Hexcel Corporation SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Hexcel Corporation is one of the leading firms in its industry. Hexcel 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 company such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework facilitates 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 Hexcel 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 primary purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Hexcel Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to Hexcel Corporation SWOT Analysis

Strengths of Hexcel Corporation – Internal Strategic Factors

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

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• Highly successful at Go To Market strategies for its products.
• Strong distribution network – Over the years Hexcel Corporation has built a reliable distribution network that can reach majority of its potential market.
• Highly skilled workforce through successful training and learning programs. Hexcel 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.
• Strong Brand Portfolio – Over the years Hexcel Corporation has invested in building a strong brand portfolio. The SWOT analysis of Hexcel Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Automation of activities brought consistency of quality to Hexcel Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Good Returns on Capital Expenditure – Hexcel Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Superb Performance in New Markets – Hexcel 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 Hexcel Corporation – Internal Strategic Factors

Weakness are the areas where Hexcel Corporation 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 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.
• High attrition rate in work force – compare to other organizations in the industry Hexcel Corporation has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Hexcel 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.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Hexcel 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.
• Limited success outside core business – Even though Hexcel Corporation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• 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 Hexcel Corporation

Opportunities for Hexcel Corporation – External Strategic Factors

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• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Hexcel Corporation an opportunity to enter a new emerging market.
• Government green drive also opens an opportunity for procurement of Hexcel Corporation products by the state as well as federal government contractors.
• The new technology provides an opportunity to Hexcel Corporation 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.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Hexcel Corporation to capture new customers and increase its market share.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Hexcel Corporation.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Hexcel 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.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Hexcel Corporation to increase its profitability.
• 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 Hexcel Corporation in other product categories.

Threats Hexcel Corporation Facing - External Strategic Factors

• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• 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.
• 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.
• Liability laws in different countries are different and Hexcel Corporation may be exposed to various liability claims given change in policies 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.
• Rising raw material can pose a threat to the Hexcel Corporation profitability.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Hexcel Corporation   in those markets.
• Imitation of the counterfeit and low quality product is also a threat to Hexcel Corporation’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Hexcel 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 Hexcel 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 Hexcel 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 Hexcel 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 Hexcel 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)