopost

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

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

The strengths of Neopost are -

Learning organization

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

Innovation driven organization

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

Successful track record of launching new products

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

Digital Transformation in Office Equipment industry

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

– Neopost is one of the leading players in the Office Equipment industry in France. It is in a position to attract the best talent available in France. The firm has a robust talent identification program that helps in identifying the brightest.

Strong track record of project management in the Office Equipment industry

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

Low bargaining power of suppliers

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

Diverse revenue streams

– Neopost is present in almost all the verticals within the Office Equipment industry. This has provided Neopost 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.

High brand equity

– Neopost has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Neopost to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Office Equipment industry

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

Ability to lead change in Office Equipment

– Neopost is one of the leading players in the Office Equipment industry in France. Over the years it has not only transformed the business landscape in the Office Equipment industry in France but also across the existing markets. The ability to lead change has enabled Neopost in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Effective Research and Development (R&D)

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

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

The weaknesses of Neopost are -

Products dominated business model

– Even though Neopost has some of the most successful models in the Office Equipment industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Neopost should strive to include more intangible value offerings along with its core products and services.

Skills based hiring in Office Equipment industry

– The stress on hiring functional specialists at Neopost has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

High bargaining power of channel partners in Office Equipment industry

– because of the regulatory requirements in France, Neopost 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 Office Equipment industry.

Slow decision making process

– As mentioned earlier in the report, Neopost has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Equipment industry over the last five years. Neopost 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.

Employees’ less understanding of Neopost strategy

– From the outside it seems that the employees of Neopost 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.

Need for greater diversity

– Neopost 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.

Interest costs

– Compare to the competition, Neopost has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Increasing silos among functional specialists

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

High operating costs

– Compare to the competitors, Neopost has high operating costs in the Office Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Neopost lucrative customers.

Capital Spending Reduction

– Even during the low interest decade, Neopost has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Office Equipment industry using digital technology.

Workers concerns about automation

– As automation is fast increasing in the Office Equipment industry, Neopost 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.

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

The opportunities of Neopost are -

Finding new ways to collaborate

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

Harnessing reconfiguration of the global supply chains

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

Use of Bitcoin and other crypto currencies for transactions in Office Equipment industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Neopost in the Office Equipment industry. Now Neopost can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– Neopost has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Office Equipment sector. This continuous investment in analytics has enabled Neopost to build a competitive advantage using analytics. The analytics driven competitive advantage can help Neopost 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, Neopost can use these opportunities to build new business models that can help the communities that Neopost operates in. Secondly it can use opportunities from government spending in Office Equipment sector.

Building a culture of innovation

– managers at Neopost can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Office Equipment industry.

Loyalty marketing

– Neopost 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.

Redefining models of collaboration and team work

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

Manufacturing automation

– Neopost can use the latest technology developments to improve its manufacturing and designing process in Office Equipment sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Creating value in data economy

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

Reforming the budgeting process

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

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. Neopost can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Lowering marketing communication costs

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

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

The threats of Neopost are -

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.

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.

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 Neopost.

Technology acceleration in Forth Industrial Revolution

– Neopost has witnessed rapid integration of technology during Covid-19 in the Office Equipment industry. As one of the leading players in the industry, Neopost needs to keep up with the evolution of technology in the Office Equipment sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

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 Neopost business can come under increasing regulations regarding data privacy, data security, etc.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Neopost will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

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 Neopost in the Office Equipment sector and impact the bottomline of the organization.

High dependence on third party suppliers

– Neopost 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.

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

Increasing international competition and downward pressure on margins

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

Barriers of entry lowering

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

Shortening product life cycle

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

Easy access to finance

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

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Weighted SWOT Analysis of Neopost Template, Example

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

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