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Span-America Medical Systems, Inc. SWOT Analysis / Matrix
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SWOT analysis is a strategic planning tool that can be used by Span-America Medical Systems, Inc. managers to do a situational analysis of the firm . It is an important technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Span-America Medical Systems, Inc. is facing in its current business environment.
The Span-America Medical Systems, Inc. is one of the leading firms in its industry. Span-America Medical Systems, 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 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 enables the managers of the Span-America Medical Systems, 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 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 Span-America Medical Systems, Inc. strengths, and eradicate its weaknesses.
Step by Step Guide to Span-America Medical Systems, Inc. SWOT Analysis
Strengths of Span-America Medical Systems, Inc. – Internal Strategic Factors
As one of the leading companies in its industry, Span-America Medical Systems, 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 Span-America Medical Systems, Inc. are –
Read - Span-America Medical Systems, Inc. Porter 5 Forces Analysis & Industry Analysis
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- Automation of activities brought consistency of quality to Span-America Medical Systems, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
- Superb Performance in New Markets – Span-America Medical Systems, 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.
- Highly successful at Go To Market strategies for its products.
- Strong Free Cash Flow – Span-America Medical Systems, 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.
- Highly skilled workforce through successful training and learning programs. Span-America Medical Systems, 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.
- Strong Brand Portfolio – Over the years Span-America Medical Systems, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Span-America Medical Systems, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
- 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.
Weakness of Span-America Medical Systems, Inc. – Internal Strategic Factors
Weakness are the areas where Span-America Medical Systems, 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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- Not highly successful at integrating firms with different work culture. As mentioned earlier even though Span-America Medical Systems, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
- The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Span-America Medical Systems, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Span-America Medical Systems, 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.
- Investment in Research and Development is below the fastest growing players in the industry. Even though Span-America Medical Systems, 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 profitability ratio and Net Contribution % of Span-America Medical Systems, Inc. are below the industry average.
- Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
- 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 Span-America Medical Systems, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Opportunities for Span-America Medical Systems, 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 Span-America Medical Systems, Inc. to increase its profitability.
- 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 Span-America Medical Systems, 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 Span-America Medical Systems, Inc. in other product categories.
- Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Span-America Medical Systems, Inc. an opportunity to enter a new emerging market.
- The market development will lead to dilution of competitor’s advantage and enable Span-America Medical Systems, Inc. to increase its competitiveness compare to the other competitors.
- Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Span-America Medical Systems, 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 new technology provides an opportunity to Span-America Medical Systems, 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 Span-America Medical Systems, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Threats Span-America Medical Systems, 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.
- Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Span-America Medical Systems, 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.
- 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.
- New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
- Liability laws in different countries are different and Span-America Medical Systems, 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.
Limitations of SWOT Analysis for Span-America Medical Systems, 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 Span-America Medical Systems, 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 Span-America Medical Systems, 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 Span-America Medical Systems, 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 Span-America Medical Systems, 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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SWOT Worksheet & Template
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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)
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