SWOT Analysis / TOWS Matrix for Olympique Lyonnais (France)
Based on various researches at Oak Spring University , Olympique Lyonnais is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, technology disruption, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Olympique Lyonnais
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Olympique Lyonnais can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Olympique Lyonnais, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Olympique Lyonnais 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 Olympique Lyonnais can be done for the following purposes –
1. Strategic planning of Olympique Lyonnais
2. Improving business portfolio management of Olympique Lyonnais
3. Assessing feasibility of the new initiative in France
4. Making a Recreational Activities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Olympique Lyonnais
Strengths of Olympique Lyonnais | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Olympique Lyonnais are -
Learning organization
- Olympique Lyonnais 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 Olympique Lyonnais is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Olympique Lyonnais emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Olympique Lyonnais 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.
High switching costs
– The high switching costs that Olympique Lyonnais 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.
Ability to lead change in Recreational Activities
– Olympique Lyonnais is one of the leading players in the Recreational Activities industry in France. Over the years it has not only transformed the business landscape in the Recreational Activities industry in France but also across the existing markets. The ability to lead change has enabled Olympique Lyonnais in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Recreational Activities industry
– Olympique Lyonnais has clearly differentiated products in the market place. This has enabled Olympique Lyonnais to fetch slight price premium compare to the competitors in the Recreational Activities industry. The sustainable margins have also helped Olympique Lyonnais to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Olympique Lyonnais is present in almost all the verticals within the Recreational Activities industry. This has provided Olympique Lyonnais 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 Recreational Activities industry
- digital transformation varies from industry to industry. For Olympique Lyonnais digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Olympique Lyonnais 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.
Operational resilience
– The operational resilience strategy of Olympique Lyonnais comprises – understanding the underlying the factors in the Recreational Activities 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.
Analytics focus
– Olympique Lyonnais 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 Recreational Activities industry. The technology infrastructure of France 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.
Highly skilled collaborators
– Olympique Lyonnais has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Recreational Activities industry. Secondly the value chain collaborators of Olympique Lyonnais have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Recreational Activities industry
– Olympique Lyonnais is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Olympique Lyonnais
– The covid-19 pandemic has put organizational resilience at the centre of everthing Olympique Lyonnais does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Olympique Lyonnais | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympique Lyonnais are -
Interest costs
– Compare to the competition, Olympique Lyonnais 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.
Employees’ less understanding of Olympique Lyonnais strategy
– From the outside it seems that the employees of Olympique Lyonnais 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.
Compensation and incentives
– The revenue per employee of Olympique Lyonnais is just above the Recreational Activities 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.
High dependence on Olympique Lyonnais ‘s star products
– The top 2 products and services of Olympique Lyonnais still accounts for major business revenue. This dependence on star products in Recreational Activities industry has resulted into insufficient focus on developing new products, even though Olympique Lyonnais has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Olympique Lyonnais 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 Recreational Activities industry using digital technology.
Skills based hiring in Recreational Activities industry
– The stress on hiring functional specialists at Olympique Lyonnais 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.
Products dominated business model
– Even though Olympique Lyonnais has some of the most successful models in the Recreational Activities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Olympique Lyonnais should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of France, Olympique Lyonnais needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Olympique Lyonnais is dominated by functional specialists. It is not different from other players in the Recreational Activities industry, but Olympique Lyonnais needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Olympique Lyonnais to focus more on services in the Recreational Activities industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Olympique Lyonnais is slow explore the new channels of communication. These new channels of communication can help Olympique Lyonnais to provide better information regarding Recreational Activities products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Olympique Lyonnais 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.
Olympique Lyonnais Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Olympique Lyonnais are -
Creating value in data economy
– The success of analytics program of Olympique Lyonnais has opened avenues for new revenue streams for the organization in Recreational Activities industry. This can help Olympique Lyonnais to build a more holistic ecosystem for Olympique Lyonnais products in the Recreational Activities industry by providing – data insight services, data privacy related products, data based consulting services, 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, Olympique Lyonnais can use these opportunities to build new business models that can help the communities that Olympique Lyonnais operates in. Secondly it can use opportunities from government spending in Recreational Activities sector.
Loyalty marketing
– Olympique Lyonnais 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Olympique Lyonnais in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Activities industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Olympique Lyonnais 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 Olympique Lyonnais to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Recreational Activities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Olympique Lyonnais 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. Olympique Lyonnais 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Olympique Lyonnais is facing challenges because of the dominance of functional experts in the organization. Olympique Lyonnais can utilize new technology in the field of Recreational Activities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Olympique Lyonnais 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 Olympique Lyonnais to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Olympique Lyonnais can improve the customer journey of consumers in the Recreational Activities 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.
Use of Bitcoin and other crypto currencies for transactions in Recreational Activities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Olympique Lyonnais in the Recreational Activities industry. Now Olympique Lyonnais can target international markets with far fewer capital restrictions requirements than the existing system.
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 Olympique Lyonnais 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.
Better consumer reach
– The expansion of the 5G network will help Olympique Lyonnais to increase its market reach. Olympique Lyonnais 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.
Manufacturing automation
– Olympique Lyonnais can use the latest technology developments to improve its manufacturing and designing process in Recreational Activities 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.
Threats Olympique Lyonnais External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Olympique Lyonnais 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Olympique Lyonnais 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 Olympique Lyonnais prominent markets.
Technology acceleration in Forth Industrial Revolution
– Olympique Lyonnais has witnessed rapid integration of technology during Covid-19 in the Recreational Activities industry. As one of the leading players in the industry, Olympique Lyonnais needs to keep up with the evolution of technology in the Recreational Activities 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Olympique Lyonnais may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Activities 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.
Shortening product life cycle
– it is one of the major threat that Olympique Lyonnais is facing in Recreational Activities 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 Recreational Activities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Olympique Lyonnais can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Olympique Lyonnais 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 Recreational Activities industry regulations.
Consumer confidence and its impact on Olympique Lyonnais 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 Recreational Activities industry and other sectors.
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 Olympique Lyonnais business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Olympique Lyonnais 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. Olympique Lyonnais can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.
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. Olympique Lyonnais needs to understand the core reasons impacting the Recreational Activities industry. This will help it in building a better workplace.
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 Olympique Lyonnais in the Recreational Activities sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Olympique Lyonnais Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Olympique Lyonnais 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 Olympique Lyonnais 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 Olympique Lyonnais 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 Olympique Lyonnais 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 Olympique Lyonnais needs to make to build a sustainable competitive advantage.