Allstate SWOT Analysis / Matrix

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

The Allstate is one of the leading companies in its industry. Allstate maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis a highly 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Allstate to develop four types of strategies:

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

SWOT Matrix Strategies Objective

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

Step by Step Guide to Allstate SWOT Analysis

Strengths of Allstate – Internal Strategic Factors


As one of the leading companies in its industry, Allstate 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 Allstate are –

  • Good Returns on Capital Expenditure – Allstate is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Highly successful at Go To Market strategies for its products.
  • Successful track record of developing new products – product innovation.
  • Strong Brand Portfolio – Over the years Allstate has invested in building a strong brand portfolio. The SWOT analysis of Allstate just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • 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 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 Free Cash Flow – Allstate 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 Allstate has built a reliable distribution network that can reach majority of its potential market.


Weakness of Allstate – Internal Strategic Factors


Weakness are the areas where Allstate 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.

  • 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 Allstate 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 Allstate is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Allstate is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • 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 Allstate
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Allstate 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.

Opportunities for Allstate – External Strategic Factors

  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Allstate an opportunity to enter a new emerging market.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Allstate’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.
  • Government green drive also opens an opportunity for procurement of Allstate products by the state as well as federal government contractors.
  • The new technology provides an opportunity to Allstate 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.
  • The market development will lead to dilution of competitor’s advantage and enable Allstate to increase its competitiveness compare to the other competitors.
  • 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.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Allstate to capture new customers and increase its market share.
  • New trends in the consumer behavior can open up new market for the Allstate . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Allstate Facing - External Strategic Factors

  • 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 Allstate’s product especially in the emerging markets and low income markets.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Allstate
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Allstate   in those markets.
  • Rising raw material can pose a threat to the Allstate profitability.
  • Liability laws in different countries are different and Allstate may be exposed to various liability claims given change in policies in those markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for Allstate

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 Allstate
  • 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 Allstate

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 Allstate 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 Allstate

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)