Swot Analysis On Mm It Solutions

Published Date: 02 Nov 2017

SWOT analysis refers to a framework for analysing the internal and external environment, as well as the resources of a business. SWOT analysis is a crucial tool for strategic planning and identifies four key aspects. Firstly, it identifies the internal strengths such as unique resources, strong brand name and financial capabilities among others. Next, the analysis considers the internal weaknesses such as poor organizational cultures, lack of key managerial staff and operational inefficiency among others. Thirdly, the analysis evaluates the existing opportunities in the external environment such as market niches and unsatisfied demand. The final aspect that SWOT analysis considers is any threats from outside the business. Threats may include changes in market preferences, increase in competition and legal regulations among others.

Strengths

MM IT Solutions is well endowed with qualified IT staff to move the business forward. The business mainly involves general and specialist programming, assembling and repair of computers, network solutions, system design, broadband installation and system maintenance. These activities require expertise in computer technology that the business already has. The founder of the business, Millom, is an IT expert, and so are the IT engineers. This shows that the business has a great future; in as far as the nature of the business is concerned.

Weaknesses

The management of MM IT Solutions lack various key skills required for the business to grow. For instance, the recent appointment of a financial director has revealed that the management lacks key financial skills, which is evident in the findings of the new financial director. According to the director, the business lacks sufficient control over general expenses and credit facilities. The business has poor purchasing facilities and budgetary control. The management has given too mush focus on the technical part of the business such that areas such as marketing have been neglected.

The resistance to the Millom’s action to bring most of the systems under the same roof by employees indicate an internal weakness. According to the case study, some have even threatened to leave. The disunity between Millom and the workers may have negative impact on the business.

The business has been expanding rapidly giving rise to the need for a bigger premise. The current premise is congested, and this is expected to continue since the business is expanding each day. The current environment is not conducive for fruitful business operations.

Opportunities

The current growth in the IT industry is a great opportunity of the business. The industry is growing rapidly giving rise to the need for new IT systems and solutions. What could be a new IT technology today could be outdated within months or weeks. From the case study, it is evident that MM IT Solutions has been receiving numerous enquiries regarding emerging IT aspects such as e-marketing, e-auctions and e-procurements among others. According to Millom, this is an opportunity that the business cannot afford to miss.

Threats

The rate at which the nature of the IT industry is changing is alarming, and poses a threat to MM IT Solutions. The systems that the business offers might be required in future owing to the emergence of new and better systems. This means that the business will at one point experience shortages in demand for their current systems. This means that the business will have to conduct continuous research in order to offer current systems and technologies in the industry.

Areas of major concern

Financial management is a vital area that the business has neglected. This has resulted in poor budgetary control and poor accounting practices among others. The business should hire competent financial staff to maintain the books of accounts. This will give clear details of the business’s revenue and expenses, as well as measures to maximize revenues and minimise expenses. A qualified financial manager will be responsible for making budgetary allocations and advising on the financial feasibility of key business projects.

Marketing is vital to any business since it communicates the products and services of the business to potential and existing customers. This calls for a competent marketing team to market the business. The business should also give sufficient budgetary allocations to the department in order to allow for extensive marketing activities. This will result in increase in sales, and consequently profitability for the business.

Owing to the constant changes in the nature of the business, the business will have to set up a research and development unit. This unit will be responsible for tracking the changes in the industry’s technology. The unit will analyse emerging technologies, and recommend a course of action for the business depending on the feasibility of the technology. This will ensure that the business has the best current technology offers for customers.

The business is growing at a rapid rate and the growth is expected to continue in the future. Therefore, the business will have purchase a new premise that will accommodate all business comfortably without cramping. The business should consider the feasibility of buying a premise, or taking the offer by the Local Business Development Agency to lease a premise for 10 years.

The location of the business is also of significance. The location of the various systems will obviously impact on the operations of the business. For instance, locating all systems under the same roof has been received with a lot of resistance from workers. The business should focus on a location or locations that workers are satisfied with, and that impacts positively on the business.

Market segmentation and targeting

Segmentation is a marketing concept that involves dividing prospective buyers into several segments or groups. The market is segmented according to the different needs of customers such that each group represents similar needs. This way satisfying the needs of each segment becomes easier since a business will target the needs that are common in a specific segment by use of the media available to that segment. Market segmentation enables businesses to respond to the needs of various market categories of customers who have different perceptions of the value of a product or service. Market targeting, on the other hand, refers to the process in which a business identifies the needs of a specific segment for which to market its products or services. Targeting specific segments allows a business to focus on a small segment of the market, connect with customers and increase sales. For this reason, MM IT Solutions will have to engage in market segmentation and targeting.

Segmentation will help MM IT Solutions understand the needs of customers in a better way. This will involve understanding the needs of different customers, and the differences in their perceptions of value. Segmentation will assist the business develop the profiles of profiles of the different types of customers. Such profiles are useful when developing products for the target customers, as well as the marketing strategies. Segmentation will also help develop the best messages for the different market segments. Customers like to receive information or messages that are relevant to their needs. Segmentation will help MM IT Solutions to determine which customers are low, medium or high value customers.

Market segmentation will also assist the business in developing distribution systems that are more efficient. Different segments will have different buying patterns and behaviours. Studying such behaviours will help the business determine whether customers prefer buying from the business premise or via the internet. This way, the business can focus resources on the most popular avenue in order to maximise profits.

Targeting, on the other hand, will enable MM IT Solutions to concentrate resources on particular segments identified during segmentation. Targeting will enable the business to strengthen its brand name. This is because the business will have a clear idea on its customers, their needs and preferences, and their buying patterns.

Targeting ensures that a business focuses its advertising efforts depending on the needs of each market segment. Targeting will help the business focus on the different demographics of customers. They include age, income, gender, household size and geographical location among others. Different groups of customers will require different approaches of advertising. Targeting will assist the marketing department of MM IT Solutions to determine the best marketing messages for each segment. This way, the business can create promotional and advertising campaigns to communicate the brand message to a particular segment effectively. This will lead to increased sales, and consequently increased profitability.

Market segmentation for MM IT Solutions

MM IT Solutions will segment its market into four segments namely; online customers, business customers, students and households. Each of the four segments have similar needs concerning why they demand computers or computer services. Segmenting makes the targeting of each segment easier for the benefit of the business.

Online customers

These are the customers that order, as well make payments for the orders online. Such customers have a reliable access to the internet and online payment systems. Such customers mainly demand software programs mainly for business purposes. The main type of advertisement for this segment involves digital marketing.

Business customers

These customers demand business solutions and equipment. The computers demanded by this segment are usually for business purposes. Such customers need computers with high speeds to avoid slowing down business operations. These customers also demand business solutions such as e-marketing and e-procurement among others. The magnitude of sales from this segment is huge compared to the other segments. The main avenues of advertisements for this segment are online advertisements, TV and print media.

Students

The needs of students are quite unique compared to the other two segments. Students require mainly academic software programs such as SPSS and Word processors among others. This segment demands computers with speeds from average to high, with plenty of memory space to store entertainment material. The prices charged for this segment must be lower compared to the online and business customers. The main form of advertisement for this segment is social media marketing, magazines and posters around schools.

Households

Households demand computers and computers services for general uses. A household consumer will demand a computer for various uses. Children mostly play computer games, consumers between 16 - 40 years may require a computer for internet related purposes such as Social media, shopping and research. Households thus require computer systems with the capability to perform the above functions. The speeds of such computers are usually low compared to those in all other segments. The main form of advertising for this segment is TV, newspaper and social media marketing.

Budgetary control

A budget is a financial plan that indicates the various financial allocations to various activities or projects during a particular period of time. Budgetary control refers to the process of developing a plan on what to spend, and making periodical comparisons between the actual expenditures and the planned expenditures. This serves to determine whether the spending plan is on track and if any adjustments are needed. This process is extremely essential in order to control spending in line with an organization’s financial goals. Governments, businesses and households require maintaining budgetary control measures in order to maintain financial stability.

From the case study, it is evident that MM IT Solutions has poor budgetary controls. Maintaining good budgetary control will ensure that the business uses its financial resources efficiently by comparing the actual spending from the planned spending. In order to have good budgetary control, the business’s budgetary control must follow certain principles. First, it must define the responsibilities of the top management. Secondly, the budget needs to include an effective plan of action. Next, the performance must be compared to the actual budget. Fourthly, corrective measures should be taken to correct any discrepancies. In case of any extra budgetary expenses, they must go through the approval of senior management.

Factors to consider when implementing Good budgetary control

Management’s support

The budget must have the approval and the support of the top management. The finance department is responsible for budgeting for the available financial resources. After the budgeting process in complete, the top management approves it for implementation. The management of the business should thus play a crucial role in the budget planning process. The management also play a vital role during the evaluation process. If the evaluation recommends extra funds into the budget, the management approves the disbursement of such funds. The support of an effective management will thus be the beginning point for good budgetary control.

SMART Goals

The goals or targets for the budgetary process should follow the SMART criteria. According to this criterion, the target should be specific; the target should be specific in establishing the tasks, the rationale, the workers involved and the timing of the targets. The targets should be measurable; it should be possible to measure the progress of the process of attaining the targets. The targets should also be attainable; it should be possible to accomplish them with the available resources. The targets should be realistic in that it should portray an objective that it aims at achieving. Lastly, the target must be timely; there should be a time frame for which to achieve the target. The budget targets should follow the SMART criterion so as to have an effective budget control process.

Organisational structure

The success of the budget control process depends to a large extent on the organisational structure. Organisational structure refers to the various tasks allocations, supervision and coordination towards the achievements of the goals of an organization. The structure includes the responsibilities and authorities of all managers. The success of MM IT Solution’s budgetary control process depends on the tasks that are charged to each manager involved in the budget process. Such tasks should be easy to establish or identify. This ensures that those involved in the control process understand their roles and responsibilities towards the success of the process.

Employee competence and participation

The success of the budgetary control process highly depends on team work, as well as the participation of all employees involved. This ensures that all aspects of the budgetary control process are in order and working towards the same objective. Here effective communication is essential so that information is disseminated from the top management down to junior employees. The communication system should be clear so that information regarding any changes reaches all workers involved. Communication should go hand in hand with budgetary education for the staff involved. The management of MM IT Solutions should consider the skills and experience of the budgetary control process in order to ensure its success.

Review of budgetary estimates

The budgetary control process cannot be complete without the review and evaluation of the budget. This ensures that the actual expenditures match the planned expenditures. This process identifies ant discrepancies and recommends courses of action. This is a critical step and the business should hire competent staff to advice on the progress of the budget process. The business should consider its communication system, as well as its feedback system, in order to ensure the success of this step. The review process marks a very significant part of the budget process, and determines its outcome.