Owens & Minor SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Owens & Minor managers to do a situational analysis of the company . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Owens & Minor is facing in its current business environment.

The Owens & Minor is one of the leading firms in its industry. Owens & Minor maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly 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 enables 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 Owens & Minor to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Owens & Minor swot analysis / matrix

SWOT Matrix Strategies Objective

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

Step by Step Guide to Owens & Minor SWOT Analysis

Strengths of Owens & Minor – Internal Strategic Factors

As one of the leading firms in its industry, Owens & Minor has numerous strengths that enable 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 Owens & Minor are –

  • 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.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Strong Free Cash Flow – Owens & Minor has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Successful track record of developing new products – product innovation.
  • Good Returns on Capital Expenditure – Owens & Minor is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Highly successful at Go To Market strategies for its products.
  • Superb Performance in New Markets – Owens & Minor has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Strong distribution network – Over the years Owens & Minor has built a reliable distribution network that can reach majority of its potential market.

Weakness of Owens & Minor – Internal Strategic Factors

Weakness are the areas where Owens & Minor 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.

  • Limited success outside core business – Even though Owens & Minor is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • High attrition rate in work force – compare to other organizations in the industry Owens & Minor has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Owens & Minor 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.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Owens & Minor
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • The profitability ratio and Net Contribution % of Owens & Minor are below the industry average.
  • 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.

Opportunities for Owens & Minor – External Strategic Factors

  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Owens & Minor to increase its profitability.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Owens & Minor’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.
  • 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.
  • Government green drive also opens an opportunity for procurement of Owens & Minor products by the state as well as federal government contractors.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Owens & Minor an opportunity to enter a new emerging market.
  • New trends in the consumer behavior can open up new market for the Owens & Minor . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • 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 Owens & Minor to drive home its advantage in new technology and gain market share in the new product category.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Owens & Minor.

Threats Owens & Minor Facing - External Strategic Factors

  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • Imitation of the counterfeit and low quality product is also a threat to Owens & Minor’s product especially in the emerging markets and low income markets.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • 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 Owens & Minor

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 Owens & Minor
  • 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 Owens & Minor

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 Owens & Minor 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 Owens & Minor

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)