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 – increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing commodity prices, technology disruption, there is increasing trade war between United States & China, increasing energy prices, talent flight as more people leaving formal jobs, 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 -

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.

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.

Analytics focus

– Francotyp-Postalia 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 Business Services 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.

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.

High brand equity

– Francotyp-Postalia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Francotyp-Postalia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Highly skilled collaborators

– Francotyp-Postalia has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Francotyp-Postalia have helped the firm to develop new products and bring them quickly to the marketplace.

Training and development

– Francotyp-Postalia has one of the best training and development program in Services 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.

Innovation driven organization

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

Organizational Resilience of Francotyp-Postalia

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

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.

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.

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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 -

Workers concerns about automation

– As automation is fast increasing in the Business Services industry, Francotyp-Postalia needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

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.

Compensation and incentives

– The revenue per employee of Francotyp-Postalia is just above the Business Services 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.

Interest costs

– Compare to the competition, Francotyp-Postalia 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

– 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.

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.

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.

Lack of clear differentiation of Francotyp-Postalia products

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

Aligning sales with marketing

– From the outside it seems that Francotyp-Postalia needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Francotyp-Postalia can leverage the sales team experience to cultivate customer relationships as Francotyp-Postalia is planning to shift buying processes online.

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.

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 -

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 Francotyp-Postalia 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.

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.

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.

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.

Learning at scale

– Online learning technologies has now opened space for Francotyp-Postalia to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.

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.

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.

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.

Better consumer reach

– The expansion of the 5G network will help Francotyp-Postalia to increase its market reach. Francotyp-Postalia 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.

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.

Creating value in data economy

– The success of analytics program of Francotyp-Postalia has opened avenues for new revenue streams for the organization in Business Services industry. This can help Francotyp-Postalia to build a more holistic ecosystem for Francotyp-Postalia products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Francotyp-Postalia is facing challenges because of the dominance of functional experts in the organization. Francotyp-Postalia can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. Francotyp-Postalia can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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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 -

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. Francotyp-Postalia needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.

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.

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.

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.

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.

Stagnating economy with rate increase

– Francotyp-Postalia 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 Business Services industry.

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.

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.

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. Francotyp-Postalia 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Francotyp-Postalia in Business Services industry. The Business 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.

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.

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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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