IDEXX Laboratories, Inc. SWOT Analysis / Matrix

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

The IDEXX Laboratories, Inc. is one of the leading companies in its industry. IDEXX Laboratories, Inc. maintains its prominent 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 firm 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 IDEXX Laboratories, Inc. to develop four types of strategies:

SO (strengths-opportunities) Strategies
WO (weaknesses-opportunities) Strategies
ST (strengths-threats) Strategies
WT (weaknesses-threats) Strategies

IDEXX Laboratories, Inc. swot analysis / matrix

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 IDEXX Laboratories, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to IDEXX Laboratories, Inc. SWOT Analysis

Strengths of IDEXX Laboratories, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, IDEXX Laboratories, 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 IDEXX Laboratories, Inc. are –

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Highly successful at Go To Market strategies for its products.
Good Returns on Capital Expenditure – IDEXX Laboratories, 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. IDEXX Laboratories, 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.
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.
Successful track record of developing new products – product innovation.
Strong Free Cash Flow – IDEXX Laboratories, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Strong distribution network – Over the years IDEXX Laboratories, Inc. has built a reliable distribution network that can reach majority of its potential market.
Automation of activities brought consistency of quality to IDEXX Laboratories, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Weakness of IDEXX Laboratories, Inc. – Internal Strategic Factors

Weakness are the areas where IDEXX Laboratories, 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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Limited success outside core business – Even though IDEXX Laboratories, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
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 IDEXX Laboratories, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though IDEXX Laboratories, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
The profitability ratio and Net Contribution % of IDEXX Laboratories, Inc. are below the industry average.
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 IDEXX Laboratories, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for IDEXX Laboratories, 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 IDEXX Laboratories, Inc. to increase its profitability.
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 IDEXX Laboratories, Inc. to drive home its advantage in new technology and gain market share in the new product category.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of IDEXX Laboratories, 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.
New trends in the consumer behavior can open up new market for the IDEXX Laboratories, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Government green drive also opens an opportunity for procurement of IDEXX Laboratories, 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 IDEXX Laboratories, Inc. an opportunity to enter a new emerging market.
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 IDEXX Laboratories, 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.

Threats IDEXX Laboratories, Inc. Facing - External Strategic Factors

Liability laws in different countries are different and IDEXX Laboratories, Inc. may be exposed to various liability claims given change in policies in those markets.
Imitation of the counterfeit and low quality product is also a threat to IDEXX Laboratories, Inc.’s product especially in the emerging markets and low income markets.
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.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of IDEXX Laboratories, Inc.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for IDEXX Laboratories, Inc. in those markets.
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.
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 IDEXX Laboratories, 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 IDEXX Laboratories, 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 IDEXX Laboratories, 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 IDEXX Laboratories, 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 IDEXX Laboratories, 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)