Top Education (1752) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Top Education (Hong Kong)
Based on various researches at Oak Spring University , Top Education is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices,
supply chains are disrupted by pandemic , increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Top Education can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Top Education, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Top Education 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 Top Education can be done for the following purposes –
1. Strategic planning of Top Education
2. Improving business portfolio management of Top Education
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Top Education
Strengths of Top Education | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Top Education are -
High switching costs
– The high switching costs that Top Education 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.
Low bargaining power of suppliers
– Suppliers of Top Education in the Services sector have low bargaining power. Top Education has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Top Education to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Top Education is present in almost all the verticals within the Schools industry. This has provided Top Education 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.
Innovation driven organization
– Top Education is one of the most innovative firm in Schools sector.
High brand equity
– Top Education has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Top Education to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Top Education comprises – understanding the underlying the factors in the Schools 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.
Learning organization
- Top Education 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 Top Education is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Top Education emphasize – knowledge, initiative, and innovation.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For Top Education digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Top Education 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.
Ability to lead change in Schools
– Top Education is one of the leading players in the Schools industry in Hong Kong. Over the years it has not only transformed the business landscape in the Schools industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Top Education in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Top Education
– The covid-19 pandemic has put organizational resilience at the centre of everthing Top Education does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Top Education has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Top Education staying ahead in the Schools industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Schools industry
– Top Education has clearly differentiated products in the market place. This has enabled Top Education to fetch slight price premium compare to the competitors in the Schools industry. The sustainable margins have also helped Top Education to invest into research and development (R&D) and innovation.
Weaknesses of Top Education | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Top Education are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Top Education is slow explore the new channels of communication. These new channels of communication can help Top Education to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Top Education products
– To increase the profitability and margins on the products, Top Education needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Top Education supply chain. Even after few cautionary changes, Top Education is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Top Education vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Top Education is one of the leading players in the Schools industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Schools industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Top Education has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Schools industry over the last five years. Top Education 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.
Capital Spending Reduction
– Even during the low interest decade, Top Education 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 Schools industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Schools industry, Top Education 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.
High dependence on Top Education ‘s star products
– The top 2 products and services of Top Education still accounts for major business revenue. This dependence on star products in Schools industry has resulted into insufficient focus on developing new products, even though Top Education has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Top Education is just above the Schools 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.
Aligning sales with marketing
– From the outside it seems that Top Education needs to have more collaboration between its sales team and marketing team. Sales professionals in the Schools industry have deep experience in developing customer relationships. Marketing department at Top Education can leverage the sales team experience to cultivate customer relationships as Top Education is planning to shift buying processes online.
Skills based hiring in Schools industry
– The stress on hiring functional specialists at Top Education 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.
Top Education Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Top Education are -
Developing new processes and practices
– Top Education can develop new processes and procedures in Schools 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.
Learning at scale
– Online learning technologies has now opened space for Top Education 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.
Creating value in data economy
– The success of analytics program of Top Education has opened avenues for new revenue streams for the organization in Schools industry. This can help Top Education to build a more holistic ecosystem for Top Education products in the Schools industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Top Education to increase its market reach. Top Education 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.
Leveraging digital technologies
– Top Education 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Schools industry, but it has also influenced the consumer preferences. Top Education can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Top Education 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.
Building a culture of innovation
– managers at Top Education 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 Schools industry.
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. Top Education can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Schools industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Top Education in the Schools industry. Now Top Education can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Top Education can use these opportunities to build new business models that can help the communities that Top Education operates in. Secondly it can use opportunities from government spending in Schools sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Top Education 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 Top Education to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Top Education 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 Top Education to hire the very best people irrespective of their geographical location.
Threats Top Education External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Top Education are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Top Education may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Schools sector.
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 Top Education in the Schools sector and impact the bottomline of the organization.
Consumer confidence and its impact on Top Education 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 Schools industry and other sectors.
Increasing wage structure of Top Education
– 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 Top Education.
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.
Technology acceleration in Forth Industrial Revolution
– Top Education has witnessed rapid integration of technology during Covid-19 in the Schools industry. As one of the leading players in the industry, Top Education needs to keep up with the evolution of technology in the Schools 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.
Easy access to finance
– Easy access to finance in Schools industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Top Education can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Top Education 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.
Regulatory challenges
– Top Education 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 Schools industry regulations.
Environmental challenges
– Top Education 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. Top Education can take advantage of this fund but it will also bring new competitors in the Schools industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Schools industry are lowering. It can presents Top Education with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Schools sector.
Shortening product life cycle
– it is one of the major threat that Top Education is facing in Schools sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Top Education needs to understand the core reasons impacting the Schools industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Top Education Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Top Education 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 Top Education 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 Top Education 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 Top Education 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 Top Education needs to make to build a sustainable competitive advantage.