TearLab Corporation SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by TearLab Corporation managers to do a situational analysis of the organization . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) TearLab Corporation is facing in its current business environment.

The TearLab Corporation is one of the leading companies in its industry. TearLab Corporation maintains its dominant position in market by carefully 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 called SWOT Matrix.

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

Step by Step Guide to TearLab Corporation SWOT Analysis

Strengths of TearLab Corporation – Internal Strategic Factors

As one of the leading firms in its industry, TearLab Corporation 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 TearLab Corporation are –

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• Highly skilled workforce through successful training and learning programs. TearLab Corporation 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.
• 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.
• Successful track record of developing new products – product innovation.
• Strong Free Cash Flow – TearLab Corporation has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• 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.
• Automation of activities brought consistency of quality to TearLab Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Strong distribution network – Over the years TearLab Corporation has built a reliable distribution network that can reach majority of its potential market.
• Superb Performance in New Markets – TearLab Corporation 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.

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Weakness of TearLab Corporation – Internal Strategic Factors

Weakness are the areas where TearLab Corporation 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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• Investment in Research and Development is below the fastest growing players in the industry. Even though TearLab Corporation 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.
• Limited success outside core business – Even though TearLab Corporation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present 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. TearLab Corporation has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, TearLab Corporation 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.
• 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 TearLab Corporation
• 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 TearLab Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for TearLab Corporation – External Strategic Factors

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• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of TearLab Corporation.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided TearLab Corporation an opportunity to enter a new emerging market.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as TearLab Corporation 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 TearLab Corporation to drive home its advantage in new technology and gain market share in the new product category.
• 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 TearLab Corporation 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.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of TearLab Corporation’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.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for TearLab Corporation to capture new customers and increase its market share.

Threats TearLab Corporation Facing - External Strategic Factors

• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for TearLab Corporation   in those markets.
• Rising raw material can pose a threat to the TearLab Corporation profitability.
• 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.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Liability laws in different countries are different and TearLab Corporation may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for TearLab Corporation

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 TearLab Corporation
• 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 TearLab Corporation

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 TearLab Corporation 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 TearLab Corporation

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)