Insignia Systems, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Insignia Systems, Inc. is one of the leading firms in its industry. Insignia Systems, Inc. maintains its prominent position in market by critically 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 Insignia Systems, Inc. to develop four types of strategies:

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

Insignia Systems, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Insignia Systems, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Insignia Systems, Inc. SWOT Analysis

Strengths of Insignia Systems, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Insignia Systems, 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 Insignia Systems, Inc. are –

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Highly successful at Go To Market strategies for its products.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Good Returns on Capital Expenditure – Insignia Systems, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Strong Free Cash Flow – Insignia Systems, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Automation of activities brought consistency of quality to Insignia Systems, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Strong distribution network – Over the years Insignia Systems, Inc. has built a reliable distribution network that can reach majority of its potential market.
Successful track record of developing new products – product innovation.
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.

Weakness of Insignia Systems, Inc. – Internal Strategic Factors

Weakness are the areas where Insignia Systems, 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 Insignia Systems, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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. Insignia Systems, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Investment in Research and Development is below the fastest growing players in the industry. Even though Insignia Systems, Inc. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Insignia Systems, Inc. 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.
Limited success outside core business – Even though Insignia Systems, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
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.

Opportunities for Insignia Systems, Inc. – External Strategic Factors

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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 Insignia Systems, Inc. in other product categories.
The new technology provides an opportunity to Insignia Systems, 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.
The market development will lead to dilution of competitor’s advantage and enable Insignia Systems, Inc. to increase its competitiveness compare to the other competitors.
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 Insignia Systems, 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.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Insignia Systems, Inc. to increase its profitability.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Insignia Systems, Inc..
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Insignia Systems, Inc. an opportunity to enter a new emerging market.

Threats Insignia Systems, Inc. Facing - External Strategic Factors

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.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
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 Insignia Systems, Inc. in those markets.
Imitation of the counterfeit and low quality product is also a threat to Insignia Systems, Inc.’s product especially in the emerging markets and low income markets.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Insignia Systems, Inc.

Limitations of SWOT Analysis for Insignia Systems, 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 Insignia Systems, 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 Insignia Systems, 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 Insignia Systems, 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 Insignia Systems, 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)