CompX International Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The CompX International Inc. is one of the leading firms in its industry. CompX International 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 enables the managers of the CompX International Inc. 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 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 CompX International Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to CompX International Inc. SWOT Analysis

Strengths of CompX International Inc. – Internal Strategic Factors

As one of the leading firms in its industry, CompX International Inc. 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 CompX International Inc. are –

Read - CompX International Inc. Porter 5 Forces Analysis & Industry Analysis
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• Strong distribution network – Over the years CompX International Inc. has built a reliable distribution network that can reach majority of its potential market.
• Highly skilled workforce through successful training and learning programs. CompX International 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.
• Strong Brand Portfolio – Over the years CompX International Inc. has invested in building a strong brand portfolio. The SWOT analysis of CompX International Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
• Automation of activities brought consistency of quality to CompX International Inc. 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 – CompX International Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Strong Free Cash Flow – CompX International Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.

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Weakness of CompX International Inc. – Internal Strategic Factors

Weakness are the areas where CompX International Inc. 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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• High attrition rate in work force – compare to other organizations in the industry CompX International Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Limited success outside core business – Even though CompX International Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• The profitability ratio and Net Contribution % of CompX International Inc. are below the industry average.
• 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 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.
• 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 CompX International Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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. CompX International Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for CompX International Inc. – External Strategic Factors

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• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of CompX International Inc..
• 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 CompX International 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.
• New trends in the consumer behavior can open up new market for the CompX International Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as CompX International Inc. 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 CompX International Inc. to capture new customers and increase its market share.
• 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.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided CompX International Inc. an opportunity to enter a new emerging market.
• The new technology provides an opportunity to CompX International 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.

Threats CompX International Inc. Facing - External Strategic Factors

• Rising raw material can pose a threat to the CompX International Inc. profitability.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• 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.
• 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.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for CompX International Inc.   in those markets.
• 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.

Limitations of SWOT Analysis for CompX International 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 CompX International 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 CompX International 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 CompX International 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 CompX International 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)