Polaris Industries SWOT Analysis / Matrix

Essays, Term Papers & Research Papers

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

The Polaris Industries is one of the leading organizatations in its industry. Polaris Industries maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the firm 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 Polaris Industries 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 Polaris Industries strengths, and eradicate its weaknesses.

Step by Step Guide to Polaris Industries SWOT Analysis

Strengths of Polaris Industries – Internal Strategic Factors

As one of the leading organizations in its industry, Polaris Industries 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 Polaris Industries are –

• Successful track record of developing new products – product innovation.
• Highly successful at Go To Market strategies for its products.
• Strong distribution network – Over the years Polaris Industries has built a reliable distribution network that can reach majority of its potential market.
• Strong Free Cash Flow – Polaris Industries has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Automation of activities brought consistency of quality to Polaris Industries products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Good Returns on Capital Expenditure – Polaris Industries is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.
• 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.

Weakness of Polaris Industries – Internal Strategic Factors

Weakness are the areas where Polaris Industries 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.

• Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Polaris Industries 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.
• 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. Polaris Industries has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Polaris Industries 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.
• 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 Polaris Industries is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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.
• 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 Polaris Industries

Opportunities for Polaris Industries – 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 Polaris Industries to drive home its advantage in new technology and gain market share in the new product category.
• The new technology provides an opportunity to Polaris Industries 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.
• Government green drive also opens an opportunity for procurement of Polaris Industries 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 Polaris Industries an opportunity to enter a new emerging market.
• 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 Polaris Industries in other product categories.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Polaris Industries to increase its profitability.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Polaris Industries to capture new customers and increase its market share.
• The market development will lead to dilution of competitor’s advantage and enable Polaris Industries to increase its competitiveness compare to the other competitors.

Threats Polaris Industries Facing - External Strategic Factors

• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Imitation of the counterfeit and low quality product is also a threat to Polaris Industries’s product especially in the emerging markets and low income markets.
• Rising raw material can pose a threat to the Polaris Industries profitability.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Liability laws in different countries are different and Polaris Industries may be exposed to various liability claims given change in policies 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 company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Polaris Industries

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 Polaris Industries
• 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 Polaris Industries

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 Polaris Industries 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 Polaris Industries

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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Polaris Industries

Example of Weighted SWOT Analysis

You can email us to get an example document of Weighted SWOT analysis.

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)