Cameron International SWOT Analysis / Matrix

Essays, Term Papers & Research Papers

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

The Cameron International is one of the leading organizatations in its industry. Cameron International maintains its prominent 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Cameron International 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 a firm can utilize to exploit external opportunities, counter threats, and build on & protect Cameron International strengths, and eradicate its weaknesses.

Step by Step Guide to Cameron International SWOT Analysis

Strengths of Cameron International – Internal Strategic Factors

As one of the leading firms in its industry, Cameron International 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 Cameron International are –

• Automation of activities brought consistency of quality to Cameron International products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Highly successful at Go To Market strategies for its products.
• Strong Free Cash Flow – Cameron International has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• 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 developing new products – product innovation.
• Strong distribution network – Over the years Cameron International has built a reliable distribution network that can reach majority of its potential market.
• 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.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

Weakness of Cameron International – Internal Strategic Factors

Weakness are the areas where Cameron International 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 Cameron International 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 Cameron International is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• 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 Cameron International
• 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.
• 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.
• 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 Cameron International is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Limited success outside core business – Even though Cameron International 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 Cameron International – External Strategic Factors

• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Cameron International’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.
• 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 Cameron International. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Cameron International to increase its profitability.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Cameron International.
• 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 Cameron International in other product categories.
• Government green drive also opens an opportunity for procurement of Cameron International products by the state as well as federal government contractors.
• 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 Cameron International to drive home its advantage in new technology and gain market share in the new product category.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Cameron International to capture new customers and increase its market share.

Threats Cameron International Facing - External Strategic Factors

• 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Cameron International
• 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.
• 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.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Imitation of the counterfeit and low quality product is also a threat to Cameron International’s product especially in the emerging markets and low income markets.
• Rising raw material can pose a threat to the Cameron International profitability.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Cameron International   in those markets.

Limitations of SWOT Analysis for Cameron International

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 Cameron International
• 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 Cameron International

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 Cameron International 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 Cameron International

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)