KKR SWOT Analysis / Matrix

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

The KKR is one of the leading companies in its industry. KKR 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 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 enables the managers of the KKR to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
KKR 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 KKR strengths, and eradicate its weaknesses.

Step by Step Guide to KKR SWOT Analysis

Strengths of KKR – Internal Strategic Factors

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

  • Strong Free Cash Flow – KKR has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Superb Performance in New Markets – KKR 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.
  • Strong distribution network – Over the years KKR 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.
  • Highly successful at Go To Market strategies for its products.
  • Strong Brand Portfolio – Over the years KKR has invested in building a strong brand portfolio. The SWOT analysis of KKR just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Successful track record of developing new products – product innovation.

Weakness of KKR – Internal Strategic Factors

Weakness are the areas where KKR can improve upon. Strategy is about making choices and weakness are the areas where an organization 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.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • 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. KKR has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • High attrition rate in work force – compare to other organizations in the industry KKR has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Limited success outside core business – Even though KKR is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though KKR 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.
  • 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.

Opportunities for KKR – External Strategic Factors

  • 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 KKR. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • New trends in the consumer behavior can open up new market for the KKR . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of KKR.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as KKR 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 environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for KKR to drive home its advantage in new technology and gain market share in the new product category.
  • The market development will lead to dilution of competitor’s advantage and enable KKR to increase its competitiveness compare to the other competitors.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for KKR to capture new customers and increase its market share.

Threats KKR Facing - External Strategic Factors

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

Limitations of SWOT Analysis for KKR

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 KKR
  • 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 KKR

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 KKR 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 KKR

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)