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TransEnterix, Inc. SWOT Analysis / Matrix
Business Essays, Term Papers & Research Papers
SWOT analysis is a strategic planning tool that can be used by TransEnterix, Inc. managers to do a situational analysis of the firm . It is a handy technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) TransEnterix, Inc. is facing in its current business environment.
The TransEnterix, Inc. is one of the leading companies in its industry. TransEnterix, Inc. maintains its prominent 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 organization 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 TransEnterix, 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 company can utilize to exploit external opportunities, counter threats, and build on & protect TransEnterix, Inc. strengths, and eradicate its weaknesses.
Step by Step Guide to TransEnterix, Inc. SWOT Analysis
Strengths of TransEnterix, Inc. – Internal Strategic Factors
As one of the leading firms in its industry, TransEnterix, 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 TransEnterix, Inc. are –
Read - TransEnterix, Inc. Porter 5 Forces Analysis & Industry Analysis
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- Highly skilled workforce through successful training and learning programs. TransEnterix, 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.
- Automation of activities brought consistency of quality to TransEnterix, 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.
- Successful track record of developing new products – product innovation.
- 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 – TransEnterix, 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.
- Good Returns on Capital Expenditure – TransEnterix, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Weakness of TransEnterix, Inc. – Internal Strategic Factors
Weakness are the areas where TransEnterix, 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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- 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.
- 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. TransEnterix, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
- 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.
- Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, TransEnterix, 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 TransEnterix, 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.
- Not highly successful at integrating firms with different work culture. As mentioned earlier even though TransEnterix, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
- Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
Opportunities for TransEnterix, 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 TransEnterix, Inc. to capture new customers and increase its market share.
- 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 TransEnterix, Inc. in other product categories.
- Decreasing cost of transportation because of lower shipping prices can also bring down the cost of TransEnterix, 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.
- New trends in the consumer behavior can open up new market for the TransEnterix, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
- 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.
- Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided TransEnterix, Inc. an opportunity to enter a new emerging market.
- Government green drive also opens an opportunity for procurement of TransEnterix, Inc. products by the state as well as federal government contractors.
- 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 TransEnterix, Inc. to drive home its advantage in new technology and gain market share in the new product category.
Threats TransEnterix, Inc. Facing - External Strategic Factors
- The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
- Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of TransEnterix, Inc.
- Rising raw material can pose a threat to the TransEnterix, Inc. profitability.
- Liability laws in different countries are different and TransEnterix, Inc. may be exposed to various liability claims given change in policies in those markets.
- New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
- 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.
- 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 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.
Limitations of SWOT Analysis for TransEnterix, 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 TransEnterix, 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 TransEnterix, 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 TransEnterix, 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 TransEnterix, 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
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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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