Northeast Bancorp SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Northeast Bancorp is one of the leading companies in its industry. Northeast Bancorp 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 organization 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 enables the managers of the Northeast Bancorp 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 core purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Northeast Bancorp strengths, and eradicate its weaknesses.

Step by Step Guide to Northeast Bancorp SWOT Analysis

Strengths of Northeast Bancorp – Internal Strategic Factors

As one of the leading organizations in its industry, Northeast Bancorp 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 Northeast Bancorp are –

Read - Northeast Bancorp Porter 5 Forces Analysis & Industry Analysis
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• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• 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.
• Highly successful at Go To Market strategies for its products.
• Good Returns on Capital Expenditure – Northeast Bancorp 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. Northeast Bancorp 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 – Northeast Bancorp 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 distribution network – Over the years Northeast Bancorp has built a reliable distribution network that can reach majority of its potential market.
• Successful track record of developing new products – product innovation.

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Weakness of Northeast Bancorp – Internal Strategic Factors

Weakness are the areas where Northeast Bancorp 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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• 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. Northeast Bancorp has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• 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.
• 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 Northeast Bancorp is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Northeast Bancorp is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• 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.
• High attrition rate in work force – compare to other organizations in the industry Northeast Bancorp 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.

Opportunities for Northeast Bancorp – 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 Northeast Bancorp. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Northeast Bancorp.
• 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 Northeast Bancorp 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 Northeast Bancorp an opportunity to enter a new emerging market.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Northeast Bancorp to increase its profitability.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Northeast Bancorp’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.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Northeast Bancorp to capture new customers and increase its market share.
• 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 Northeast Bancorp in other product categories.

Threats Northeast Bancorp Facing - External Strategic Factors

• 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.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• 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.
• Rising raw material can pose a threat to the Northeast Bancorp profitability.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Northeast Bancorp

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 Northeast Bancorp
• 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 Northeast Bancorp

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 Northeast Bancorp 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 Northeast Bancorp

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

You can email us to get an example document of Weighted SWOT analysis.

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)