7Road (797) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for 7Road (Hong Kong)
Based on various researches at Oak Spring University , 7Road is operating in a macro-environment that has been destablized by – technology disruption, there is increasing trade war between United States & China, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that 7Road can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the 7Road, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which 7Road 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 7Road can be done for the following purposes –
1. Strategic planning of 7Road
2. Improving business portfolio management of 7Road
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of 7Road
Strengths of 7Road | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of 7Road are -
Cross disciplinary teams
– Horizontal connected teams at the 7Road 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.
Ability to lead change in Computer Services
– 7Road is one of the leading players in the Computer Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Computer Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled 7Road in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- 7Road 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 7Road is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at 7Road emphasize – knowledge, initiative, and innovation.
Analytics focus
– 7Road 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 Computer Services industry. The technology infrastructure of Hong Kong 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.
Innovation driven organization
– 7Road is one of the most innovative firm in Computer Services sector.
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For 7Road digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. 7Road 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.
Highly skilled collaborators
– 7Road has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of 7Road have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Computer Services industry
– 7Road has clearly differentiated products in the market place. This has enabled 7Road to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped 7Road to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of 7Road in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of 7Road in the Technology sector have low bargaining power. 7Road has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps 7Road to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– 7Road has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled 7Road to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– 7Road 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.
Weaknesses of 7Road | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of 7Road are -
Workers concerns about automation
– As automation is fast increasing in the Computer Services industry, 7Road 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.
Interest costs
– Compare to the competition, 7Road 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.
High operating costs
– Compare to the competitors, 7Road has high operating costs in the Computer Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract 7Road lucrative customers.
Lack of clear differentiation of 7Road products
– To increase the profitability and margins on the products, 7Road 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 7Road needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Services industry have deep experience in developing customer relationships. Marketing department at 7Road can leverage the sales team experience to cultivate customer relationships as 7Road is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, 7Road is slow explore the new channels of communication. These new channels of communication can help 7Road to provide better information regarding Computer Services products and services. It can also build an online community to further reach out to potential customers.
High dependence on 7Road ‘s star products
– The top 2 products and services of 7Road still accounts for major business revenue. This dependence on star products in Computer Services industry has resulted into insufficient focus on developing new products, even though 7Road has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of 7Road is dominated by functional specialists. It is not different from other players in the Computer Services industry, but 7Road needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help 7Road to focus more on services in the Computer Services industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at 7Road, in the dynamic environment of Computer Services industry it has struggled to respond to the nimble upstart competition. 7Road has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As 7Road is one of the leading players in the Computer Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Services industry in last five years.
Low market penetration in new markets
– Outside its home market of Hong Kong, 7Road needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
7Road Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of 7Road are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. 7Road 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. 7Road 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, 7Road is facing challenges because of the dominance of functional experts in the organization. 7Road can utilize new technology in the field of Computer Services 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 7Road in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Services industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of 7Road has opened avenues for new revenue streams for the organization in Computer Services industry. This can help 7Road to build a more holistic ecosystem for 7Road products in the Computer Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– 7Road has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
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 7Road 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.
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. 7Road can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– 7Road 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.
Using analytics as competitive advantage
– 7Road has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Services sector. This continuous investment in analytics has enabled 7Road to build a competitive advantage using analytics. The analytics driven competitive advantage can help 7Road to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– 7Road can develop new processes and procedures in Computer Services 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 7Road 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 Computer Services industry.
Learning at scale
– Online learning technologies has now opened space for 7Road 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 7Road 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 7Road to hire the very best people irrespective of their geographical location.
Threats 7Road External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of 7Road are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for 7Road in Computer Services industry. The Computer 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.
Regulatory challenges
– 7Road 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 Computer Services industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Services industry are lowering. It can presents 7Road with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Services sector.
Shortening product life cycle
– it is one of the major threat that 7Road is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. 7Road 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
– 7Road has witnessed rapid integration of technology during Covid-19 in the Computer Services industry. As one of the leading players in the industry, 7Road needs to keep up with the evolution of technology in the Computer 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, 7Road may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
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 7Road business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– 7Road 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, 7Road 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 7Road prominent markets.
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 7Road in the Computer Services sector and impact the bottomline of the organization.
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. 7Road needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.
Weighted SWOT Analysis of 7Road Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at 7Road 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 7Road 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 7Road 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 7Road 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 7Road needs to make to build a sustainable competitive advantage.