Masterflex (MZXG) SWOT Analysis / TOWS Matrix / MBA Resources
Fabricated Plastic & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Masterflex (Germany)
Based on various researches at Oak Spring University , Masterflex is operating in a macro-environment that has been destablized by – increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, geopolitical disruptions, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, increasing energy prices,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Masterflex can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Masterflex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Masterflex 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 Masterflex can be done for the following purposes –
1. Strategic planning of Masterflex
2. Improving business portfolio management of Masterflex
3. Assessing feasibility of the new initiative in Germany
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Masterflex
Strengths of Masterflex | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Masterflex are -
Effective Research and Development (R&D)
– Masterflex has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Masterflex staying ahead in the Fabricated Plastic & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Fabricated Plastic & Rubber industry
- digital transformation varies from industry to industry. For Masterflex digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Masterflex 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.
Training and development
– Masterflex has one of the best training and development program in Basic Materials 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.
Highly skilled collaborators
– Masterflex has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fabricated Plastic & Rubber industry. Secondly the value chain collaborators of Masterflex have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Masterflex 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 Fabricated Plastic & Rubber 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.
Strong track record of project management in the Fabricated Plastic & Rubber industry
– Masterflex is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Fabricated Plastic & Rubber
– Masterflex is one of the leading players in the Fabricated Plastic & Rubber industry in Germany. Over the years it has not only transformed the business landscape in the Fabricated Plastic & Rubber industry in Germany but also across the existing markets. The ability to lead change has enabled Masterflex 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 Masterflex 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.
Operational resilience
– The operational resilience strategy of Masterflex comprises – understanding the underlying the factors in the Fabricated Plastic & Rubber 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.
Low bargaining power of suppliers
– Suppliers of Masterflex in the Basic Materials sector have low bargaining power. Masterflex has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Masterflex to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Masterflex
– The covid-19 pandemic has put organizational resilience at the centre of everthing Masterflex does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Masterflex has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Masterflex to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Masterflex | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Masterflex are -
High dependence on Masterflex ‘s star products
– The top 2 products and services of Masterflex still accounts for major business revenue. This dependence on star products in Fabricated Plastic & Rubber industry has resulted into insufficient focus on developing new products, even though Masterflex has relatively successful track record of launching new products.
High cash cycle compare to competitors
Masterflex has a high cash cycle compare to other players in the Fabricated Plastic & Rubber industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Masterflex is just above the Fabricated Plastic & Rubber 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.
Employees’ less understanding of Masterflex strategy
– From the outside it seems that the employees of Masterflex 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.
Low market penetration in new markets
– Outside its home market of Germany, Masterflex needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Fabricated Plastic & Rubber industry
– The stress on hiring functional specialists at Masterflex 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.
Ability to respond to the competition
– As the decision making is very deliberative at Masterflex, in the dynamic environment of Fabricated Plastic & Rubber industry it has struggled to respond to the nimble upstart competition. Masterflex has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Masterflex is slow explore the new channels of communication. These new channels of communication can help Masterflex to provide better information regarding Fabricated Plastic & Rubber products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Masterflex is dominated by functional specialists. It is not different from other players in the Fabricated Plastic & Rubber industry, but Masterflex needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Masterflex to focus more on services in the Fabricated Plastic & Rubber industry rather than just following the product oriented approach.
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 Masterflex supply chain. Even after few cautionary changes, Masterflex is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Masterflex vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Masterflex products
– To increase the profitability and margins on the products, Masterflex needs to provide more differentiated products than what it is currently offering in the marketplace.
Masterflex Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Masterflex are -
Developing new processes and practices
– Masterflex can develop new processes and procedures in Fabricated Plastic & Rubber 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 Masterflex 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 Masterflex to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Masterflex can use these opportunities to build new business models that can help the communities that Masterflex operates in. Secondly it can use opportunities from government spending in Fabricated Plastic & Rubber sector.
Better consumer reach
– The expansion of the 5G network will help Masterflex to increase its market reach. Masterflex 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.
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. Masterflex can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Fabricated Plastic & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Masterflex in the Fabricated Plastic & Rubber industry. Now Masterflex can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Masterflex 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.
Creating value in data economy
– The success of analytics program of Masterflex has opened avenues for new revenue streams for the organization in Fabricated Plastic & Rubber industry. This can help Masterflex to build a more holistic ecosystem for Masterflex products in the Fabricated Plastic & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Masterflex can use the latest technology developments to improve its manufacturing and designing process in Fabricated Plastic & Rubber 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 Masterflex 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, Masterflex is facing challenges because of the dominance of functional experts in the organization. Masterflex can utilize new technology in the field of Fabricated Plastic & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Masterflex in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fabricated Plastic & Rubber industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Masterflex 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 Fabricated Plastic & Rubber industry.
Threats Masterflex External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Masterflex are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Masterflex 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 Masterflex prominent markets.
Regulatory challenges
– Masterflex 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 Fabricated Plastic & Rubber industry regulations.
Stagnating economy with rate increase
– Masterflex 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 Fabricated Plastic & Rubber industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Masterflex in Fabricated Plastic & Rubber industry. The Fabricated Plastic & Rubber 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.
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. Masterflex needs to understand the core reasons impacting the Fabricated Plastic & Rubber industry. This will help it in building a better workplace.
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 Masterflex business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Masterflex may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fabricated Plastic & Rubber sector.
Shortening product life cycle
– it is one of the major threat that Masterflex is facing in Fabricated Plastic & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Masterflex 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents Masterflex with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fabricated Plastic & Rubber sector.
Increasing wage structure of Masterflex
– 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 Masterflex.
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.
Weighted SWOT Analysis of Masterflex Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Masterflex 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 Masterflex 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 Masterflex 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 Masterflex 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 Masterflex needs to make to build a sustainable competitive advantage.
