Huggies SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Huggies managers to do a situational analysis of the firm . It is an important technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Huggies is facing in its current business environment.

The Huggies is one of the leading companies in its industry. Huggies maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Huggies to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Huggies strengths, and eradicate its weaknesses.

Step by Step Guide to Huggies SWOT Analysis

Strengths of Huggies – Internal Strategic Factors

As one of the leading companies in its industry, Huggies has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Huggies are –

Strong distribution network – Over the years Huggies has built a reliable distribution network that can reach majority of its potential market.
Successful track record of developing new products – product innovation.
High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.
Strong Brand Portfolio – Over the years Huggies has invested in building a strong brand portfolio. The SWOT analysis of Huggies just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Highly skilled workforce through successful training and learning programs. Huggies is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Automation of activities brought consistency of quality to Huggies products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Weakness of Huggies – Internal Strategic Factors

Weakness are the areas where Huggies can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
The profitability ratio and Net Contribution % of Huggies are below the industry average.
The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Huggies has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Huggies is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Investment in Research and Development is below the fastest growing players in the industry. Even though Huggies is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Huggies needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.
Limited success outside core business – Even though Huggies is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for Huggies – External Strategic Factors

Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Huggies’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Huggies in other product categories.
New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Huggies to drive home its advantage in new technology and gain market share in the new product category.
New trends in the consumer behavior can open up new market for the Huggies . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
The new technology provides an opportunity to Huggies to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Huggies. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Huggies to capture new customers and increase its market share.

Threats Huggies Facing - External Strategic Factors

Liability laws in different countries are different and Huggies may be exposed to various liability claims given change in policies in those markets.
Imitation of the counterfeit and low quality product is also a threat to Huggies’s product especially in the emerging markets and low income markets.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Huggies in those markets.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Huggies
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Limitations of SWOT Analysis for Huggies

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Huggies
SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Huggies

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Huggies managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Huggies

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)