Francotyp-Postalia (FPHG) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Francotyp-Postalia (Germany)

Based on various researches at Oak Spring University , Francotyp-Postalia is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of Francotyp-Postalia

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

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Strengths of Francotyp-Postalia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Francotyp-Postalia are -

Learning organization

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

Cross disciplinary teams

– Horizontal connected teams at the Francotyp-Postalia 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.

Low bargaining power of suppliers

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

Ability to recruit top talent

– Francotyp-Postalia is one of the leading players in the Business 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.

Strong track record of project management in the Business Services industry

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

Effective Research and Development (R&D)

– Francotyp-Postalia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Francotyp-Postalia staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Francotyp-Postalia is present in almost all the verticals within the Business Services industry. This has provided Francotyp-Postalia 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.

Digital Transformation in Business Services industry

- digital transformation varies from industry to industry. For Francotyp-Postalia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Francotyp-Postalia 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.

Operational resilience

– The operational resilience strategy of Francotyp-Postalia comprises – understanding the underlying the factors in the Business 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.

Sustainable margins compare to other players in Business Services industry

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

Ability to lead change in Business Services

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

Innovation driven organization

– Francotyp-Postalia is one of the most innovative firm in Business Services sector.

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Weaknesses of Francotyp-Postalia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Francotyp-Postalia are -

Slow decision making process

– As mentioned earlier in the report, Francotyp-Postalia has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. Francotyp-Postalia 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.

High operating costs

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

Capital Spending Reduction

– Even during the low interest decade, Francotyp-Postalia 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 Business Services industry using digital technology.

Increasing silos among functional specialists

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

Products dominated business model

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

Skills based hiring in Business Services industry

– The stress on hiring functional specialists at Francotyp-Postalia 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.

Need for greater diversity

– Francotyp-Postalia 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.

Slow to harness new channels of communication

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

High bargaining power of channel partners in Business Services industry

– because of the regulatory requirements in Germany, Francotyp-Postalia is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Business Services industry.

Low market penetration in new markets

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

Ability to respond to the competition

– As the decision making is very deliberative at Francotyp-Postalia, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. Francotyp-Postalia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Francotyp-Postalia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Francotyp-Postalia are -

Increase in government spending

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

Building a culture of innovation

– managers at Francotyp-Postalia 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 Business Services industry.

Finding new ways to collaborate

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

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Francotyp-Postalia 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 Francotyp-Postalia to hire the very best people irrespective of their geographical location.

Changes in consumer behavior post Covid-19

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

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. Francotyp-Postalia can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

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

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Francotyp-Postalia 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 Francotyp-Postalia to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Manufacturing automation

– Francotyp-Postalia can use the latest technology developments to improve its manufacturing and designing process in Business Services 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 Francotyp-Postalia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Francotyp-Postalia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.

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

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

Low interest rates

– Even though inflation is raising its head in most developed economies, Francotyp-Postalia 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.

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Threats Francotyp-Postalia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Francotyp-Postalia are -

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 Francotyp-Postalia.

High dependence on third party suppliers

– Francotyp-Postalia 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, Francotyp-Postalia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Business Services sector.

Consumer confidence and its impact on Francotyp-Postalia 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 Business Services industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Francotyp-Postalia 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 Francotyp-Postalia prominent markets.

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 Francotyp-Postalia business can come under increasing regulations regarding data privacy, data security, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents Francotyp-Postalia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.

Environmental challenges

– Francotyp-Postalia 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. Francotyp-Postalia can take advantage of this fund but it will also bring new competitors in the Business Services industry.

Technology acceleration in Forth Industrial Revolution

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

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.

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 Francotyp-Postalia in the Business Services sector and impact the bottomline of the organization.

Easy access to finance

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

Shortening product life cycle

– it is one of the major threat that Francotyp-Postalia is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Francotyp-Postalia Template, Example

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

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