HopFed Bancorp, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The HopFed Bancorp, Inc. is one of the leading firms in its industry. HopFed Bancorp, Inc. 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 organization 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the HopFed Bancorp, 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 a firm can use to exploit external opportunities, counter threats, and build on & protect HopFed Bancorp, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to HopFed Bancorp, Inc. SWOT Analysis

Strengths of HopFed Bancorp, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, HopFed Bancorp, Inc. 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 HopFed Bancorp, Inc. are –

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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 distribution network – Over the years HopFed Bancorp, Inc. has built a reliable distribution network that can reach majority of its potential market.
• Strong Brand Portfolio – Over the years HopFed Bancorp, Inc. has invested in building a strong brand portfolio. The SWOT analysis of HopFed Bancorp, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Successful track record of developing new products – product innovation.
• Strong Free Cash Flow – HopFed Bancorp, Inc. 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. HopFed Bancorp, 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.
• 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.

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Weakness of HopFed Bancorp, Inc. – Internal Strategic Factors

Weakness are the areas where HopFed Bancorp, Inc. 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.

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• The profitability ratio and Net Contribution % of HopFed Bancorp, Inc. are below the industry average.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• High attrition rate in work force – compare to other organizations in the industry HopFed Bancorp, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• 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.
• Limited success outside core business – Even though HopFed Bancorp, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• 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.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, HopFed Bancorp, 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.

Opportunities for HopFed Bancorp, Inc. – 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 HopFed Bancorp, Inc. in other product categories.
• 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 HopFed Bancorp, 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.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of HopFed Bancorp, Inc..
• The market development will lead to dilution of competitor’s advantage and enable HopFed Bancorp, 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 HopFed Bancorp, Inc. an opportunity to enter a new emerging market.
• 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 HopFed Bancorp, Inc. to drive home its advantage in new technology and gain market share in the new product category.
• Government green drive also opens an opportunity for procurement of HopFed Bancorp, Inc. products by the state as well as federal government contractors.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for HopFed Bancorp, Inc. to capture new customers and increase its market share.

Threats HopFed Bancorp, Inc. Facing - External Strategic Factors

• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• 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.
• 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of HopFed Bancorp, Inc.

Limitations of SWOT Analysis for HopFed Bancorp, 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 HopFed Bancorp, 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 HopFed Bancorp, 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 HopFed Bancorp, 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 HopFed Bancorp, 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)