inVentiv Health SWOT Analysis / Matrix

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

The inVentiv Health is one of the leading companies in its industry. inVentiv Health 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 firm 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 inVentiv Health 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 central purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect inVentiv Health strengths, and eradicate its weaknesses.

Step by Step Guide to inVentiv Health SWOT Analysis

Strengths of inVentiv Health – Internal Strategic Factors

As one of the leading firms in its industry, inVentiv Health 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 inVentiv Health are –

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.
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 – inVentiv Health has strong free cash flows that provide resources in the hand of the company to expand into new projects.
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.
Good Returns on Capital Expenditure – inVentiv Health is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Successful track record of developing new products – product innovation.
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 inVentiv Health – Internal Strategic Factors

Weakness are the areas where inVentiv Health 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.

The profitability ratio and Net Contribution % of inVentiv Health are below the industry average.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though inVentiv Health is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, inVentiv Health 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.
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 inVentiv Health is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
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 inVentiv Health
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. inVentiv Health has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
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.

Opportunities for inVentiv Health – External Strategic Factors

The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as inVentiv Health to increase its profitability.
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 inVentiv Health to drive home its advantage in new technology and gain market share in the new product category.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided inVentiv Health an opportunity to enter a new emerging market.
Government green drive also opens an opportunity for procurement of inVentiv Health products by the state as well as federal government contractors.
The new technology provides an opportunity to inVentiv Health 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 inVentiv Health.
New trends in the consumer behavior can open up new market for the inVentiv Health . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for inVentiv Health to capture new customers and increase its market share.

Threats inVentiv Health Facing - External Strategic Factors

Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
Rising raw material can pose a threat to the inVentiv Health profitability.
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.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
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.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for inVentiv Health in those markets.

Limitations of SWOT Analysis for inVentiv Health

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 inVentiv Health
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 inVentiv Health

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 inVentiv Health 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 inVentiv Health

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)