ABM Industries Incorporated SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by ABM Industries Incorporated managers to do a situational analysis of the organization . It is a handy technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) ABM Industries Incorporated is facing in its current business environment.

The ABM Industries Incorporated is one of the leading companies in its industry. ABM Industries Incorporated maintains its prominent 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the ABM Industries Incorporated to develop four types of strategies:

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

ABM Industries Incorporated swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect ABM Industries Incorporated strengths, and eradicate its weaknesses.

Step by Step Guide to ABM Industries Incorporated SWOT Analysis

Strengths of ABM Industries Incorporated – Internal Strategic Factors

As one of the leading firms in its industry, ABM Industries Incorporated 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 ABM Industries Incorporated are –

Read - ABM Industries Incorporated Porter 5 Forces Analysis & Industry Analysis
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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.
Good Returns on Capital Expenditure – ABM Industries Incorporated is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Highly skilled workforce through successful training and learning programs. ABM Industries Incorporated 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.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Strong Brand Portfolio – Over the years ABM Industries Incorporated has invested in building a strong brand portfolio. The SWOT analysis of ABM Industries Incorporated 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 – ABM Industries Incorporated has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Strong distribution network – Over the years ABM Industries Incorporated has built a reliable distribution network that can reach majority of its potential market.

Weakness of ABM Industries Incorporated – Internal Strategic Factors

Weakness are the areas where ABM Industries Incorporated 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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The profitability ratio and Net Contribution % of ABM Industries Incorporated are below the industry average.
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 ABM Industries Incorporated 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.
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. ABM Industries Incorporated has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Limited success outside core business – Even though ABM Industries Incorporated 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 ABM Industries Incorporated
Not highly successful at integrating firms with different work culture. As mentioned earlier even though ABM Industries Incorporated is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for ABM Industries Incorporated – External Strategic Factors

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The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as ABM Industries Incorporated to increase its profitability.
The market development will lead to dilution of competitor’s advantage and enable ABM Industries Incorporated to increase its competitiveness compare to the other competitors.
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 ABM Industries Incorporated 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 ABM Industries Incorporated. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided ABM Industries Incorporated an opportunity to enter a new emerging market.
Government green drive also opens an opportunity for procurement of ABM Industries Incorporated products by the state as well as federal government contractors.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of ABM Industries Incorporated.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for ABM Industries Incorporated to capture new customers and increase its market share.

Threats ABM Industries Incorporated Facing - External Strategic Factors

New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
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.
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.
Rising raw material can pose a threat to the ABM Industries Incorporated profitability.
Liability laws in different countries are different and ABM Industries Incorporated may be exposed to various liability claims given change in policies in those markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for ABM Industries Incorporated in those markets.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for ABM Industries Incorporated

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 ABM Industries Incorporated
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 ABM Industries Incorporated

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 ABM Industries Incorporated 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 ABM Industries Incorporated

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

You can email us to get an example document of Weighted SWOT analysis.

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)