Cempra, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Cempra, Inc. is one of the leading companies in its industry. Cempra, 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Cempra, 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 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 Cempra, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Cempra, Inc. SWOT Analysis

Strengths of Cempra, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Cempra, 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 Cempra, Inc. are –

Read - Cempra, Inc. 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 Brand Portfolio – Over the years Cempra, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Cempra, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Superb Performance in New Markets – Cempra, 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.
• Automation of activities brought consistency of quality to Cempra, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Highly successful at Go To Market strategies for its products.
• Good Returns on Capital Expenditure – Cempra, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Successful track record of developing new products – product innovation.
• Highly skilled workforce through successful training and learning programs. Cempra, 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.

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Weakness of Cempra, Inc. – Internal Strategic Factors

Weakness are the areas where Cempra, Inc. 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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• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Cempra, 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.
• 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.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Cempra, 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 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 highly successful at integrating firms with different work culture. As mentioned earlier even though Cempra, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Limited success outside core business – Even though Cempra, 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 Cempra, Inc. – 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 Cempra, 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.
• 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 Cempra, Inc. in other product categories.
• Government green drive also opens an opportunity for procurement of Cempra, Inc. products by the state as well as federal government contractors.
• 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.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Cempra, Inc. an opportunity to enter a new emerging market.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Cempra, Inc. to capture new customers and increase its market share.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Cempra, Inc..
• The new technology provides an opportunity to Cempra, 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.

Threats Cempra, Inc. Facing - External Strategic Factors

• 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 Cempra, Inc.’s product especially in the emerging markets and low income markets.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Cempra, Inc.   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.
• 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.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• 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.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Limitations of SWOT Analysis for Cempra, 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 Cempra, 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 Cempra, 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 Cempra, 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 Cempra, 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)