Westinghouse Air Brake Technologies SWOT Analysis / Matrix

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

The Westinghouse Air Brake Technologies is one of the leading firms in its industry. Westinghouse Air Brake Technologies maintains its dominant 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 company 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 Westinghouse Air Brake Technologies to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Westinghouse Air Brake Technologies swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Westinghouse Air Brake Technologies strengths, and eradicate its weaknesses.

Step by Step Guide to Westinghouse Air Brake Technologies SWOT Analysis

Strengths of Westinghouse Air Brake Technologies – Internal Strategic Factors

As one of the leading companies in its industry, Westinghouse Air Brake Technologies 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 Westinghouse Air Brake Technologies are –

  • Highly skilled workforce through successful training and learning programs. Westinghouse Air Brake Technologies 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 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.
  • Superb Performance in New Markets – Westinghouse Air Brake Technologies 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 Free Cash Flow – Westinghouse Air Brake Technologies has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Strong Brand Portfolio – Over the years Westinghouse Air Brake Technologies has invested in building a strong brand portfolio. The SWOT analysis of Westinghouse Air Brake Technologies just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Automation of activities brought consistency of quality to Westinghouse Air Brake Technologies products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong distribution network – Over the years Westinghouse Air Brake Technologies has built a reliable distribution network that can reach majority of its potential market.

Weakness of Westinghouse Air Brake Technologies – Internal Strategic Factors

Weakness are the areas where Westinghouse Air Brake Technologies 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.

  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Westinghouse Air Brake Technologies 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.
  • High attrition rate in work force – compare to other organizations in the industry Westinghouse Air Brake Technologies has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • 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.
  • 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. Westinghouse Air Brake Technologies has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • 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.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Westinghouse Air Brake Technologies is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Westinghouse Air Brake Technologies – External Strategic Factors

  • 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.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Westinghouse Air Brake Technologies an opportunity to enter a new emerging market.
  • The market development will lead to dilution of competitor’s advantage and enable Westinghouse Air Brake Technologies to increase its competitiveness compare to the other competitors.
  • 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 Westinghouse Air Brake Technologies in other product categories.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Westinghouse Air Brake Technologies.
  • 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 Westinghouse Air Brake Technologies. 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 technology provides an opportunity to Westinghouse Air Brake Technologies 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 Westinghouse Air Brake Technologies products by the state as well as federal government contractors.

Threats Westinghouse Air Brake Technologies Facing - External Strategic Factors

  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Liability laws in different countries are different and Westinghouse Air Brake Technologies 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.
  • 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.
  • 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.
  • Imitation of the counterfeit and low quality product is also a threat to Westinghouse Air Brake Technologies’s product especially in the emerging markets and low income markets.
  • Rising raw material can pose a threat to the Westinghouse Air Brake Technologies profitability.

Limitations of SWOT Analysis for Westinghouse Air Brake Technologies

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 Westinghouse Air Brake Technologies
  • 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 Westinghouse Air Brake Technologies

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 Westinghouse Air Brake Technologies 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 Westinghouse Air Brake Technologies

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

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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)