American Renal Associates Holdings, Inc. SWOT Analysis / Matrix

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

The American Renal Associates Holdings, Inc. is one of the leading organizatations in its industry. American Renal Associates Holdings, 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 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 American Renal Associates Holdings, 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 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 American Renal Associates Holdings, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to American Renal Associates Holdings, Inc. SWOT Analysis

Strengths of American Renal Associates Holdings, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, American Renal Associates Holdings, 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 American Renal Associates Holdings, Inc. are –

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• Strong Free Cash Flow – American Renal Associates Holdings, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• 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.
• Good Returns on Capital Expenditure – American Renal Associates Holdings, Inc. 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. American Renal Associates Holdings, 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.
• Successful track record of developing new products – product innovation.
• Superb Performance in New Markets – American Renal Associates Holdings, 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 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.
• Strong distribution network – Over the years American Renal Associates Holdings, Inc. has built a reliable distribution network that can reach majority of its potential market.

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Weakness of American Renal Associates Holdings, Inc. – Internal Strategic Factors

Weakness are the areas where American Renal Associates Holdings, 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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• 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.
• 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 American Renal Associates Holdings, Inc.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• The profitability ratio and Net Contribution % of American Renal Associates Holdings, Inc. are below the industry average.
• 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.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, American Renal Associates Holdings, 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.
• Limited success outside core business – Even though American Renal Associates Holdings, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for American Renal Associates Holdings, Inc. – External Strategic Factors

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• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as American Renal Associates Holdings, Inc. to increase its profitability.
• The new technology provides an opportunity to American Renal Associates Holdings, 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.
• New trends in the consumer behavior can open up new market for the American Renal Associates Holdings, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• The market development will lead to dilution of competitor’s advantage and enable American Renal Associates Holdings, Inc. to increase its competitiveness compare to the other competitors.
• 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 American Renal Associates Holdings, Inc. in other product categories.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of American Renal Associates Holdings, Inc..
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided American Renal Associates Holdings, 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 American Renal Associates Holdings, Inc. to drive home its advantage in new technology and gain market share in the new product category.

Threats American Renal Associates Holdings, Inc. Facing - External Strategic Factors

• 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.
• 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.
• 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.
• Liability laws in different countries are different and American Renal Associates Holdings, Inc. may be exposed to various liability claims given change in policies in those markets.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for American Renal Associates Holdings, Inc.   in those markets.
• 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 American Renal Associates Holdings, 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 American Renal Associates Holdings, 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 American Renal Associates Holdings, 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 American Renal Associates Holdings, 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 American Renal Associates Holdings, 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)