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 – increasing household debt because of falling income levels, increasing energy prices, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
Innovation driven organization
– Olympique Lyonnais is one of the most innovative firm in Recreational Activities sector.
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.
Low bargaining power of suppliers
– Suppliers of Olympique Lyonnais in the Services sector have low bargaining power. Olympique Lyonnais has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Olympique Lyonnais to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
High brand equity
– Olympique Lyonnais has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Olympique Lyonnais to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Olympique Lyonnais has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Olympique Lyonnais 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.
Effective Research and Development (R&D)
– Olympique Lyonnais has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Olympique Lyonnais staying ahead in the Recreational Activities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Olympique Lyonnais is one of the leading players in the Recreational Activities 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.
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.
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.
Weaknesses of Olympique Lyonnais | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olympique Lyonnais are -
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.
Lack of clear differentiation of Olympique Lyonnais products
– To increase the profitability and margins on the products, Olympique Lyonnais needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Recreational Activities industry, Olympique Lyonnais 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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Olympique Lyonnais has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Recreational Activities industry over the last five years. Olympique Lyonnais 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.
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.
Ability to respond to the competition
– As the decision making is very deliberative at Olympique Lyonnais, in the dynamic environment of Recreational Activities industry it has struggled to respond to the nimble upstart competition. Olympique Lyonnais has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Olympique Lyonnais supply chain. Even after few cautionary changes, Olympique Lyonnais is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Olympique Lyonnais vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Olympique Lyonnais, it seems that company is thinking out the frontier risks that can impact Recreational Activities industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Olympique Lyonnais Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Olympique Lyonnais are -
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Olympique Lyonnais 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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Olympique Lyonnais 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.
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.
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.
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.
Developing new processes and practices
– Olympique Lyonnais can develop new processes and procedures in Recreational Activities 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.
Using analytics as competitive advantage
– Olympique Lyonnais has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Activities sector. This continuous investment in analytics has enabled Olympique Lyonnais to build a competitive advantage using analytics. The analytics driven competitive advantage can help Olympique Lyonnais to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Olympique Lyonnais can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Olympique Lyonnais External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Olympique Lyonnais are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Olympique Lyonnais in Recreational Activities industry. The Recreational Activities 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.
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.
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.
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.
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.
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 Olympique Lyonnais.
Stagnating economy with rate increase
– Olympique Lyonnais 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 Recreational Activities industry.
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.
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.
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.
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.
Increasing wage structure of Olympique Lyonnais
– 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 Olympique Lyonnais.
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.
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.