First Interstate BancSystem, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The First Interstate BancSystem, Inc. is one of the leading firms in its industry. First Interstate BancSystem, Inc. maintains its dominant position in market by carefully 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 enables 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 First Interstate BancSystem, Inc. 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 an organization can use to exploit external opportunities, counter threats, and build on & protect First Interstate BancSystem, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to First Interstate BancSystem, Inc. SWOT Analysis

Strengths of First Interstate BancSystem, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, First Interstate BancSystem, 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 First Interstate BancSystem, Inc. are –

Read - First Interstate BancSystem, Inc. Porter 5 Forces Analysis & Industry Analysis
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• Highly skilled workforce through successful training and learning programs. First Interstate BancSystem, Inc. 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.
• Strong Free Cash Flow – First Interstate BancSystem, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Highly successful at Go To Market strategies for its products.
• Good Returns on Capital Expenditure – First Interstate BancSystem, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong distribution network – Over the years First Interstate BancSystem, Inc. has built a reliable distribution network that can reach majority of its potential market.
• Automation of activities brought consistency of quality to First Interstate BancSystem, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Superb Performance in New Markets – First Interstate BancSystem, 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.
• Strong Brand Portfolio – Over the years First Interstate BancSystem, Inc. has invested in building a strong brand portfolio. The SWOT analysis of First Interstate BancSystem, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

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Weakness of First Interstate BancSystem, Inc. – Internal Strategic Factors

Weakness are the areas where First Interstate BancSystem, 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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• Investment in Research and Development is below the fastest growing players in the industry. Even though First Interstate BancSystem, Inc. 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.
• 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. First Interstate BancSystem, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• 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 First Interstate BancSystem, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Limited success outside core business – Even though First Interstate BancSystem, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• 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 First Interstate BancSystem, Inc.
• 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.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for First Interstate BancSystem, Inc. – External Strategic Factors

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• New trends in the consumer behavior can open up new market for the First Interstate BancSystem, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• 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.
• 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 First Interstate BancSystem, Inc. in other product categories.
• The market development will lead to dilution of competitor’s advantage and enable First Interstate BancSystem, Inc. 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 First Interstate BancSystem, Inc. an opportunity to enter a new emerging market.
• The new technology provides an opportunity to First Interstate BancSystem, Inc. 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 First Interstate BancSystem, 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.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for First Interstate BancSystem, Inc. to capture new customers and increase its market share.

Threats First Interstate BancSystem, 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 raw material can pose a threat to the First Interstate BancSystem, Inc. profitability.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of First Interstate BancSystem, Inc.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Imitation of the counterfeit and low quality product is also a threat to First Interstate BancSystem, Inc.’s product especially in the emerging markets and low income markets.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• 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.

Limitations of SWOT Analysis for First Interstate BancSystem, 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 First Interstate BancSystem, 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 First Interstate BancSystem, 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 First Interstate BancSystem, 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 First Interstate BancSystem, 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)