Natural Alternatives International, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Natural Alternatives International, Inc. is one of the leading organizatations in its industry. Natural Alternatives International, 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Natural Alternatives International, 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 primary purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Natural Alternatives International, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Natural Alternatives International, Inc. SWOT Analysis

Strengths of Natural Alternatives International, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, Natural Alternatives International, 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 Natural Alternatives International, Inc. are –

Read - Natural Alternatives International, Inc. Porter 5 Forces Analysis & Industry Analysis
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• Superb Performance in New Markets – Natural Alternatives International, 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.
• Highly successful at Go To Market strategies for its products.
• Automation of activities brought consistency of quality to Natural Alternatives International, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• 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.
• Strong distribution network – Over the years Natural Alternatives International, Inc. has built a reliable distribution network that can reach majority of its potential market.
• Strong Free Cash Flow – Natural Alternatives International, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

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Weakness of Natural Alternatives International, Inc. – Internal Strategic Factors

Weakness are the areas where Natural Alternatives International, 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 Natural Alternatives International, Inc. are below the industry average.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Natural Alternatives International, 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.
• 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 Natural Alternatives International, Inc.
• High attrition rate in work force – compare to other organizations in the industry Natural Alternatives International, 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 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 Natural Alternatives International, 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 Natural Alternatives International, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Natural Alternatives International, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Natural Alternatives International, 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 Natural Alternatives International, Inc. to increase its profitability.
• The new technology provides an opportunity to Natural Alternatives International, 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 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 Natural Alternatives International, 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 Natural Alternatives International, Inc..
• 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 Natural Alternatives International, Inc. in other product categories.
• New trends in the consumer behavior can open up new market for the Natural Alternatives International, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Natural Alternatives International, 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 Natural Alternatives International, Inc. to drive home its advantage in new technology and gain market share in the new product category.

Threats Natural Alternatives International, Inc. Facing - External Strategic Factors

• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Natural Alternatives International, Inc.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Natural Alternatives International, Inc.   in those markets.
• Liability laws in different countries are different and Natural Alternatives International, Inc. may be exposed to various liability claims given change in policies in those 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.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for Natural Alternatives International, 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 Natural Alternatives International, 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 Natural Alternatives International, 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 Natural Alternatives International, 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 Natural Alternatives International, 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)