SWOT Analysis / TOWS Matrix for Valoneo SASU (France)
Based on various researches at Oak Spring University , Valoneo SASU is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Valoneo SASU can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Valoneo SASU, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Valoneo SASU 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 Valoneo SASU can be done for the following purposes –
1. Strategic planning of Valoneo SASU
2. Improving business portfolio management of Valoneo SASU
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 Valoneo SASU
Strengths of Valoneo SASU | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Valoneo SASU are -
Learning organization
- Valoneo SASU 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 Valoneo SASU is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Valoneo SASU emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Valoneo SASU 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 recruit top talent
– Valoneo SASU 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.
Sustainable margins compare to other players in industry
– Valoneo SASU has clearly differentiated products in the market place. This has enabled Valoneo SASU to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Valoneo SASU to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Valoneo SASU comprises – understanding the underlying the factors in the 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.
Effective Research and Development (R&D)
– Valoneo SASU has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Valoneo SASU staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the industry
– Valoneo SASU 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 Valoneo SASU in the sector have low bargaining power. Valoneo SASU has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Valoneo SASU to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Valoneo SASU is one of the most innovative firm in sector.
Training and development
– Valoneo SASU has one of the best training and development program in 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.
Highly skilled collaborators
– Valoneo SASU has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Valoneo SASU have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Valoneo SASU has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Valoneo SASU to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Valoneo SASU | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Valoneo SASU are -
High bargaining power of channel partners in industry
– because of the regulatory requirements in France, Valoneo SASU 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 industry.
High operating costs
– Compare to the competitors, Valoneo SASU 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 Valoneo SASU lucrative customers.
Interest costs
– Compare to the competition, Valoneo SASU 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.
Aligning sales with marketing
– From the outside it seems that Valoneo SASU needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Valoneo SASU can leverage the sales team experience to cultivate customer relationships as Valoneo SASU is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Valoneo SASU is dominated by functional specialists. It is not different from other players in the industry, but Valoneo SASU needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Valoneo SASU to focus more on services in the industry rather than just following the product oriented approach.
Need for greater diversity
– Valoneo SASU 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.
Skills based hiring in industry
– The stress on hiring functional specialists at Valoneo SASU 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 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 Valoneo SASU supply chain. Even after few cautionary changes, Valoneo SASU is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Valoneo SASU vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of France, Valoneo SASU needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Valoneo SASU is slow explore the new channels of communication. These new channels of communication can help Valoneo SASU to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Valoneo SASU strategy
– From the outside it seems that the employees of Valoneo SASU 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.
Valoneo SASU Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Valoneo SASU are -
Buying journey improvements
– Valoneo SASU can improve the customer journey of consumers in the 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.
Building a culture of innovation
– managers at Valoneo SASU 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 industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Valoneo SASU 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 Valoneo SASU to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Valoneo SASU 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. Valoneo SASU 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.
Better consumer reach
– The expansion of the 5G network will help Valoneo SASU to increase its market reach. Valoneo SASU 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.
Using analytics as competitive advantage
– Valoneo SASU has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Valoneo SASU to build a competitive advantage using analytics. The analytics driven competitive advantage can help Valoneo SASU to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Valoneo SASU 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.
Leveraging digital technologies
– Valoneo SASU 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.
Manufacturing automation
– Valoneo SASU 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Valoneo SASU is facing challenges because of the dominance of functional experts in the organization. Valoneo SASU 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.
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. Valoneo SASU 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 Valoneo SASU 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Valoneo SASU can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Valoneo SASU External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Valoneo SASU are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Valoneo SASU with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the 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.
Environmental challenges
– Valoneo SASU 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. Valoneo SASU can take advantage of this fund but it will also bring new competitors in the industry.
Shortening product life cycle
– it is one of the major threat that Valoneo SASU is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Valoneo SASU 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 industry and other sectors.
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. Valoneo SASU 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.
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 Valoneo SASU.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Valoneo SASU 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 Valoneo SASU prominent markets.
Increasing wage structure of Valoneo SASU
– 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 Valoneo SASU.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Valoneo SASU can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Valoneo SASU business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Valoneo SASU has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Valoneo SASU needs to keep up with the evolution of technology in the 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.
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 Valoneo SASU Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Valoneo SASU 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 Valoneo SASU 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 Valoneo SASU 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 Valoneo SASU 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 Valoneo SASU needs to make to build a sustainable competitive advantage.