Xerium Technologies, Inc. SWOT Analysis / Matrix

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

The Xerium Technologies, Inc. is one of the leading organizatations in its industry. Xerium Technologies, Inc. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly 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 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 Xerium Technologies, Inc. to develop four types of strategies:

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

Xerium Technologies, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Xerium Technologies, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Xerium Technologies, Inc. SWOT Analysis

Strengths of Xerium Technologies, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Xerium Technologies, 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 Xerium Technologies, Inc. are –

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Superb Performance in New Markets – Xerium Technologies, Inc. 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.
Successful track record of developing new products – product innovation.
Highly skilled workforce through successful training and learning programs. Xerium Technologies, 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.
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.
Strong Free Cash Flow – Xerium Technologies, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Strong Brand Portfolio – Over the years Xerium Technologies, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Xerium Technologies, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Highly successful at Go To Market strategies for its products.
Strong distribution network – Over the years Xerium Technologies, Inc. has built a reliable distribution network that can reach majority of its potential market.

Weakness of Xerium Technologies, Inc. – Internal Strategic Factors

Weakness are the areas where Xerium Technologies, 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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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.
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 Xerium Technologies, 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 Xerium Technologies, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
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.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Xerium Technologies, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
High attrition rate in work force – compare to other organizations in the industry Xerium Technologies, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for Xerium Technologies, Inc. – External Strategic Factors

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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 Xerium Technologies, Inc. to drive home its advantage in new technology and gain market share in the new product category.
New trends in the consumer behavior can open up new market for the Xerium Technologies, Inc. . 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 Xerium Technologies, Inc..
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Xerium Technologies, Inc. an opportunity to enter a new emerging market.
The new technology provides an opportunity to Xerium Technologies, 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.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Xerium Technologies, 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 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 Xerium Technologies, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
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 Xerium Technologies, Inc. in other product categories.

Threats Xerium Technologies, Inc. Facing - External Strategic Factors

Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Xerium Technologies, Inc.
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.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Imitation of the counterfeit and low quality product is also a threat to Xerium Technologies, Inc.’s product especially in the emerging markets and low income 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.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Xerium Technologies, Inc. in those markets.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for Xerium Technologies, 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 Xerium Technologies, 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 Xerium Technologies, 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 Xerium Technologies, 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 Xerium Technologies, 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)