The Gorman-Rupp Company SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by The Gorman-Rupp Company managers to do a situational analysis of the company . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) The Gorman-Rupp Company is facing in its current business environment.

The The Gorman-Rupp Company is one of the leading organizatations in its industry. The Gorman-Rupp Company 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 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 enables the managers of the The Gorman-Rupp Company to develop four types of strategies:

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

The Gorman-Rupp Company swot analysis / matrix

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect The Gorman-Rupp Company strengths, and eradicate its weaknesses.

Step by Step Guide to The Gorman-Rupp Company SWOT Analysis

Strengths of The Gorman-Rupp Company – Internal Strategic Factors

As one of the leading organizations in its industry, The Gorman-Rupp Company 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 The Gorman-Rupp Company are –

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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. The Gorman-Rupp Company 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 The Gorman-Rupp Company products and has enabled the company to scale up and scale down based on the demand conditions in the market.
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.
Highly successful at Go To Market strategies for its products.
Strong Brand Portfolio – Over the years The Gorman-Rupp Company has invested in building a strong brand portfolio. The SWOT analysis of The Gorman-Rupp Company just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Strong Free Cash Flow – The Gorman-Rupp Company has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Superb Performance in New Markets – The Gorman-Rupp Company 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.

Weakness of The Gorman-Rupp Company – Internal Strategic Factors

Weakness are the areas where The Gorman-Rupp Company 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 The Gorman-Rupp Company is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
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.
The profitability ratio and Net Contribution % of The Gorman-Rupp Company are below the industry average.
Limited success outside core business – Even though The Gorman-Rupp Company is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
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 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.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for The Gorman-Rupp Company – 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 The Gorman-Rupp Company in other product categories.
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 The Gorman-Rupp Company. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as The Gorman-Rupp Company to increase its profitability.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of The Gorman-Rupp Company’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 The Gorman-Rupp Company . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of The Gorman-Rupp Company.
The new technology provides an opportunity to The Gorman-Rupp Company 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.
Government green drive also opens an opportunity for procurement of The Gorman-Rupp Company products by the state as well as federal government contractors.

Threats The Gorman-Rupp Company Facing - External Strategic Factors

Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of The Gorman-Rupp Company
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
Rising raw material can pose a threat to the The Gorman-Rupp Company profitability.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
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 The Gorman-Rupp Company in those markets.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Limitations of SWOT Analysis for The Gorman-Rupp Company

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 The Gorman-Rupp Company
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 The Gorman-Rupp Company

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 The Gorman-Rupp Company 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 The Gorman-Rupp Company

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)