GATX Corporation SWOT Analysis / Matrix

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

The GATX Corporation is one of the leading companies in its industry. GATX Corporation maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly 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 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 GATX 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 main purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect GATX Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to GATX Corporation SWOT Analysis

Strengths of GATX Corporation – Internal Strategic Factors

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

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

Weakness of GATX Corporation – Internal Strategic Factors

Weakness are the areas where GATX Corporation can improve upon. Strategy is about making choices and weakness are the areas where an organization 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.
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.
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.
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 GATX Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
High attrition rate in work force – compare to other organizations in the industry GATX Corporation has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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 GATX Corporation

Opportunities for GATX Corporation – External Strategic Factors

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New trends in the consumer behavior can open up new market for the GATX Corporation . 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 GATX Corporation to increase its profitability.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided GATX Corporation an opportunity to enter a new emerging market.
Government green drive also opens an opportunity for procurement of GATX Corporation 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 GATX Corporation.
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 GATX Corporation in other product categories.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of GATX 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.
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 GATX Corporation. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats GATX Corporation 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 GATX Corporation profitability.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
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.
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.
Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for GATX Corporation 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 GATX 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 GATX 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 GATX 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 GATX 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 GATX 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

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)