Old Line Bancshares, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Old Line Bancshares, Inc. is one of the leading companies in its industry. Old Line Bancshares, Inc. maintains its prominent 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 company such as – marketing, finance, operations, management information systems and strategic planning.

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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 enables the managers of the Old Line Bancshares, Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

Old Line Bancshares, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Old Line Bancshares, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Old Line Bancshares, Inc. SWOT Analysis

Strengths of Old Line Bancshares, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, Old Line Bancshares, Inc. 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 Old Line Bancshares, Inc. are –

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Automation of activities brought consistency of quality to Old Line Bancshares, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
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.
Superb Performance in New Markets – Old Line Bancshares, Inc. 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 – Old Line Bancshares, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
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.
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.
Strong distribution network – Over the years Old Line Bancshares, Inc. has built a reliable distribution network that can reach majority of its potential market.
Strong Free Cash Flow – Old Line Bancshares, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Weakness of Old Line Bancshares, Inc. – Internal Strategic Factors

Weakness are the areas where Old Line Bancshares, Inc. 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.

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Limited success outside core business – Even though Old Line Bancshares, Inc. 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 Old Line Bancshares, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
High attrition rate in work force – compare to other organizations in the industry Old Line Bancshares, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Old Line Bancshares, Inc. 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.
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.
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 Old Line Bancshares, Inc.

Opportunities for Old Line Bancshares, Inc. – External Strategic Factors

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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 Old Line Bancshares, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Old Line Bancshares, Inc.’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.
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 Old Line Bancshares, Inc. to capture new customers and increase its market share.
Government green drive also opens an opportunity for procurement of Old Line Bancshares, Inc. 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 Old Line Bancshares, Inc. to drive home its advantage in new technology and gain market share in the new product category.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Old Line Bancshares, Inc. to increase its profitability.
New trends in the consumer behavior can open up new market for the Old Line Bancshares, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Old Line Bancshares, Inc. 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 pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Old Line Bancshares, Inc.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
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 Old Line Bancshares, Inc. in those markets.
Imitation of the counterfeit and low quality product is also a threat to Old Line Bancshares, Inc.’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Old Line Bancshares, Inc.

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 Old Line Bancshares, Inc.
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.

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Weighted SWOT Analysis of Old Line Bancshares, Inc.

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 Old Line Bancshares, Inc. 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 Old Line Bancshares, Inc.

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)