Equifax SWOT Analysis / Matrix

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

The Equifax is one of the leading companies in its industry. Equifax 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 organization 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 Equifax to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Equifax swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Equifax strengths, and eradicate its weaknesses.

Step by Step Guide to Equifax SWOT Analysis

Strengths of Equifax – Internal Strategic Factors

As one of the leading companies in its industry, Equifax 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 Equifax 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.
  • 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 – Equifax has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • 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.
  • Highly successful at Go To Market strategies for its 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.
  • Automation of activities brought consistency of quality to Equifax products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Equifax has invested in building a strong brand portfolio. The SWOT analysis of Equifax just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

Weakness of Equifax – Internal Strategic Factors

Weakness are the areas where Equifax 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.

  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Equifax 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 Equifax has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • 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 Equifax
  • Limited success outside core business – Even though Equifax is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • 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 profitability ratio and Net Contribution % of Equifax are below the industry average.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Equifax is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Equifax – External Strategic Factors

  • 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 Equifax. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Government green drive also opens an opportunity for procurement of Equifax products by the state as well as federal government contractors.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Equifax’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.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Equifax 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 Equifax in other product categories.
  • The market development will lead to dilution of competitor’s advantage and enable Equifax to increase its competitiveness compare to the other competitors.
  • The new technology provides an opportunity to Equifax 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.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Equifax.

Threats Equifax Facing - External Strategic Factors

  • Liability laws in different countries are different and Equifax may be exposed to various liability claims given change in policies in those 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 Equifax
  • 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.
  • 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.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Equifax   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.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for Equifax

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 Equifax
  • 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 Equifax

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 Equifax 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 Equifax

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)