Autoliv SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Autoliv 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) Autoliv is facing in its current business environment.

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

The SWOT Analysis framework facilitates 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 called SWOT Matrix.

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

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

SWOT Matrix Strategies Objective

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

Step by Step Guide to Autoliv SWOT Analysis

Strengths of Autoliv – Internal Strategic Factors

As one of the leading companies in its industry, Autoliv 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 Autoliv are –

  • Successful track record of developing new products – product innovation.
  • Superb Performance in New Markets – Autoliv 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.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • 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.
  • Automation of activities brought consistency of quality to Autoliv products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Free Cash Flow – Autoliv has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Good Returns on Capital Expenditure – Autoliv is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weakness of Autoliv – Internal Strategic Factors

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

  • High attrition rate in work force – compare to other organizations in the industry Autoliv has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Autoliv is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Autoliv is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Autoliv 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.
  • 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. Autoliv has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • 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.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for Autoliv – External Strategic Factors

  • The new technology provides an opportunity to Autoliv 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 trends in the consumer behavior can open up new market for the Autoliv . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Autoliv to increase its profitability.
  • 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.
  • 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 Autoliv. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Government green drive also opens an opportunity for procurement of Autoliv products by the state as well as federal government contractors.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Autoliv to capture new customers and increase its market share.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Autoliv.

Threats Autoliv Facing - External Strategic Factors

  • Liability laws in different countries are different and Autoliv may be exposed to various liability claims given change in policies in those markets.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Imitation of the counterfeit and low quality product is also a threat to Autoliv’s product especially in the emerging markets and low income markets.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Autoliv   in those markets.
  • 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.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those 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.
  • 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.

Limitations of SWOT Analysis for Autoliv

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 Autoliv
  • 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 Autoliv

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 Autoliv 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 Autoliv

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)