salesforce.com SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by salesforce.com managers to do a situational analysis of the organization . It is a handy technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) salesforce.com is facing in its current business environment.

The salesforce.com is one of the leading companies in its industry. salesforce.com 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 salesforce.com to develop four types of strategies:

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

Step by Step Guide to salesforce.com SWOT Analysis

Strengths of salesforce.com – Internal Strategic Factors


As one of the leading organizations in its industry, salesforce.com 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 salesforce.com are –

  • 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.
  • Superb Performance in New Markets – salesforce.com 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.
  • Highly skilled workforce through successful training and learning programs. salesforce.com 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.
  • Strong Free Cash Flow – salesforce.com has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Strong distribution network – Over the years salesforce.com has built a reliable distribution network that can reach majority of its potential market.
  • Good Returns on Capital Expenditure – salesforce.com 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.


Weakness of salesforce.com – Internal Strategic Factors


Weakness are the areas where salesforce.com 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.

  • The profitability ratio and Net Contribution % of salesforce.com are below the industry average.
  • 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 salesforce.com is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • 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 salesforce.com
  • 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. salesforce.com has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Limited success outside core business – Even though salesforce.com 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 salesforce.com has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, salesforce.com 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.

Opportunities for salesforce.com – External Strategic Factors

  • 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 salesforce.com to drive home its advantage in new technology and gain market share in the new product category.
  • 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 salesforce.com in other product categories.
  • The market development will lead to dilution of competitor’s advantage and enable salesforce.com to increase its competitiveness compare to the other competitors.
  • The new technology provides an opportunity to salesforce.com 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.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided salesforce.com an opportunity to enter a new emerging market.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of salesforce.com’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.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of salesforce.com.
  • 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 salesforce.com. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats salesforce.com 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.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • 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.
  • Rising raw material can pose a threat to the salesforce.com profitability.
  • Imitation of the counterfeit and low quality product is also a threat to salesforce.com’s product especially in the emerging markets and low income markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Liability laws in different countries are different and salesforce.com may be exposed to various liability claims given change in policies 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.

Limitations of SWOT Analysis for salesforce.com

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 salesforce.com
  • 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 salesforce.com

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 salesforce.com 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 salesforce.com

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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SWOT Worksheet & Template

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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)