TRI Pointe Group SWOT Analysis / Matrix

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

The TRI Pointe Group is one of the leading organizatations in its industry. TRI Pointe Group maintains its dominant 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 called SWOT Matrix.

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

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

SWOT Matrix Strategies Objective

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

Step by Step Guide to TRI Pointe Group SWOT Analysis

Strengths of TRI Pointe Group – Internal Strategic Factors

As one of the leading organizations in its industry, TRI Pointe Group 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 TRI Pointe Group are –

  • Strong distribution network – Over the years TRI Pointe Group has built a reliable distribution network that can reach majority of its potential market.
  • Strong Brand Portfolio – Over the years TRI Pointe Group has invested in building a strong brand portfolio. The SWOT analysis of TRI Pointe Group just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • 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.
  • 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.
  • Highly skilled workforce through successful training and learning programs. TRI Pointe Group 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.
  • Superb Performance in New Markets – TRI Pointe Group 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.

Weakness of TRI Pointe Group – Internal Strategic Factors

Weakness are the areas where TRI Pointe Group 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.

  • High attrition rate in work force – compare to other organizations in the industry TRI Pointe Group has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though TRI Pointe Group 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 TRI Pointe Group is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • 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 TRI Pointe Group is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • 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 marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for TRI Pointe Group – External Strategic Factors

  • 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 TRI Pointe Group in other product categories.
  • Government green drive also opens an opportunity for procurement of TRI Pointe Group products by the state as well as federal government contractors.
  • 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.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of TRI Pointe Group.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as TRI Pointe Group to increase its profitability.
  • The new technology provides an opportunity to TRI Pointe Group 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.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of TRI Pointe Group’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 TRI Pointe Group . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats TRI Pointe Group Facing - External Strategic Factors

  • Liability laws in different countries are different and TRI Pointe Group may be exposed to various liability claims given change in policies in those markets.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards 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.
  • 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.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of TRI Pointe Group
  • 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 .
  • 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.

Limitations of SWOT Analysis for TRI Pointe Group

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 TRI Pointe Group
  • 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 TRI Pointe Group

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 TRI Pointe Group 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 TRI Pointe Group

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)