Heckler & Koch Beteiligungs AG (MLHK) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Heckler & Koch Beteiligungs AG (France)
Based on various researches at Oak Spring University , Heckler & Koch Beteiligungs AG is operating in a macro-environment that has been destablized by – wage bills are increasing, there is backlash against globalization, technology disruption, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Heckler & Koch Beteiligungs AG
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Heckler & Koch Beteiligungs AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Heckler & Koch Beteiligungs AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG can be done for the following purposes –
1. Strategic planning of Heckler & Koch Beteiligungs AG
2. Improving business portfolio management of Heckler & Koch Beteiligungs AG
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 Heckler & Koch Beteiligungs AG
Strengths of Heckler & Koch Beteiligungs AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Heckler & Koch Beteiligungs AG are -
Ability to recruit top talent
– Heckler & Koch Beteiligungs AG 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
– Heckler & Koch Beteiligungs AG has clearly differentiated products in the market place. This has enabled Heckler & Koch Beteiligungs AG to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Heckler & Koch Beteiligungs AG to invest into research and development (R&D) and innovation.
High brand equity
– Heckler & Koch Beteiligungs AG has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Heckler & Koch Beteiligungs AG to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Heckler & Koch Beteiligungs AG digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Heckler & Koch Beteiligungs AG 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.
Diverse revenue streams
– Heckler & Koch Beteiligungs AG is present in almost all the verticals within the industry. This has provided Heckler & Koch Beteiligungs AG 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.
Analytics focus
– Heckler & Koch Beteiligungs AG 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.
Cross disciplinary teams
– Horizontal connected teams at the Heckler & Koch Beteiligungs AG 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.
Organizational Resilience of Heckler & Koch Beteiligungs AG
– The covid-19 pandemic has put organizational resilience at the centre of everthing Heckler & Koch Beteiligungs AG does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in
– Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the industry
– Heckler & Koch Beteiligungs AG is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Heckler & Koch Beteiligungs AG is one of the most innovative firm in sector.
Low bargaining power of suppliers
– Suppliers of Heckler & Koch Beteiligungs AG in the sector have low bargaining power. Heckler & Koch Beteiligungs AG has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Heckler & Koch Beteiligungs AG to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Heckler & Koch Beteiligungs AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Heckler & Koch Beteiligungs AG are -
Ability to respond to the competition
– As the decision making is very deliberative at Heckler & Koch Beteiligungs AG, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Heckler & Koch Beteiligungs AG has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Heckler & Koch Beteiligungs AG 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Heckler & Koch Beteiligungs AG is slow explore the new channels of communication. These new channels of communication can help Heckler & Koch Beteiligungs AG to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Heckler & Koch Beteiligungs AG is dominated by functional specialists. It is not different from other players in the industry, but Heckler & Koch Beteiligungs AG needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Heckler & Koch Beteiligungs AG to focus more on services in the industry rather than just following the product oriented approach.
Employees’ less understanding of Heckler & Koch Beteiligungs AG strategy
– From the outside it seems that the employees of Heckler & Koch Beteiligungs AG 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.
High cash cycle compare to competitors
Heckler & Koch Beteiligungs AG has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of France, Heckler & Koch Beteiligungs AG needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG lucrative customers.
Need for greater diversity
– Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG can leverage the sales team experience to cultivate customer relationships as Heckler & Koch Beteiligungs AG is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Heckler & Koch Beteiligungs AG is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Heckler & Koch Beteiligungs AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Heckler & Koch Beteiligungs AG 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, Heckler & Koch Beteiligungs AG can use these opportunities to build new business models that can help the communities that Heckler & Koch Beteiligungs AG operates in. Secondly it can use opportunities from government spending in sector.
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. Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Heckler & Koch Beteiligungs AG 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.
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 Heckler & Koch Beteiligungs AG 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Heckler & Koch Beteiligungs AG can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Heckler & Koch Beteiligungs AG has opened avenues for new revenue streams for the organization in industry. This can help Heckler & Koch Beteiligungs AG to build a more holistic ecosystem for Heckler & Koch Beteiligungs AG products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Heckler & Koch Beteiligungs AG is facing challenges because of the dominance of functional experts in the organization. Heckler & Koch Beteiligungs AG 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.
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. Heckler & Koch Beteiligungs AG 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. Heckler & Koch Beteiligungs AG 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.
Learning at scale
– Online learning technologies has now opened space for Heckler & Koch Beteiligungs AG 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Heckler & Koch Beteiligungs AG 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 industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Heckler & Koch Beteiligungs AG in the industry. Now Heckler & Koch Beteiligungs AG can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Heckler & Koch Beteiligungs AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Heckler & Koch Beteiligungs AG are -
Consumer confidence and its impact on Heckler & Koch Beteiligungs AG 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Heckler & Koch Beteiligungs AG with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Heckler & Koch Beteiligungs AG in the sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Heckler & Koch Beteiligungs AG 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.
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.
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 Heckler & Koch Beteiligungs AG.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Heckler & Koch Beteiligungs AG may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
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. Heckler & Koch Beteiligungs AG can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Heckler & Koch Beteiligungs AG needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG prominent markets.
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. Heckler & Koch Beteiligungs AG 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.
Environmental challenges
– Heckler & Koch Beteiligungs AG 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. Heckler & Koch Beteiligungs AG can take advantage of this fund but it will also bring new competitors in the industry.
Technology acceleration in Forth Industrial Revolution
– Heckler & Koch Beteiligungs AG has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Heckler & Koch Beteiligungs AG 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.
Weighted SWOT Analysis of Heckler & Koch Beteiligungs AG Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG 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 Heckler & Koch Beteiligungs AG needs to make to build a sustainable competitive advantage.
