Cooper-Standard Holdings SWOT Analysis / Matrix

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

The Cooper-Standard Holdings is one of the leading companies in its industry. Cooper-Standard Holdings maintains its dominant position in market by carefully 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 helps 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Cooper-Standard Holdings 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 main purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Cooper-Standard Holdings strengths, and eradicate its weaknesses.

Step by Step Guide to Cooper-Standard Holdings SWOT Analysis

Strengths of Cooper-Standard Holdings – Internal Strategic Factors

As one of the leading companies in its industry, Cooper-Standard Holdings 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 Cooper-Standard Holdings are –

• Highly skilled workforce through successful training and learning programs. Cooper-Standard Holdings 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.
• Successful track record of developing new products – product innovation.
• Good Returns on Capital Expenditure – Cooper-Standard Holdings is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Brand Portfolio – Over the years Cooper-Standard Holdings has invested in building a strong brand portfolio. The SWOT analysis of Cooper-Standard Holdings 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 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.
• 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.
• Strong Free Cash Flow – Cooper-Standard Holdings 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 Cooper-Standard Holdings has built a reliable distribution network that can reach majority of its potential market.

Weakness of Cooper-Standard Holdings – Internal Strategic Factors

Weakness are the areas where Cooper-Standard Holdings 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.

• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Cooper-Standard Holdings is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• 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. Cooper-Standard Holdings has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• 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 Cooper-Standard Holdings
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• 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 Cooper-Standard Holdings is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• High attrition rate in work force – compare to other organizations in the industry Cooper-Standard Holdings has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• The profitability ratio and Net Contribution % of Cooper-Standard Holdings are below the industry average.

Opportunities for Cooper-Standard Holdings – External Strategic Factors

• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Cooper-Standard Holdings to capture new customers and increase its market share.
• 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.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Cooper-Standard Holdings’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.
• 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 Cooper-Standard Holdings 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 Cooper-Standard Holdings to increase its profitability.
• The market development will lead to dilution of competitor’s advantage and enable Cooper-Standard Holdings to increase its competitiveness compare to the other competitors.
• 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 Cooper-Standard Holdings. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Cooper-Standard Holdings an opportunity to enter a new emerging market.

Threats Cooper-Standard Holdings Facing - External Strategic Factors

• Imitation of the counterfeit and low quality product is also a threat to Cooper-Standard Holdings’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.
• 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Cooper-Standard Holdings
• 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.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Rising raw material can pose a threat to the Cooper-Standard Holdings profitability.

Limitations of SWOT Analysis for Cooper-Standard Holdings

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 Cooper-Standard Holdings
• 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 Cooper-Standard Holdings

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 Cooper-Standard Holdings 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 Cooper-Standard Holdings

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)