Old Point Financial Corporation SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Old Point Financial Corporation is one of the leading companies in its industry. Old Point Financial Corporation 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 company such as – marketing, finance, operations, management information systems and strategic planning.

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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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Old Point Financial Corporation to develop four types of strategies:

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

Old Point Financial Corporation swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Old Point Financial Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to Old Point Financial Corporation SWOT Analysis

Strengths of Old Point Financial Corporation – Internal Strategic Factors

As one of the leading companies in its industry, Old Point Financial Corporation 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 Point Financial Corporation are –

Read - Old Point Financial Corporation Porter 5 Forces Analysis & Industry Analysis
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Strong Brand Portfolio – Over the years Old Point Financial Corporation has invested in building a strong brand portfolio. The SWOT analysis of Old Point Financial Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Strong distribution network – Over the years Old Point Financial Corporation has built a reliable distribution network that can reach majority of its potential market.
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 successful at Go To Market strategies for its products.
Strong Free Cash Flow – Old Point Financial Corporation has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Highly skilled workforce through successful training and learning programs. Old Point Financial Corporation 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.

Weakness of Old Point Financial Corporation – Internal Strategic Factors

Weakness are the areas where Old Point Financial Corporation can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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High attrition rate in work force – compare to other organizations in the industry Old Point Financial Corporation 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 Old Point Financial Corporation 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.
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 Point Financial Corporation 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 Old Point Financial Corporation
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, Old Point Financial Corporation 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.
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 Old Point Financial Corporation – External Strategic Factors

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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 Old Point Financial Corporation in other product categories.
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 Point Financial Corporation to drive home its advantage in new technology and gain market share in the new product category.
The new technology provides an opportunity to Old Point Financial Corporation 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 Old Point Financial Corporation to increase its competitiveness compare to the other competitors.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Old Point Financial Corporation an opportunity to enter a new emerging market.
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 Old Point Financial Corporation.
New trends in the consumer behavior can open up new market for the Old Point Financial Corporation . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Old Point Financial Corporation Facing - External Strategic Factors

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.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Rising raw material can pose a threat to the Old Point Financial Corporation profitability.
Liability laws in different countries are different and Old Point Financial Corporation may be exposed to various liability claims given change in policies in those markets.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Old Point Financial Corporation 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.

Limitations of SWOT Analysis for Old Point Financial Corporation

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 Point Financial Corporation
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 Point Financial Corporation

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 Point Financial Corporation 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 Point Financial Corporation

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)