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 – technology disruption, geopolitical disruptions, increasing commodity prices, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing energy prices, increasing transportation and logistics costs, increasing household debt because of falling income levels, 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 -

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.

Ability to lead change in Computer Networks

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

Analytics focus

– KPS 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 Computer Networks 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.

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.

Training and development

– KPS has one of the best training and development program in Technology 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.

Operational resilience

– The operational resilience strategy of KPS comprises – understanding the underlying the factors in the Computer Networks 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.

Sustainable margins compare to other players in Computer Networks industry

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

Successful track record of launching new products

– KPS has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. KPS 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.

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.

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.

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.

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.

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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 -

High cash cycle compare to competitors

KPS has a high cash cycle compare to other players in the Computer Networks industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Employees’ less understanding of KPS strategy

– From the outside it seems that the employees of KPS 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 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 KPS supply chain. Even after few cautionary changes, KPS is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left KPS vulnerable to further global disruptions in South East Asia.

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.

Workers concerns about automation

– As automation is fast increasing in the Computer Networks industry, KPS 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.

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.

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.

High dependence on KPS ‘s star products

– The top 2 products and services of KPS still accounts for major business revenue. This dependence on star products in Computer Networks industry has resulted into insufficient focus on developing new products, even though KPS has relatively successful track record of launching new products.

Interest costs

– Compare to the competition, KPS 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

– 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.

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.

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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 -

Redefining models of collaboration and team work

– As explained in the weaknesses section, KPS is facing challenges because of the dominance of functional experts in the organization. KPS can utilize new technology in the field of Computer Networks industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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.

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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Computer Networks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. KPS 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. KPS 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 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.

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.

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.

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.

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.

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.

Buying journey improvements

– KPS can improve the customer journey of consumers in the Computer Networks 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, KPS 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for KPS 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 KPS to hire the very best people irrespective of their geographical location.

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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 -

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.

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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, KPS may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of 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.

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.

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.

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.

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.

High dependence on third party suppliers

– KPS 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.

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 KPS in the Computer Networks sector and impact the bottomline of the organization.

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. KPS 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.

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.

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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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