Service Corp. International SWOT Analysis / Matrix

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

The Service Corp. International is one of the leading companies in its industry. Service Corp. International maintains its prominent 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 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 Service Corp. International 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 a firm can use to exploit external opportunities, counter threats, and build on & protect Service Corp. International strengths, and eradicate its weaknesses.

Step by Step Guide to Service Corp. International SWOT Analysis

Strengths of Service Corp. International – Internal Strategic Factors

As one of the leading companies in its industry, Service Corp. International 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 Service Corp. International are –

• 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.
• Highly successful at Go To Market strategies for its products.
• Strong Brand Portfolio – Over the years Service Corp. International has invested in building a strong brand portfolio. The SWOT analysis of Service Corp. International just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Good Returns on Capital Expenditure – Service Corp. International 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.
• Strong distribution network – Over the years Service Corp. International has built a reliable distribution network that can reach majority of its potential market.
• Superb Performance in New Markets – Service Corp. International 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.
• Automation of activities brought consistency of quality to Service Corp. International products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Weakness of Service Corp. International – Internal Strategic Factors

Weakness are the areas where Service Corp. International can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

• 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.
• High attrition rate in work force – compare to other organizations in the industry Service Corp. International has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• 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 Service Corp. International is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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. Service Corp. International 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 Service Corp. International 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.
• 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.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Service Corp. International is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Service Corp. International – External Strategic Factors

• New trends in the consumer behavior can open up new market for the Service Corp. International . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• 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 Service Corp. International. 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 taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Service Corp. International to increase its profitability.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Service Corp. International’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 Service Corp. International in other product categories.
• Government green drive also opens an opportunity for procurement of Service Corp. International products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable Service Corp. International to increase its competitiveness compare to the other competitors.
• 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 Service Corp. International to drive home its advantage in new technology and gain market share in the new product category.

Threats Service Corp. International 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.
• Rising raw material can pose a threat to the Service Corp. International profitability.
• Imitation of the counterfeit and low quality product is also a threat to Service Corp. International’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.
• 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.
• 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Service Corp. International   in those markets.
• 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 Service Corp. International

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 Service Corp. International
• 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 Service Corp. International

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 Service Corp. International 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 Service Corp. International

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)