Innovaderma (MLIDP) SWOT Analysis / TOWS Matrix / MBA Resources
Personal Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Innovaderma (France)
Based on various researches at Oak Spring University , Innovaderma is operating in a macro-environment that has been destablized by – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing transportation and logistics costs, there is backlash against globalization, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Innovaderma can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Innovaderma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Innovaderma 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 Innovaderma can be done for the following purposes –
1. Strategic planning of Innovaderma
2. Improving business portfolio management of Innovaderma
3. Assessing feasibility of the new initiative in France
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Innovaderma
Strengths of Innovaderma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Innovaderma are -
Superior customer experience
– The customer experience strategy of Innovaderma in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Innovaderma 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.
Highly skilled collaborators
– Innovaderma has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of Innovaderma have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Innovaderma has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Innovaderma staying ahead in the Personal Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Personal Services
– Innovaderma is one of the leading players in the Personal Services industry in France. Over the years it has not only transformed the business landscape in the Personal Services industry in France but also across the existing markets. The ability to lead change has enabled Innovaderma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Innovaderma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Innovaderma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Innovaderma has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy of Innovaderma comprises – understanding the underlying the factors in the Personal Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Innovaderma in the Services sector have low bargaining power. Innovaderma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Innovaderma to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Innovaderma 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 Personal Services 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.
Learning organization
- Innovaderma 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 Innovaderma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Innovaderma emphasize – knowledge, initiative, and innovation.
Training and development
– Innovaderma has one of the best training and development program in Services 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.
Weaknesses of Innovaderma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovaderma are -
High cash cycle compare to competitors
Innovaderma has a high cash cycle compare to other players in the Personal Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Innovaderma 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.
Aligning sales with marketing
– From the outside it seems that Innovaderma needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal Services industry have deep experience in developing customer relationships. Marketing department at Innovaderma can leverage the sales team experience to cultivate customer relationships as Innovaderma is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Innovaderma has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal Services industry over the last five years. Innovaderma 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 strategic competitive environment developments
– As Innovaderma is one of the leading players in the Personal Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Personal Services industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Innovaderma 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 Personal Services industry using digital technology.
Products dominated business model
– Even though Innovaderma has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Innovaderma should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Personal Services industry
– because of the regulatory requirements in France, Innovaderma 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 Personal Services industry.
Workers concerns about automation
– As automation is fast increasing in the Personal Services industry, Innovaderma 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Innovaderma is slow explore the new channels of communication. These new channels of communication can help Innovaderma to provide better information regarding Personal Services products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Innovaderma has high operating costs in the Personal Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Innovaderma lucrative customers.
Innovaderma Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Innovaderma are -
Better consumer reach
– The expansion of the 5G network will help Innovaderma to increase its market reach. Innovaderma 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.
Loyalty marketing
– Innovaderma 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.
Use of Bitcoin and other crypto currencies for transactions in Personal Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Innovaderma in the Personal Services industry. Now Innovaderma can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Innovaderma 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.
Building a culture of innovation
– managers at Innovaderma 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 Personal Services industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal Services industry, but it has also influenced the consumer preferences. Innovaderma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Innovaderma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal Services 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 Innovaderma 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 Innovaderma to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Innovaderma 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.
Leveraging digital technologies
– Innovaderma can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Buying journey improvements
– Innovaderma can improve the customer journey of consumers in the Personal Services 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Innovaderma 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 Innovaderma to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Innovaderma is facing challenges because of the dominance of functional experts in the organization. Innovaderma can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Innovaderma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Innovaderma are -
Easy access to finance
– Easy access to finance in Personal Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Innovaderma can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Innovaderma 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.
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. Innovaderma 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Innovaderma 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 Innovaderma prominent markets.
Environmental challenges
– Innovaderma 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. Innovaderma can take advantage of this fund but it will also bring new competitors in the Personal Services industry.
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 acceleration in Forth Industrial Revolution
– Innovaderma has witnessed rapid integration of technology during Covid-19 in the Personal Services industry. As one of the leading players in the industry, Innovaderma needs to keep up with the evolution of technology in the Personal Services 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
– Innovaderma 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 Personal Services industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal Services industry are lowering. It can presents Innovaderma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal Services sector.
Regulatory challenges
– Innovaderma 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 Personal Services industry regulations.
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. Innovaderma needs to understand the core reasons impacting the Personal Services industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Innovaderma is facing in Personal Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Innovaderma business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Innovaderma Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Innovaderma 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 Innovaderma 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 Innovaderma 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 Innovaderma 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 Innovaderma needs to make to build a sustainable competitive advantage.