KPS (HACGn) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for KPS (Germany)

Based on various researches at Oak Spring University , KPS is operating in a macro-environment that has been destablized by – increasing energy prices, there is backlash against globalization, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, 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%, increasing government debt because of Covid-19 spendings, wage bills are increasing, etc

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Introduction to SWOT Analysis of KPS

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KPS can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KPS, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which KPS 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 KPS can be done for the following purposes –
1. Strategic planning of KPS
2. Improving business portfolio management of KPS
3. Assessing feasibility of the new initiative in Germany
4. Making a Computer Networks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of KPS

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

The strengths of KPS are -

Strong track record of project management in the Computer Networks industry

– KPS 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 KPS in the Technology sector have low bargaining power. KPS has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps KPS to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– KPS is present in almost all the verticals within the Computer Networks industry. This has provided KPS 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 recruit top talent

– KPS is one of the leading players in the Computer Networks 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 KPS 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.

Superior customer experience

– The customer experience strategy of KPS in Computer Networks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Cross disciplinary teams

– Horizontal connected teams at the KPS 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.

Highly skilled collaborators

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

Effective Research and Development (R&D)

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

Learning organization

- KPS 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 KPS is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at KPS emphasize – knowledge, initiative, and innovation.

High brand equity

– KPS has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled KPS to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– KPS is one of the most innovative firm in Computer Networks sector.

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

The weaknesses of KPS are -

Compensation and incentives

– The revenue per employee of KPS is just above the Computer Networks 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 KPS, it seems that company is thinking out the frontier risks that can impact Computer Networks 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.

Aligning sales with marketing

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

Increasing silos among functional specialists

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

Slow to strategic competitive environment developments

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

Lack of clear differentiation of KPS products

– To increase the profitability and margins on the products, KPS needs to provide more differentiated products than what it is currently offering in the marketplace.

Skills based hiring in Computer Networks industry

– The stress on hiring functional specialists at KPS 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.

Need for greater diversity

– KPS 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 operating costs

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

High bargaining power of channel partners in Computer Networks industry

– because of the regulatory requirements in Germany, KPS 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 Computer Networks industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, KPS is slow explore the new channels of communication. These new channels of communication can help KPS to provide better information regarding Computer Networks products and services. It can also build an online community to further reach out to potential customers.

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

The opportunities of KPS are -

Use of Bitcoin and other crypto currencies for transactions in Computer Networks industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for KPS in the Computer Networks industry. Now KPS can target international markets with far fewer capital restrictions requirements than the existing system.

Manufacturing automation

– KPS can use the latest technology developments to improve its manufacturing and designing process in Computer Networks 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.

Using analytics as competitive advantage

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

Building a culture of innovation

– managers at KPS 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 Computer Networks industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects KPS can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for KPS 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, KPS 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 KPS to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Developing new processes and practices

– KPS can develop new processes and procedures in Computer Networks 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.

Creating value in data economy

– The success of analytics program of KPS has opened avenues for new revenue streams for the organization in Computer Networks industry. This can help KPS to build a more holistic ecosystem for KPS products in the Computer Networks industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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 KPS 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, KPS can use these opportunities to build new business models that can help the communities that KPS operates in. Secondly it can use opportunities from government spending in Computer Networks 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. KPS can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Lowering marketing communication costs

– 5G expansion will open new opportunities for KPS in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Networks industry, and it will provide faster access to the consumers.

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

The threats of KPS are -

Environmental challenges

– KPS 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. KPS can take advantage of this fund but it will also bring new competitors in the Computer Networks industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Computer Networks industry are lowering. It can presents KPS with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Networks 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. KPS needs to understand the core reasons impacting the Computer Networks industry. This will help it in building a better workplace.

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 KPS business can come under increasing regulations regarding data privacy, data security, 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 KPS.

Increasing wage structure of KPS

– 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 KPS.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for KPS in Computer Networks industry. The Computer Networks 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.

Easy access to finance

– Easy access to finance in Computer Networks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. KPS can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Consumer confidence and its impact on KPS 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 Computer Networks industry and other sectors.

Increasing international competition and downward pressure on margins

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

Stagnating economy with rate increase

– KPS 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 Computer Networks industry.

Technology acceleration in Forth Industrial Revolution

– KPS has witnessed rapid integration of technology during Covid-19 in the Computer Networks industry. As one of the leading players in the industry, KPS needs to keep up with the evolution of technology in the Computer Networks 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.

Shortening product life cycle

– it is one of the major threat that KPS is facing in Computer Networks sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of KPS Template, Example

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

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