SWOT Analysis / TOWS Matrix for ZEAL Network (Germany)
Based on various researches at Oak Spring University , ZEAL Network is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing commodity prices, there is increasing trade war between United States & China, there is backlash against globalization, wage bills are increasing,
increasing energy prices, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ZEAL Network can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ZEAL Network, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ZEAL Network 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 ZEAL Network can be done for the following purposes –
1. Strategic planning of ZEAL Network
2. Improving business portfolio management of ZEAL Network
3. Assessing feasibility of the new initiative in Germany
4. Making a Recreational Activities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ZEAL Network
Strengths of ZEAL Network | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ZEAL Network are -
Ability to recruit top talent
– ZEAL Network is one of the leading players in the Recreational Activities 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.
Effective Research and Development (R&D)
– ZEAL Network has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – ZEAL Network staying ahead in the Recreational Activities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Recreational Activities
– ZEAL Network is one of the leading players in the Recreational Activities industry in Germany. Over the years it has not only transformed the business landscape in the Recreational Activities industry in Germany but also across the existing markets. The ability to lead change has enabled ZEAL Network in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– ZEAL Network is present in almost all the verticals within the Recreational Activities industry. This has provided ZEAL Network 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.
Cross disciplinary teams
– Horizontal connected teams at the ZEAL Network 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.
High switching costs
– The high switching costs that ZEAL Network 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.
Learning organization
- ZEAL Network 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 ZEAL Network is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ZEAL Network emphasize – knowledge, initiative, and innovation.
Analytics focus
– ZEAL Network 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 Recreational Activities 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 brand equity
– ZEAL Network has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ZEAL Network to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Recreational Activities industry
- digital transformation varies from industry to industry. For ZEAL Network digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ZEAL Network 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.
Successful track record of launching new products
– ZEAL Network has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ZEAL Network 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.
Superior customer experience
– The customer experience strategy of ZEAL Network in Recreational Activities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of ZEAL Network | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ZEAL Network are -
Capital Spending Reduction
– Even during the low interest decade, ZEAL Network 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 Recreational Activities industry using digital technology.
Lack of clear differentiation of ZEAL Network products
– To increase the profitability and margins on the products, ZEAL Network needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of ZEAL Network, it seems that company is thinking out the frontier risks that can impact Recreational Activities 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.
Ability to respond to the competition
– As the decision making is very deliberative at ZEAL Network, in the dynamic environment of Recreational Activities industry it has struggled to respond to the nimble upstart competition. ZEAL Network has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of ZEAL Network is just above the Recreational Activities 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.
Skills based hiring in Recreational Activities industry
– The stress on hiring functional specialists at ZEAL Network 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, ZEAL Network is slow explore the new channels of communication. These new channels of communication can help ZEAL Network to provide better information regarding Recreational Activities products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, ZEAL Network has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Recreational Activities industry over the last five years. ZEAL Network 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.
Increasing silos among functional specialists
– The organizational structure of ZEAL Network is dominated by functional specialists. It is not different from other players in the Recreational Activities industry, but ZEAL Network needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ZEAL Network to focus more on services in the Recreational Activities industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, ZEAL Network 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
– ZEAL Network 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.
ZEAL Network Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ZEAL Network are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, ZEAL Network 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 ZEAL Network to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Recreational Activities industry, but it has also influenced the consumer preferences. ZEAL Network can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Recreational Activities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for ZEAL Network in the Recreational Activities industry. Now ZEAL Network can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, ZEAL Network can use these opportunities to build new business models that can help the communities that ZEAL Network operates in. Secondly it can use opportunities from government spending in Recreational Activities sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for ZEAL Network in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Activities industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at ZEAL Network 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 Recreational Activities industry.
Manufacturing automation
– ZEAL Network can use the latest technology developments to improve its manufacturing and designing process in Recreational Activities 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects ZEAL Network can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, ZEAL Network is facing challenges because of the dominance of functional experts in the organization. ZEAL Network can utilize new technology in the field of Recreational Activities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– ZEAL Network has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Activities sector. This continuous investment in analytics has enabled ZEAL Network to build a competitive advantage using analytics. The analytics driven competitive advantage can help ZEAL Network to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– ZEAL Network 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.
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. ZEAL Network can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help ZEAL Network to increase its market reach. ZEAL Network 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.
Threats ZEAL Network External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ZEAL Network are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, ZEAL Network may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Activities sector.
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 ZEAL Network.
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.
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. ZEAL Network needs to understand the core reasons impacting the Recreational Activities industry. This will help it in building a better workplace.
Environmental challenges
– ZEAL Network 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. ZEAL Network can take advantage of this fund but it will also bring new competitors in the Recreational Activities industry.
Regulatory challenges
– ZEAL Network 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 Recreational Activities industry regulations.
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 ZEAL Network in the Recreational Activities sector and impact the bottomline of the organization.
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 ZEAL Network business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– ZEAL Network has witnessed rapid integration of technology during Covid-19 in the Recreational Activities industry. As one of the leading players in the industry, ZEAL Network needs to keep up with the evolution of technology in the Recreational Activities 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.
Easy access to finance
– Easy access to finance in Recreational Activities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. ZEAL Network can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– ZEAL Network 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ZEAL Network 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 ZEAL Network prominent markets.
Shortening product life cycle
– it is one of the major threat that ZEAL Network is facing in Recreational Activities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of ZEAL Network Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ZEAL Network 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 ZEAL Network 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 ZEAL Network 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 ZEAL Network 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 ZEAL Network needs to make to build a sustainable competitive advantage.