SNP Schneider (SHFG) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SNP Schneider (Germany)

Based on various researches at Oak Spring University , SNP Schneider is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing energy prices, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of SNP Schneider

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

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

The strengths of SNP Schneider are -

Sustainable margins compare to other players in Computer Services industry

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

Learning organization

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

Training and development

– SNP Schneider 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.

Low bargaining power of suppliers

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

Ability to lead change in Computer Services

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

Organizational Resilience of SNP Schneider

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

Ability to recruit top talent

– SNP Schneider is one of the leading players in the Computer Services 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.

Operational resilience

– The operational resilience strategy of SNP Schneider comprises – understanding the underlying the factors in the Computer Services 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.

Strong track record of project management in the Computer Services industry

– SNP Schneider is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Superior customer experience

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

Innovation driven organization

– SNP Schneider is one of the most innovative firm in Computer Services sector.

High switching costs

– The high switching costs that SNP Schneider 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.

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

The weaknesses of SNP Schneider are -

Lack of clear differentiation of SNP Schneider products

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

Need for greater diversity

– SNP Schneider 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.

Interest costs

– Compare to the competition, SNP Schneider 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.

Products dominated business model

– Even though SNP Schneider has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SNP Schneider should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

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

Increasing silos among functional specialists

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

Slow to harness new channels of communication

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

High operating costs

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

Low market penetration in new markets

– Outside its home market of Germany, SNP Schneider needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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 SNP Schneider supply chain. Even after few cautionary changes, SNP Schneider is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SNP Schneider vulnerable to further global disruptions in South East Asia.

Employees’ less understanding of SNP Schneider strategy

– From the outside it seems that the employees of SNP Schneider 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.

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

The opportunities of SNP Schneider are -

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

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

Better consumer reach

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

Using analytics as competitive advantage

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

Reforming the budgeting process

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

Changes in consumer behavior post Covid-19

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

Redefining models of collaboration and team work

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

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. SNP Schneider can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Buying journey improvements

– SNP Schneider can improve the customer journey of consumers in the Computer Services 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SNP Schneider can use these opportunities to build new business models that can help the communities that SNP Schneider operates in. Secondly it can use opportunities from government spending in Computer Services sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for SNP Schneider 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 Services industry, and it will provide faster access to the consumers.

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. SNP Schneider 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 SNP Schneider has opened avenues for new revenue streams for the organization in Computer Services industry. This can help SNP Schneider to build a more holistic ecosystem for SNP Schneider products in the Computer Services 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 SNP Schneider 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.

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

The threats of SNP Schneider are -

Shortening product life cycle

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

Easy access to finance

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

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.

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 SNP Schneider business can come under increasing regulations regarding data privacy, data security, etc.

High dependence on third party suppliers

– SNP Schneider 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SNP Schneider 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 Services sector.

Consumer confidence and its impact on SNP Schneider 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 Services industry and other sectors.

Stagnating economy with rate increase

– SNP Schneider 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 Services industry.

Technology acceleration in Forth Industrial Revolution

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

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for SNP Schneider in Computer Services industry. The Computer Services 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 SNP Schneider

– 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 SNP Schneider.

Increasing international competition and downward pressure on margins

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

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Weighted SWOT Analysis of SNP Schneider Template, Example

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

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