Legacy Reserves LP SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Legacy Reserves LP managers to do a situational analysis of the organization . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Legacy Reserves LP is facing in its current business environment.

The Legacy Reserves LP is one of the leading organizatations in its industry. Legacy Reserves LP 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 company 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 Legacy Reserves LP to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Legacy Reserves LP swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect Legacy Reserves LP strengths, and eradicate its weaknesses.

Step by Step Guide to Legacy Reserves LP SWOT Analysis

Strengths of Legacy Reserves LP – Internal Strategic Factors

As one of the leading organizations in its industry, Legacy Reserves LP 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 Legacy Reserves LP are –

Read - Legacy Reserves LP Porter 5 Forces Analysis & Industry Analysis
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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.
  • Superb Performance in New Markets – Legacy Reserves LP 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.
  • Automation of activities brought consistency of quality to Legacy Reserves LP 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.
  • Strong Brand Portfolio – Over the years Legacy Reserves LP has invested in building a strong brand portfolio. The SWOT analysis of Legacy Reserves LP 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.
  • 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.
  • Good Returns on Capital Expenditure – Legacy Reserves LP is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weakness of Legacy Reserves LP – Internal Strategic Factors

Weakness are the areas where Legacy Reserves LP 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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  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Legacy Reserves LP is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • Limited success outside core business – Even though Legacy Reserves LP 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 Legacy Reserves LP
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Legacy Reserves LP 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.
  • 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 Legacy Reserves LP is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • 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. Legacy Reserves LP has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for Legacy Reserves LP – External Strategic Factors

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  • New trends in the consumer behavior can open up new market for the Legacy Reserves LP . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • The market development will lead to dilution of competitor’s advantage and enable Legacy Reserves LP to increase its competitiveness compare to the other competitors.
  • 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.
  • 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 Legacy Reserves LP in other product categories.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Legacy Reserves LP an opportunity to enter a new emerging market.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Legacy Reserves LP to increase its profitability.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Legacy Reserves LP 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 Legacy Reserves LP.

Threats Legacy Reserves LP 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 raw material can pose a threat to the Legacy Reserves LP profitability.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • 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.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Legacy Reserves LP   in those markets.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Legacy Reserves LP

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 Legacy Reserves LP
  • 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 Legacy Reserves LP

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 Legacy Reserves LP 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 Legacy Reserves LP

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)