The Applicant Series #12: PEST and SWOT Analysis

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The Applicant Series showcases works done by hopeful writers who have applied with inkmypapers over the years. The results and comments will be provided first, followed by the actual essay/report written by the applicant

Applicant’s Results: Failed

Title: Analyse Creative Technology Macro and micro environment and provide recommendations.

Comments: This is a 1500 word piece where the applicant is supposed to do a PEST and SWOT analysis on Singapore’s Creative Technology and provide a recommendation based on the analysis.

The applicant makes a grave mistake in that his PEST has nothing to do with trends happening in Singapore. Instead, he is very descriptive about what each factor means rather than what each factor constitutes. Also, while doing the analysis, students should never use Creative Technology as the focal point, as what the applicant did here. The country’s trends should be the focal point and then a separate section can mentioned the trends implication on the company (in this case, Creative Technology)

 If I am the lecturer, the entire PEST analysis will receive zero marks.

The Porter Five Forces is pretty bad as well. It shows that the applicant did not fully understand the framework and how it should be done, before working on it. Based on the PEST and Porter Five Forces, we rejected the applicant without looking at the SWOT analysis.

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Creative Technology is a globally recognized, Singapore based company. It provides personal digital entertainment equipment and is internationally acknowledged for its innovation.

Here is an overview of the PEST analysis of Creative Technology:

• PEST Analysis:

Technological Factors:

The burgeoning technology industry has enabled companies to inculcate “innovation” as an integral component of their ongoing strategies(Anonymous, 2014)..

The recent fad within the digital market is persistent creativity, as such companies whittle away without a consistent dose of innovation. This is one of the reasons as to why the trait of being “out of the box” has become sacrosanct for the expanding industry. Today, innovation, and bringing about a realistic experience via entertainment sets, is being touted upon by countless digital giants, through the launch of their advanced and creatively blueprinted technology, which emphasizes upon providing an extraordinarily lifelike, yet outstandingly wonderful user experience (Koberg, Detience & Heppard, 2003). This scenario entails upon Creative Technology to stay ahead of all such developments within the industry and be abreast with the emerging needs and wants of tech savvy users. In fact it calls for Creative Technology to invest in Research and Development to bestow upon its users an unimaginatively wonderful experience, so it helps in customer retention and in building a tumultuous brand image.

Social Factors:

Social factors immensely impact businesses, especially when it comes to a global technology firm such as Creative Technology. This predominantly is because, it has to stay in line with the users’ demands and concerns pertaining to the device that they are using. So Creative, has to communicate its image as a global technology brand that provides an outstandingly realistic experience, and that too within the limits of health and care constraints (Kit, 2010).

Legal Factors:

There are innumerable legal implications which technology firms have to tackle. This can be in terms of health concerns that users might have and also fluctuating services from database or web providers. One recent example is of a legal standoff with the technology guru, Huawei, where the former was providing incompetent internet services to Creative Technology (Tortajada, 2012).

Creative had no choice but to take the case to the court and claim its money back. This entails that Creative technology must be very cautious regarding the services that it outsources, as some providers are capable of providing flawed services, thus poorly impacting its own functions.

• Porter’s Five Forces:

Porter’s five forces analytically examine the propitiousness and attractiveness of a business. Here is an analysis for Creative Technology (Tortajada, 2016).

Bargaining Power of Suppliers:

Creative Technology administers an intricate web of suppliers and subsidiaries. They altogether limit the bargaining power of the existing suppliers, enabling Creative to enjoy complete control over them. This describes that the switching costs will not be high, which leaves no room for forward integration by suppliers. Ergo, the company contemporarily holds a much greater power against its suppliers.

Bargaining Power of Customers:

The bargaining power of customers is high and Creative strives to maintain this power, by investing significantly in R&D and introducing innovative technological products to enhance its own brand value and establish an image for itself that is impossible for competitors to beat.

Creative also has an edge in the digital personal entertainment industry, because over the years, it has earned brand loyalty from its users by introducing “out of the box products” and still if it launches any product, it is likely to receive a warm response.

Threat of New Entrants:

The threat of new entrants is fairly low in case of Creative Technology. This is predominantly due to two factors. One is the cost barrier factor, as no new brand can install huge sums of money to establish a technology that is better than Creative Technology, since it takes a lot of investment in doing so, which no new company is capable of handling or funding in this case.

The other factor is brand loyalty, which Creative Technology has managed to gage over the past decades, with the launch of products like Sound blaster. No new brand is capable of earning that loyalty overnight.  

The loyalty factor mitigates threat of new entrants for Creative Technology, however, in the future, new competitors are likely to penetrate the market, which means that at the moment, the threat of new entrants for Creative Technology is poor to moderate.

Threat of Substitutes:

The threat of substitutes is high for Creative Technology, and it seems to be soaring with the passage of time. This is because several other brands are coming up with similar products, both within and outside of Singapore. There is not much that Creative Technology can do to mitigate the threat of substitutes at this point, except to introduce better products with enhanced features and greater efficiency.

Competitive Rivalry between the Existing Players:

All the product categories of Creative Technology have matured and it is in a struggling phase to revamp its product line and come to the fore once again.

According to Wong Hoo (2014), the company is being squeezed from large firms like Apple at one end and by small, low cost Chinese competitors at the other end and is being pressurized for losing the competitive edge it once had. Creative Technology, cognizant of the current scenario needs to focus on its core products which at the moment are Android design kits and sound systems for gaming. It can also needs to increase its investment in R&D, like global market leaders such as Apple and Samsung, to gain a greater market share, locally.

• SWOT:

Strengths:

The following strengths of the company enable it to withstand hurdles to its growth, vis-à-vis its weaknesses (Anonymous, 2016):

1. Creative Technology has been in business for several decades and has earned an image for itself and its products by receiving worldwide recognition for each product category.
2. Creative is one of the first technology brands that introduced audio enhancements and products, which gives it an edge in the digital personal entertainment industry.
3. It has a very affordable range of products which attracts and targets customers of different demographical backgrounds.

Weaknesses:

The following inadequacies serve as barricades to the growth of the business (Anonymous, 2016):

1. The company has a poorly organized financial budgeting system, and they are unable to fairly allocate budget to all sectors of the company.
2. They have stopped investing in innovation
3. The digital industry has become more competitive with more companies offering similar products with enhanced features being sold at a lower price
4. Creative Technology’s reputation has tarnished over the years especially after the litigation charges with Apple.

Opportunities:

This section highlights the most significant areas that the company can focus upon to strive:

1. With the technology industry growing immensely, Creative needs to use this growth to its advantage by investing more in internet marketing.
2. The economy is plummeting, due to which people spend less on entertainment related products. This situation can be used by Creative,in effectively promoting itself, through promotional offers, such as buying the next product on a discounted price.
3. Creative Technology can pair up with other audio technology brands to gain economies of scale and to reduce costs for itself.

Threats:

This section shines light on the potential threats to Competitive Technology:

1. The pricing strategy which Creative Technology incorporates is not market competitive as competitors such as Shinto have products at lesser prices, which is why customers prefer them. This puts Creative in extreme danger as it can lose competition to upcoming and existing technology firms.

• Recommendations:

Creative Technology has been in the consumer electronics market for several decades now. It started off as an innovative digital brand with its emphasis on audio technology; however, with the passage of time, it lost its stratagem to innovate and stand out and started to wither after 2007. The main factor that contributed to its downfall was the fact that it relinquished innovation, as it reached the maturity stage of its product cycle (Kit, 2018). To get hold of the glory that Competitive Technology enjoyed during the mid-90s it needs to revamp its entire strategy and focus on innovation and creating products that wow the customers and helps in boosting profit and creating value.

Creative Technology is recently taking initiatives to come up with realist audio technology for entertainment lovers and gamers. This technology needs to be authentically tested and the company must invest heavily in R&D for this purpose to come up with a product that is perfect in every way and enables it to earn revenues in the long run.

Another area where Creative Technology can focus upon is collaborating with other market leaders in promoting its products.