KHD Humboldt Wedag Int (KWGG) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Capital Goods
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for KHD Humboldt Wedag Int (Germany)
Based on various researches at Oak Spring University , KHD Humboldt Wedag Int is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, wage bills are increasing, there is increasing trade war between United States & China, geopolitical disruptions, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of KHD Humboldt Wedag Int
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that KHD Humboldt Wedag Int can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the KHD Humboldt Wedag Int, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int can be done for the following purposes –
1. Strategic planning of KHD Humboldt Wedag Int
2. Improving business portfolio management of KHD Humboldt Wedag Int
3. Assessing feasibility of the new initiative in Germany
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of KHD Humboldt Wedag Int
Strengths of KHD Humboldt Wedag Int | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of KHD Humboldt Wedag Int are -
Ability to lead change in Misc. Capital Goods
– KHD Humboldt Wedag Int is one of the leading players in the Misc. Capital Goods industry in Germany. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in Germany but also across the existing markets. The ability to lead change has enabled KHD Humboldt Wedag Int in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of KHD Humboldt Wedag Int in the Capital Goods sector have low bargaining power. KHD Humboldt Wedag Int has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps KHD Humboldt Wedag Int to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Misc. Capital Goods industry
– KHD Humboldt Wedag Int has clearly differentiated products in the market place. This has enabled KHD Humboldt Wedag Int to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped KHD Humboldt Wedag Int to invest into research and development (R&D) and innovation.
Learning organization
- KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at KHD Humboldt Wedag Int emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of KHD Humboldt Wedag Int in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– KHD Humboldt Wedag Int has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled KHD Humboldt Wedag Int to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– KHD Humboldt Wedag Int has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of KHD Humboldt Wedag Int have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of KHD Humboldt Wedag Int comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
Organizational Resilience of KHD Humboldt Wedag Int
– The covid-19 pandemic has put organizational resilience at the centre of everthing KHD Humboldt Wedag Int does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– KHD Humboldt Wedag Int is one of the most innovative firm in Misc. Capital Goods sector.
Successful track record of launching new products
– KHD Humboldt Wedag Int has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. KHD Humboldt Wedag Int 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.
Effective Research and Development (R&D)
– KHD Humboldt Wedag Int has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – KHD Humboldt Wedag Int staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of KHD Humboldt Wedag Int | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KHD Humboldt Wedag Int are -
High operating costs
– Compare to the competitors, KHD Humboldt Wedag Int has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract KHD Humboldt Wedag Int lucrative customers.
Slow to strategic competitive environment developments
– As KHD Humboldt Wedag Int is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
High cash cycle compare to competitors
KHD Humboldt Wedag Int has a high cash cycle compare to other players in the Misc. Capital Goods 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 KHD Humboldt Wedag Int is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but KHD Humboldt Wedag Int needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help KHD Humboldt Wedag Int to focus more on services in the Misc. Capital Goods 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, KHD Humboldt Wedag Int is slow explore the new channels of communication. These new channels of communication can help KHD Humboldt Wedag Int to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Germany, KHD Humboldt Wedag Int needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ less understanding of KHD Humboldt Wedag Int strategy
– From the outside it seems that the employees of KHD Humboldt Wedag Int 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.
Products dominated business model
– Even though KHD Humboldt Wedag Int has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. KHD Humboldt Wedag Int should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, KHD Humboldt Wedag Int 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 Misc. Capital Goods industry using digital technology.
Aligning sales with marketing
– From the outside it seems that KHD Humboldt Wedag Int needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at KHD Humboldt Wedag Int can leverage the sales team experience to cultivate customer relationships as KHD Humboldt Wedag Int is planning to shift buying processes online.
Need for greater diversity
– KHD Humboldt Wedag Int 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.
KHD Humboldt Wedag Int Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of KHD Humboldt Wedag Int are -
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for KHD Humboldt Wedag Int in the Misc. Capital Goods industry. Now KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int to increase its market reach. KHD Humboldt Wedag Int 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, KHD Humboldt Wedag Int can use these opportunities to build new business models that can help the communities that KHD Humboldt Wedag Int operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Using analytics as competitive advantage
– KHD Humboldt Wedag Int has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled KHD Humboldt Wedag Int to build a competitive advantage using analytics. The analytics driven competitive advantage can help KHD Humboldt Wedag Int to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– KHD Humboldt Wedag Int can develop new processes and procedures in Misc. Capital Goods 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int to hire the very best people irrespective of their geographical location.
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. KHD Humboldt Wedag Int can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– KHD Humboldt Wedag Int 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for KHD Humboldt Wedag Int in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– KHD Humboldt Wedag Int 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, KHD Humboldt Wedag Int 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, KHD Humboldt Wedag Int is facing challenges because of the dominance of functional experts in the organization. KHD Humboldt Wedag Int can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats KHD Humboldt Wedag Int External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of KHD Humboldt Wedag Int are -
Consumer confidence and its impact on KHD Humboldt Wedag Int 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 Misc. Capital Goods industry and other sectors.
Environmental challenges
– KHD Humboldt Wedag Int 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. KHD Humboldt Wedag Int can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for KHD Humboldt Wedag Int in Misc. Capital Goods industry. The Misc. Capital Goods 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.
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.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. KHD Humboldt Wedag Int can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. KHD Humboldt Wedag Int 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.
High dependence on third party suppliers
– KHD Humboldt Wedag Int 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, KHD Humboldt Wedag Int may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Increasing wage structure of KHD Humboldt Wedag Int
– 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 KHD Humboldt Wedag Int.
Shortening product life cycle
– it is one of the major threat that KHD Humboldt Wedag Int is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– KHD Humboldt Wedag Int 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 Misc. Capital Goods industry.
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. KHD Humboldt Wedag Int needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents KHD Humboldt Wedag Int with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
Weighted SWOT Analysis of KHD Humboldt Wedag Int Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int 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 KHD Humboldt Wedag Int needs to make to build a sustainable competitive advantage.