Littelfuse, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Littelfuse, Inc. is one of the leading organizatations in its industry. Littelfuse, Inc. maintains its prominent 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.


Order Now - Littelfuse, Inc. SWOT Analysis
Check out- Littelfuse, Inc. PESTEL / PEST & Environment Analysis
Article continues after advertisement


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 helps the managers of the Littelfuse, 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 primary purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Littelfuse, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Littelfuse, Inc. SWOT Analysis

Strengths of Littelfuse, Inc. – Internal Strategic Factors

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

Read - Littelfuse, Inc. Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

• 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.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• 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 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.
• Successful track record of developing new products – product innovation.
• Highly successful at Go To Market strategies for its products.
• Strong Free Cash Flow – Littelfuse, Inc. 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 Littelfuse, Inc. has built a reliable distribution network that can reach majority of its potential market.

---

Weakness of Littelfuse, Inc. – Internal Strategic Factors

Weakness are the areas where Littelfuse, Inc. 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.

Article continues after advertisement

• Limited success outside core business – Even though Littelfuse, 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 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. Littelfuse, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• The profitability ratio and Net Contribution % of Littelfuse, Inc. 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 Littelfuse, Inc. 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.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Littelfuse, 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.
• 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.

Opportunities for Littelfuse, Inc. – External Strategic Factors

Article continues after advertisement

• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Littelfuse, Inc.’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 trends in the consumer behavior can open up new market for the Littelfuse, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Littelfuse, Inc. to capture new customers and increase its market share.
• 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 Littelfuse, Inc. 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 Littelfuse, Inc. an opportunity to enter a new emerging market.
• 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 Littelfuse, 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.
• 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.
• New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Littelfuse, Inc. to drive home its advantage in new technology and gain market share in the new product category.

Threats Littelfuse, Inc. Facing - External Strategic Factors

• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Littelfuse, Inc.   in those markets.
• Rising raw material can pose a threat to the Littelfuse, Inc. profitability.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Imitation of the counterfeit and low quality product is also a threat to Littelfuse, Inc.’s product especially in the emerging markets and low income markets.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Limitations of SWOT Analysis for Littelfuse, 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 Littelfuse, 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.

Article continues after advertisement

Weighted SWOT Analysis of Littelfuse, 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 Littelfuse, 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 Littelfuse, 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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Littelfuse, Inc.

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)