Lotto24 AG (LO24n) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lotto24 AG (Germany)

Based on various researches at Oak Spring University , Lotto24 AG is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc

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Introduction to SWOT Analysis of Lotto24 AG

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lotto24 AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lotto24 AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lotto24 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Lotto24 AG can be done for the following purposes –
1. Strategic planning of Lotto24 AG
2. Improving business portfolio management of Lotto24 AG
3. Assessing feasibility of the new initiative in Germany
4. Making a Casinos & Gaming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lotto24 AG

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Strengths of Lotto24 AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Lotto24 AG are -

Organizational Resilience of Lotto24 AG

– The covid-19 pandemic has put organizational resilience at the centre of everthing Lotto24 AG does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Diverse revenue streams

– Lotto24 AG is present in almost all the verticals within the Casinos & Gaming industry. This has provided Lotto24 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.

Ability to lead change in Casinos & Gaming

– Lotto24 AG is one of the leading players in the Casinos & Gaming industry in Germany. Over the years it has not only transformed the business landscape in the Casinos & Gaming industry in Germany but also across the existing markets. The ability to lead change has enabled Lotto24 AG in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Analytics focus

– Lotto24 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 Casinos & Gaming 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.

Training and development

– Lotto24 AG 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.

Sustainable margins compare to other players in Casinos & Gaming industry

– Lotto24 AG has clearly differentiated products in the market place. This has enabled Lotto24 AG to fetch slight price premium compare to the competitors in the Casinos & Gaming industry. The sustainable margins have also helped Lotto24 AG to invest into research and development (R&D) and innovation.

Highly skilled collaborators

– Lotto24 AG has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Casinos & Gaming industry. Secondly the value chain collaborators of Lotto24 AG have helped the firm to develop new products and bring them quickly to the marketplace.

Superior customer experience

– The customer experience strategy of Lotto24 AG in Casinos & Gaming industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Effective Research and Development (R&D)

– Lotto24 AG has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lotto24 AG staying ahead in the Casinos & Gaming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Operational resilience

– The operational resilience strategy of Lotto24 AG comprises – understanding the underlying the factors in the Casinos & Gaming 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.

Ability to recruit top talent

– Lotto24 AG is one of the leading players in the Casinos & Gaming 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.

Innovation driven organization

– Lotto24 AG is one of the most innovative firm in Casinos & Gaming sector.

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Weaknesses of Lotto24 AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Lotto24 AG are -

High operating costs

– Compare to the competitors, Lotto24 AG has high operating costs in the Casinos & Gaming industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lotto24 AG lucrative customers.

Need for greater diversity

– Lotto24 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.

High cash cycle compare to competitors

Lotto24 AG has a high cash cycle compare to other players in the Casinos & Gaming industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Aligning sales with marketing

– From the outside it seems that Lotto24 AG needs to have more collaboration between its sales team and marketing team. Sales professionals in the Casinos & Gaming industry have deep experience in developing customer relationships. Marketing department at Lotto24 AG can leverage the sales team experience to cultivate customer relationships as Lotto24 AG is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative at Lotto24 AG, in the dynamic environment of Casinos & Gaming industry it has struggled to respond to the nimble upstart competition. Lotto24 AG has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Interest costs

– Compare to the competition, Lotto24 AG 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.

Slow to strategic competitive environment developments

– As Lotto24 AG is one of the leading players in the Casinos & Gaming industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Casinos & Gaming industry in last five years.

Increasing silos among functional specialists

– The organizational structure of Lotto24 AG is dominated by functional specialists. It is not different from other players in the Casinos & Gaming industry, but Lotto24 AG needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lotto24 AG to focus more on services in the Casinos & Gaming industry rather than just following the product oriented approach.

Capital Spending Reduction

– Even during the low interest decade, Lotto24 AG 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 Casinos & Gaming industry using digital technology.

Compensation and incentives

– The revenue per employee of Lotto24 AG is just above the Casinos & Gaming 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.

No frontier risks strategy

– From the 10K / annual statement of Lotto24 AG, it seems that company is thinking out the frontier risks that can impact Casinos & Gaming 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.

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Lotto24 AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Lotto24 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, Lotto24 AG can use these opportunities to build new business models that can help the communities that Lotto24 AG operates in. Secondly it can use opportunities from government spending in Casinos & Gaming sector.

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. Lotto24 AG can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

– Lotto24 AG has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Casinos & Gaming sector. This continuous investment in analytics has enabled Lotto24 AG to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lotto24 AG to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Better consumer reach

– The expansion of the 5G network will help Lotto24 AG to increase its market reach. Lotto24 AG 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Lotto24 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 Casinos & Gaming 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 Lotto24 AG 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 Lotto24 AG to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Lotto24 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 Lotto24 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.

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 Lotto24 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.

Use of Bitcoin and other crypto currencies for transactions in Casinos & Gaming industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lotto24 AG in the Casinos & Gaming industry. Now Lotto24 AG 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, Lotto24 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Casinos & Gaming industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lotto24 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. Lotto24 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.

Building a culture of innovation

– managers at Lotto24 AG 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 Casinos & Gaming industry.

Buying journey improvements

– Lotto24 AG can improve the customer journey of consumers in the Casinos & Gaming 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.

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Threats Lotto24 AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Lotto24 AG are -

High dependence on third party suppliers

– Lotto24 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.

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 Lotto24 AG.

Shortening product life cycle

– it is one of the major threat that Lotto24 AG is facing in Casinos & Gaming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Lotto24 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 Lotto24 AG prominent markets.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lotto24 AG in Casinos & Gaming industry. The Casinos & Gaming 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Lotto24 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 Casinos & Gaming sector.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Casinos & Gaming industry are lowering. It can presents Lotto24 AG with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Casinos & Gaming sector.

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. Lotto24 AG needs to understand the core reasons impacting the Casinos & Gaming industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Lotto24 AG has witnessed rapid integration of technology during Covid-19 in the Casinos & Gaming industry. As one of the leading players in the industry, Lotto24 AG needs to keep up with the evolution of technology in the Casinos & Gaming 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.

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 Lotto24 AG business can come under increasing regulations regarding data privacy, data security, etc.

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. Lotto24 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

– Lotto24 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. Lotto24 AG can take advantage of this fund but it will also bring new competitors in the Casinos & Gaming industry.

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Weighted SWOT Analysis of Lotto24 AG Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lotto24 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 Lotto24 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 Lotto24 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 Lotto24 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 Lotto24 AG needs to make to build a sustainable competitive advantage.

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