NanoFocus (N2FGn) SWOT Analysis / TOWS Matrix / MBA Resources
Scientific & Technical Instr.
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for NanoFocus (Germany)
Based on various researches at Oak Spring University , NanoFocus is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, technology disruption,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NanoFocus can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NanoFocus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NanoFocus 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 NanoFocus can be done for the following purposes –
1. Strategic planning of NanoFocus
2. Improving business portfolio management of NanoFocus
3. Assessing feasibility of the new initiative in Germany
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NanoFocus
Strengths of NanoFocus | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NanoFocus are -
High switching costs
– The high switching costs that NanoFocus 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.
Learning organization
- NanoFocus 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 NanoFocus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at NanoFocus emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– NanoFocus has clearly differentiated products in the market place. This has enabled NanoFocus to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped NanoFocus to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of NanoFocus in the Technology sector have low bargaining power. NanoFocus has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NanoFocus to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of NanoFocus in Scientific & Technical Instr. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– NanoFocus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled NanoFocus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of NanoFocus
– The covid-19 pandemic has put organizational resilience at the centre of everthing NanoFocus does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– NanoFocus 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 Scientific & Technical Instr. 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.
Ability to lead change in Scientific & Technical Instr.
– NanoFocus is one of the leading players in the Scientific & Technical Instr. industry in Germany. Over the years it has not only transformed the business landscape in the Scientific & Technical Instr. industry in Germany but also across the existing markets. The ability to lead change has enabled NanoFocus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– NanoFocus is one of the most innovative firm in Scientific & Technical Instr. sector.
Training and development
– NanoFocus has one of the best training and development program in Technology industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the NanoFocus 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.
Weaknesses of NanoFocus | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NanoFocus are -
Slow decision making process
– As mentioned earlier in the report, NanoFocus has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Scientific & Technical Instr. industry over the last five years. NanoFocus 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.
Increasing silos among functional specialists
– The organizational structure of NanoFocus is dominated by functional specialists. It is not different from other players in the Scientific & Technical Instr. industry, but NanoFocus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NanoFocus to focus more on services in the Scientific & Technical Instr. 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 NanoFocus supply chain. Even after few cautionary changes, NanoFocus is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left NanoFocus vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, NanoFocus 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.
Ability to respond to the competition
– As the decision making is very deliberative at NanoFocus, in the dynamic environment of Scientific & Technical Instr. industry it has struggled to respond to the nimble upstart competition. NanoFocus has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in Germany, NanoFocus 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 Scientific & Technical Instr. industry.
Skills based hiring in Scientific & Technical Instr. industry
– The stress on hiring functional specialists at NanoFocus 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.
High cash cycle compare to competitors
NanoFocus has a high cash cycle compare to other players in the Scientific & Technical Instr. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on NanoFocus ‘s star products
– The top 2 products and services of NanoFocus still accounts for major business revenue. This dependence on star products in Scientific & Technical Instr. industry has resulted into insufficient focus on developing new products, even though NanoFocus has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of NanoFocus, it seems that company is thinking out the frontier risks that can impact Scientific & Technical Instr. industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Employees’ less understanding of NanoFocus strategy
– From the outside it seems that the employees of NanoFocus 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.
NanoFocus Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NanoFocus are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for NanoFocus in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Scientific & Technical Instr. industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, NanoFocus 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.
Use of Bitcoin and other crypto currencies for transactions in Scientific & Technical Instr. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for NanoFocus in the Scientific & Technical Instr. industry. Now NanoFocus can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– NanoFocus can develop new processes and procedures in Scientific & Technical Instr. 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.
Building a culture of innovation
– managers at NanoFocus 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 Scientific & Technical Instr. industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Scientific & Technical Instr. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. NanoFocus 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. NanoFocus 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.
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 NanoFocus 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
– NanoFocus can use the latest technology developments to improve its manufacturing and designing process in Scientific & Technical Instr. 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.
Learning at scale
– Online learning technologies has now opened space for NanoFocus 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for NanoFocus 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 NanoFocus to hire the very best people irrespective of their geographical location.
Buying journey improvements
– NanoFocus can improve the customer journey of consumers in the Scientific & Technical Instr. industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NanoFocus 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 NanoFocus to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NanoFocus can use these opportunities to build new business models that can help the communities that NanoFocus operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Threats NanoFocus External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NanoFocus are -
Increasing wage structure of NanoFocus
– 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 NanoFocus.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NanoFocus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Scientific & Technical Instr. sector.
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. NanoFocus needs to understand the core reasons impacting the Scientific & Technical Instr. industry. This will help it in building a better workplace.
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 NanoFocus in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
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. NanoFocus 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.
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.
Technology acceleration in Forth Industrial Revolution
– NanoFocus has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, NanoFocus needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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.
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.
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 NanoFocus.
Stagnating economy with rate increase
– NanoFocus 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 Scientific & Technical Instr. industry.
Environmental challenges
– NanoFocus 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. NanoFocus can take advantage of this fund but it will also bring new competitors in the Scientific & Technical Instr. industry.
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 NanoFocus business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– NanoFocus 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.
Weighted SWOT Analysis of NanoFocus Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NanoFocus 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 NanoFocus 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 NanoFocus 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 NanoFocus 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 NanoFocus needs to make to build a sustainable competitive advantage.