Tactile Systems Technology, Inc. SWOT Analysis / Matrix

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

The Tactile Systems Technology, Inc. is one of the leading organizatations in its industry. Tactile Systems Technology, 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 helps the managers of the Tactile Systems Technology, 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 use to exploit external opportunities, counter threats, and build on & protect Tactile Systems Technology, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Tactile Systems Technology, Inc. SWOT Analysis

Strengths of Tactile Systems Technology, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Tactile Systems Technology, 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 Tactile Systems Technology, Inc. are –

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• 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.
• Strong Brand Portfolio – Over the years Tactile Systems Technology, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Tactile Systems Technology, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Strong distribution network – Over the years Tactile Systems Technology, Inc. has built a reliable distribution network that can reach majority of its potential 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 Free Cash Flow – Tactile Systems Technology, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Automation of activities brought consistency of quality to Tactile Systems Technology, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• 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 Tactile Systems Technology, Inc. – Internal Strategic Factors

Weakness are the areas where Tactile Systems Technology, 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 Tactile Systems Technology, Inc. are below the industry average.
• 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 Tactile Systems Technology, Inc.
• 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 Tactile Systems Technology, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• High attrition rate in work force – compare to other organizations in the industry Tactile Systems Technology, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• 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.
• Limited success outside core business – Even though Tactile Systems Technology, 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 Tactile Systems Technology, Inc. – External Strategic Factors

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• 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 Tactile Systems Technology, Inc. in other product categories.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Tactile Systems Technology, Inc..
• The new technology provides an opportunity to Tactile Systems Technology, 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.
• 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.
• 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 Tactile Systems Technology, 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 Tactile Systems Technology, 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.
• Government green drive also opens an opportunity for procurement of Tactile Systems Technology, Inc. products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable Tactile Systems Technology, Inc. to increase its competitiveness compare to the other competitors.

Threats Tactile Systems Technology, Inc. Facing - External Strategic Factors

• Imitation of the counterfeit and low quality product is also a threat to Tactile Systems Technology, Inc.’s product especially in the emerging markets and low income markets.
• Rising raw material can pose a threat to the Tactile Systems Technology, Inc. profitability.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• 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.
• 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Tactile Systems Technology, Inc.   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.

Limitations of SWOT Analysis for Tactile Systems Technology, 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 Tactile Systems Technology, 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 Tactile Systems Technology, 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 Tactile Systems Technology, 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 Tactile Systems Technology, 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)