O Sorbet d’Amour (MLOSA) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for O Sorbet d’Amour (France)
Based on various researches at Oak Spring University , O Sorbet d’Amour is operating in a macro-environment that has been destablized by – increasing commodity prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that O Sorbet d’Amour can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the O Sorbet d’Amour, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which O Sorbet d’Amour 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 O Sorbet d’Amour can be done for the following purposes –
1. Strategic planning of O Sorbet d’Amour
2. Improving business portfolio management of O Sorbet d’Amour
3. Assessing feasibility of the new initiative in France
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of O Sorbet d’Amour
Strengths of O Sorbet d’Amour | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of O Sorbet d’Amour are -
High switching costs
– The high switching costs that O Sorbet d’Amour 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.
Innovation driven organization
– O Sorbet d’Amour is one of the most innovative firm in sector.
Learning organization
- O Sorbet d’Amour 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 O Sorbet d’Amour is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at O Sorbet d’Amour emphasize – knowledge, initiative, and innovation.
Ability to lead change in
– O Sorbet d’Amour is one of the leading players in the industry in France. Over the years it has not only transformed the business landscape in the industry in France but also across the existing markets. The ability to lead change has enabled O Sorbet d’Amour in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– O Sorbet d’Amour 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 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For O Sorbet d’Amour digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. O Sorbet d’Amour 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.
Strong track record of project management in the industry
– O Sorbet d’Amour is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– O Sorbet d’Amour is one of the leading players in the 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.
Successful track record of launching new products
– O Sorbet d’Amour has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. O Sorbet d’Amour 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.
Low bargaining power of suppliers
– Suppliers of O Sorbet d’Amour in the sector have low bargaining power. O Sorbet d’Amour has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps O Sorbet d’Amour to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– O Sorbet d’Amour has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled O Sorbet d’Amour to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in industry
– O Sorbet d’Amour has clearly differentiated products in the market place. This has enabled O Sorbet d’Amour to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped O Sorbet d’Amour to invest into research and development (R&D) and innovation.
Weaknesses of O Sorbet d’Amour | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of O Sorbet d’Amour are -
Workers concerns about automation
– As automation is fast increasing in the industry, O Sorbet d’Amour 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.
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 O Sorbet d’Amour supply chain. Even after few cautionary changes, O Sorbet d’Amour is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left O Sorbet d’Amour vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of O Sorbet d’Amour, it seems that company is thinking out the frontier risks that can impact 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.
Need for greater diversity
– O Sorbet d’Amour 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.
Low market penetration in new markets
– Outside its home market of France, O Sorbet d’Amour needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, O Sorbet d’Amour has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. O Sorbet d’Amour 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 O Sorbet d’Amour is just above the 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.
Products dominated business model
– Even though O Sorbet d’Amour has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. O Sorbet d’Amour should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, O Sorbet d’Amour 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.
Lack of clear differentiation of O Sorbet d’Amour products
– To increase the profitability and margins on the products, O Sorbet d’Amour needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, O Sorbet d’Amour has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract O Sorbet d’Amour lucrative customers.
O Sorbet d’Amour Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of O Sorbet d’Amour are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, O Sorbet d’Amour can use these opportunities to build new business models that can help the communities that O Sorbet d’Amour operates in. Secondly it can use opportunities from government spending in sector.
Developing new processes and practices
– O Sorbet d’Amour can develop new processes and procedures in 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. O Sorbet d’Amour can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 O Sorbet d’Amour 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.
Manufacturing automation
– O Sorbet d’Amour can use the latest technology developments to improve its manufacturing and designing process in 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.
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. O Sorbet d’Amour can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects O Sorbet d’Amour can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, O Sorbet d’Amour 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 O Sorbet d’Amour 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 industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for O Sorbet d’Amour in the industry. Now O Sorbet d’Amour 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, O Sorbet d’Amour 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.
Leveraging digital technologies
– O Sorbet d’Amour 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for O Sorbet d’Amour in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, O Sorbet d’Amour is facing challenges because of the dominance of functional experts in the organization. O Sorbet d’Amour can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats O Sorbet d’Amour External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of O Sorbet d’Amour are -
Stagnating economy with rate increase
– O Sorbet d’Amour 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 industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents O Sorbet d’Amour with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 O Sorbet d’Amour business can come under increasing regulations regarding data privacy, data security, etc.
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.
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. O Sorbet d’Amour needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Increasing wage structure of O Sorbet d’Amour
– 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 O Sorbet d’Amour.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for O Sorbet d’Amour in industry. The 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.
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 O Sorbet d’Amour in the sector and impact the bottomline of the organization.
Regulatory challenges
– O Sorbet d’Amour 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 industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, O Sorbet d’Amour 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 O Sorbet d’Amour prominent markets.
Shortening product life cycle
– it is one of the major threat that O Sorbet d’Amour is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 O Sorbet d’Amour.
Weighted SWOT Analysis of O Sorbet d’Amour Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at O Sorbet d’Amour 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 O Sorbet d’Amour 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 O Sorbet d’Amour 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 O Sorbet d’Amour 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 O Sorbet d’Amour needs to make to build a sustainable competitive advantage.