Tops Holding SWOT Analysis / Matrix

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

The Tops Holding is one of the leading organizatations in its industry. Tops Holding maintains its prominent position in market by critically 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 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 Tops Holding 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 primary purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Tops Holding strengths, and eradicate its weaknesses.

Step by Step Guide to Tops Holding SWOT Analysis

Strengths of Tops Holding – Internal Strategic Factors

As one of the leading organizations in its industry, Tops Holding 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 Tops Holding are –

Strong distribution network – Over the years Tops Holding has built a reliable distribution network that can reach majority of its potential market.
Highly successful at Go To Market strategies for its products.
Superb Performance in New Markets – Tops Holding 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.
Good Returns on Capital Expenditure – Tops Holding is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Highly skilled workforce through successful training and learning programs. Tops Holding 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 developing new products – product innovation.
Strong Brand Portfolio – Over the years Tops Holding has invested in building a strong brand portfolio. The SWOT analysis of Tops Holding 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.

Weakness of Tops Holding – Internal Strategic Factors

Weakness are the areas where Tops Holding 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.

Not highly successful at integrating firms with different work culture. As mentioned earlier even though Tops Holding is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
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. Tops Holding has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
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.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Tops Holding 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.
The profitability ratio and Net Contribution % of Tops Holding are below the industry average.
Investment in Research and Development is below the fastest growing players in the industry. Even though Tops Holding 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.
Limited success outside core business – Even though Tops Holding is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for Tops Holding – External Strategic Factors

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

Threats Tops Holding Facing - External Strategic Factors

The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Liability laws in different countries are different and Tops Holding may be exposed to various liability claims given change in policies in those markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Tops Holding 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.
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.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
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.

Limitations of SWOT Analysis for Tops Holding

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 Tops Holding
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 Tops Holding

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 Tops Holding 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 Tops Holding

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)