Varian Medical Systems SWOT Analysis / Matrix

Essays, Term Papers & Research Papers

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

The Varian Medical Systems is one of the leading companies in its industry. Varian Medical Systems 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 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Varian Medical Systems 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 core purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Varian Medical Systems strengths, and eradicate its weaknesses.

Step by Step Guide to Varian Medical Systems SWOT Analysis

Strengths of Varian Medical Systems – Internal Strategic Factors

As one of the leading companies in its industry, Varian Medical Systems 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 Varian Medical Systems are –

• Automation of activities brought consistency of quality to Varian Medical Systems products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Successful track record of developing new products – product innovation.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Superb Performance in New Markets – Varian Medical Systems 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.
• 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.
• 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.
• Strong distribution network – Over the years Varian Medical Systems has built a reliable distribution network that can reach majority of its potential market.
• Highly successful at Go To Market strategies for its products.

Weakness of Varian Medical Systems – Internal Strategic Factors

Weakness are the areas where Varian Medical Systems 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.

• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• High attrition rate in work force – compare to other organizations in the industry Varian Medical Systems 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 Varian Medical Systems is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Varian Medical Systems 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.
• 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 Varian Medical Systems is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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.
• 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 Varian Medical Systems – External Strategic Factors

• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Varian Medical Systems to increase its profitability.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Varian Medical Systems.
• 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 Varian Medical Systems’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.
• New trends in the consumer behavior can open up new market for the Varian Medical Systems . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Varian Medical Systems to capture new customers and increase its market share.
• 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 Varian Medical Systems to drive home its advantage in new technology and gain market share in the new product category.
• Government green drive also opens an opportunity for procurement of Varian Medical Systems products by the state as well as federal government contractors.

Threats Varian Medical Systems 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.
• Liability laws in different countries are different and Varian Medical Systems may be exposed to various liability claims given change in policies in those markets.
• 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.
• Imitation of the counterfeit and low quality product is also a threat to Varian Medical Systems’s product especially in the emerging markets and low income markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Varian Medical Systems
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Limitations of SWOT Analysis for Varian Medical Systems

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 Varian Medical Systems
• 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 Varian Medical Systems

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 Varian Medical Systems 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 Varian Medical Systems

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 Varian Medical Systems

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)