Ritter Pharmaceuticals, Inc. SWOT Analysis / Matrix

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

The Ritter Pharmaceuticals, Inc. is one of the leading companies in its industry. Ritter Pharmaceuticals, Inc. maintains its dominant 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Ritter Pharmaceuticals, Inc. to develop four types of strategies:

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

Ritter Pharmaceuticals, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Ritter Pharmaceuticals, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Ritter Pharmaceuticals, Inc. SWOT Analysis

Strengths of Ritter Pharmaceuticals, Inc. – Internal Strategic Factors

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

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Strong Brand Portfolio – Over the years Ritter Pharmaceuticals, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Ritter Pharmaceuticals, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Strong Free Cash Flow – Ritter Pharmaceuticals, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
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.
Successful track record of developing new products – product innovation.
Automation of activities brought consistency of quality to Ritter Pharmaceuticals, 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.
Strong distribution network – Over the years Ritter Pharmaceuticals, Inc. has built a reliable distribution network that can reach majority of its potential market.

Weakness of Ritter Pharmaceuticals, Inc. – Internal Strategic Factors

Weakness are the areas where Ritter Pharmaceuticals, 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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The profitability ratio and Net Contribution % of Ritter Pharmaceuticals, 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 Ritter Pharmaceuticals, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
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.
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 Ritter Pharmaceuticals, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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 Ritter Pharmaceuticals, Inc.

Opportunities for Ritter Pharmaceuticals, Inc. – External Strategic Factors

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Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Ritter Pharmaceuticals, Inc. to capture new customers and increase its market share.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Ritter Pharmaceuticals, 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.
The market development will lead to dilution of competitor’s advantage and enable Ritter Pharmaceuticals, Inc. to increase its competitiveness compare to the other competitors.
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 Ritter Pharmaceuticals, Inc. to drive home its advantage in new technology and gain market share in the new product category.
New trends in the consumer behavior can open up new market for the Ritter Pharmaceuticals, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
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 Ritter Pharmaceuticals, 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 Ritter Pharmaceuticals, Inc. in other product categories.
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.

Threats Ritter Pharmaceuticals, Inc. Facing - External Strategic Factors

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.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Ritter Pharmaceuticals, Inc.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for Ritter Pharmaceuticals, 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 Ritter Pharmaceuticals, 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 Ritter Pharmaceuticals, 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 Ritter Pharmaceuticals, 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 Ritter Pharmaceuticals, 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)