Data Modul AG (DAMG) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Peripherals
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Data Modul AG (Germany)
Based on various researches at Oak Spring University , Data Modul AG is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing energy prices, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Data Modul AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Data Modul AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Data Modul 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 Data Modul AG can be done for the following purposes –
1. Strategic planning of Data Modul AG
2. Improving business portfolio management of Data Modul AG
3. Assessing feasibility of the new initiative in Germany
4. Making a Computer Peripherals sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Data Modul AG
Strengths of Data Modul AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Data Modul AG are -
Superior customer experience
– The customer experience strategy of Data Modul AG in Computer Peripherals 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 Data Modul 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.
Diverse revenue streams
– Data Modul AG is present in almost all the verticals within the Computer Peripherals industry. This has provided Data Modul 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.
Operational resilience
– The operational resilience strategy of Data Modul AG comprises – understanding the underlying the factors in the Computer Peripherals 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.
High brand equity
– Data Modul AG has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Data Modul AG to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Data Modul AG 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 Data Modul AG is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Data Modul AG emphasize – knowledge, initiative, and innovation.
Digital Transformation in Computer Peripherals industry
- digital transformation varies from industry to industry. For Data Modul AG digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Data Modul 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.
Ability to lead change in Computer Peripherals
– Data Modul AG is one of the leading players in the Computer Peripherals industry in Germany. Over the years it has not only transformed the business landscape in the Computer Peripherals industry in Germany but also across the existing markets. The ability to lead change has enabled Data Modul AG in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Data Modul AG 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.
Low bargaining power of suppliers
– Suppliers of Data Modul AG in the Technology sector have low bargaining power. Data Modul AG has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Data Modul AG to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Data Modul AG has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Data Modul AG staying ahead in the Computer Peripherals industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Computer Peripherals industry
– Data Modul AG has clearly differentiated products in the market place. This has enabled Data Modul AG to fetch slight price premium compare to the competitors in the Computer Peripherals industry. The sustainable margins have also helped Data Modul AG to invest into research and development (R&D) and innovation.
Weaknesses of Data Modul AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Data Modul AG are -
Capital Spending Reduction
– Even during the low interest decade, Data Modul 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 Computer Peripherals industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Data Modul AG is slow explore the new channels of communication. These new channels of communication can help Data Modul AG to provide better information regarding Computer Peripherals products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Data Modul 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.
Products dominated business model
– Even though Data Modul AG has some of the most successful models in the Computer Peripherals industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Data Modul AG should strive to include more intangible value offerings along with its core products and services.
High dependence on Data Modul AG ‘s star products
– The top 2 products and services of Data Modul AG still accounts for major business revenue. This dependence on star products in Computer Peripherals industry has resulted into insufficient focus on developing new products, even though Data Modul AG has relatively successful track record of launching new products.
Lack of clear differentiation of Data Modul AG products
– To increase the profitability and margins on the products, Data Modul AG needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Data Modul AG is just above the Computer Peripherals 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 Data Modul AG, it seems that company is thinking out the frontier risks that can impact Computer Peripherals 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.
Interest costs
– Compare to the competition, Data Modul 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.
Aligning sales with marketing
– From the outside it seems that Data Modul AG needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Peripherals industry have deep experience in developing customer relationships. Marketing department at Data Modul AG can leverage the sales team experience to cultivate customer relationships as Data Modul AG is planning to shift buying processes online.
High cash cycle compare to competitors
Data Modul AG has a high cash cycle compare to other players in the Computer Peripherals industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Data Modul AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Data Modul AG are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Data Modul AG 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
– Data Modul AG has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Peripherals sector. This continuous investment in analytics has enabled Data Modul AG to build a competitive advantage using analytics. The analytics driven competitive advantage can help Data Modul AG to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Peripherals industry, but it has also influenced the consumer preferences. Data Modul 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 Data Modul 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 Computer Peripherals industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Data Modul AG is facing challenges because of the dominance of functional experts in the organization. Data Modul AG can utilize new technology in the field of Computer Peripherals industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Data Modul 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Data Modul 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 Data Modul AG to hire the very best people irrespective of their geographical location.
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 Data Modul 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Data Modul 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.
Buying journey improvements
– Data Modul AG can improve the customer journey of consumers in the Computer Peripherals 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.
Use of Bitcoin and other crypto currencies for transactions in Computer Peripherals industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Data Modul AG in the Computer Peripherals industry. Now Data Modul AG can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Data Modul AG 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.
Learning at scale
– Online learning technologies has now opened space for Data Modul 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.
Threats Data Modul AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Data Modul AG are -
Regulatory challenges
– Data Modul AG 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 Computer Peripherals industry regulations.
Environmental challenges
– Data Modul 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. Data Modul AG can take advantage of this fund but it will also bring new competitors in the Computer Peripherals industry.
Consumer confidence and its impact on Data Modul 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 Computer Peripherals industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Data Modul AG is facing in Computer Peripherals sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Data Modul 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 Data Modul 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 Data Modul AG in Computer Peripherals industry. The Computer Peripherals 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.
Increasing wage structure of Data Modul AG
– 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 Data Modul AG.
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.
Technology acceleration in Forth Industrial Revolution
– Data Modul AG has witnessed rapid integration of technology during Covid-19 in the Computer Peripherals industry. As one of the leading players in the industry, Data Modul AG needs to keep up with the evolution of technology in the Computer Peripherals 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.
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 Data Modul AG.
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 Data Modul AG in the Computer Peripherals sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Data Modul 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 Computer Peripherals sector.
High dependence on third party suppliers
– Data Modul 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.
Weighted SWOT Analysis of Data Modul AG Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Data Modul 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 Data Modul 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 Data Modul 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 Data Modul 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 Data Modul AG needs to make to build a sustainable competitive advantage.