Shop Apotheke Europe (SAEG) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Drugs)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shop Apotheke Europe (Germany)
Based on various researches at Oak Spring University , Shop Apotheke Europe is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing household debt because of falling income levels, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Shop Apotheke Europe
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shop Apotheke Europe can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shop Apotheke Europe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shop Apotheke Europe 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 Shop Apotheke Europe can be done for the following purposes –
1. Strategic planning of Shop Apotheke Europe
2. Improving business portfolio management of Shop Apotheke Europe
3. Assessing feasibility of the new initiative in Germany
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shop Apotheke Europe
Strengths of Shop Apotheke Europe | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shop Apotheke Europe are -
Low bargaining power of suppliers
– Suppliers of Shop Apotheke Europe in the Services sector have low bargaining power. Shop Apotheke Europe has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shop Apotheke Europe to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Shop Apotheke Europe has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shop Apotheke Europe to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Shop Apotheke Europe is present in almost all the verticals within the Retail (Drugs) industry. This has provided Shop Apotheke Europe 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.
Innovation driven organization
– Shop Apotheke Europe is one of the most innovative firm in Retail (Drugs) sector.
Learning organization
- Shop Apotheke Europe 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 Shop Apotheke Europe is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shop Apotheke Europe emphasize – knowledge, initiative, and innovation.
Analytics focus
– Shop Apotheke Europe 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 Retail (Drugs) industry. The technology infrastructure of Germany 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.
Highly skilled collaborators
– Shop Apotheke Europe has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of Shop Apotheke Europe have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Shop Apotheke Europe has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shop Apotheke Europe staying ahead in the Retail (Drugs) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Shop Apotheke Europe has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shop Apotheke Europe 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.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Shop Apotheke Europe digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shop Apotheke Europe 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.
Ability to recruit top talent
– Shop Apotheke Europe is one of the leading players in the Retail (Drugs) industry in Germany. It is in a position to attract the best talent available in Germany. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Shop Apotheke Europe 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.
Weaknesses of Shop Apotheke Europe | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shop Apotheke Europe are -
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 Shop Apotheke Europe supply chain. Even after few cautionary changes, Shop Apotheke Europe is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shop Apotheke Europe vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Shop Apotheke Europe 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.
Need for greater diversity
– Shop Apotheke Europe 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 Retail (Drugs) industry
– The stress on hiring functional specialists at Shop Apotheke Europe 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.
Products dominated business model
– Even though Shop Apotheke Europe has some of the most successful models in the Retail (Drugs) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shop Apotheke Europe 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, Shop Apotheke Europe has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Drugs) industry over the last five years. Shop Apotheke Europe 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.
High operating costs
– Compare to the competitors, Shop Apotheke Europe has high operating costs in the Retail (Drugs) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shop Apotheke Europe lucrative customers.
Aligning sales with marketing
– From the outside it seems that Shop Apotheke Europe needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Drugs) industry have deep experience in developing customer relationships. Marketing department at Shop Apotheke Europe can leverage the sales team experience to cultivate customer relationships as Shop Apotheke Europe is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Retail (Drugs) industry, Shop Apotheke Europe 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 Shop Apotheke Europe ‘s star products
– The top 2 products and services of Shop Apotheke Europe still accounts for major business revenue. This dependence on star products in Retail (Drugs) industry has resulted into insufficient focus on developing new products, even though Shop Apotheke Europe has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Shop Apotheke Europe is dominated by functional specialists. It is not different from other players in the Retail (Drugs) industry, but Shop Apotheke Europe needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shop Apotheke Europe to focus more on services in the Retail (Drugs) industry rather than just following the product oriented approach.
Shop Apotheke Europe Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shop Apotheke Europe are -
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. Shop Apotheke Europe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Shop Apotheke Europe can use the latest technology developments to improve its manufacturing and designing process in Retail (Drugs) 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.
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 Shop Apotheke Europe 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
– Shop Apotheke Europe 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Drugs) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shop Apotheke Europe in the Retail (Drugs) industry. Now Shop Apotheke Europe can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Shop Apotheke Europe has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Shop Apotheke Europe to build a more holistic ecosystem for Shop Apotheke Europe products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Shop Apotheke Europe can develop new processes and procedures in Retail (Drugs) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shop Apotheke Europe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Shop Apotheke Europe has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Drugs) sector. This continuous investment in analytics has enabled Shop Apotheke Europe to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shop Apotheke Europe to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shop Apotheke Europe 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.
Buying journey improvements
– Shop Apotheke Europe can improve the customer journey of consumers in the Retail (Drugs) 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shop Apotheke Europe can use these opportunities to build new business models that can help the communities that Shop Apotheke Europe operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.
Loyalty marketing
– Shop Apotheke Europe 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.
Threats Shop Apotheke Europe External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shop Apotheke Europe are -
Consumer confidence and its impact on Shop Apotheke Europe 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 Retail (Drugs) industry and other sectors.
Easy access to finance
– Easy access to finance in Retail (Drugs) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shop Apotheke Europe can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Shop Apotheke Europe
– 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 Shop Apotheke Europe.
High dependence on third party suppliers
– Shop Apotheke Europe 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.
Environmental challenges
– Shop Apotheke Europe 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. Shop Apotheke Europe can take advantage of this fund but it will also bring new competitors in the Retail (Drugs) industry.
Technology acceleration in Forth Industrial Revolution
– Shop Apotheke Europe has witnessed rapid integration of technology during Covid-19 in the Retail (Drugs) industry. As one of the leading players in the industry, Shop Apotheke Europe needs to keep up with the evolution of technology in the Retail (Drugs) 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shop Apotheke Europe 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 Shop Apotheke Europe prominent markets.
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 Shop Apotheke Europe 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shop Apotheke Europe may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Drugs) sector.
Regulatory challenges
– Shop Apotheke Europe 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 Retail (Drugs) industry regulations.
Stagnating economy with rate increase
– Shop Apotheke Europe 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 Retail (Drugs) industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shop Apotheke Europe in Retail (Drugs) industry. The Retail (Drugs) 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.
Weighted SWOT Analysis of Shop Apotheke Europe Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shop Apotheke Europe 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 Shop Apotheke Europe 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 Shop Apotheke Europe 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 Shop Apotheke Europe 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 Shop Apotheke Europe needs to make to build a sustainable competitive advantage.