MSC Industrial Direct Co., Inc. SWOT Analysis / Matrix

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

The MSC Industrial Direct Co., Inc. is one of the leading firms in its industry. MSC Industrial Direct Co., 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 firm 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the MSC Industrial Direct Co., 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 utilize to exploit external opportunities, counter threats, and build on & protect MSC Industrial Direct Co., Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to MSC Industrial Direct Co., Inc. SWOT Analysis

Strengths of MSC Industrial Direct Co., Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, MSC Industrial Direct Co., 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 MSC Industrial Direct Co., Inc. are –

Read - MSC Industrial Direct Co., Inc. 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.
• Strong Free Cash Flow – MSC Industrial Direct Co., Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Highly skilled workforce through successful training and learning programs. MSC Industrial Direct Co., 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.
• Good Returns on Capital Expenditure – MSC Industrial Direct Co., Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.

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Weakness of MSC Industrial Direct Co., Inc. – Internal Strategic Factors

Weakness are the areas where MSC Industrial Direct Co., 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.

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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.
• 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. MSC Industrial Direct Co., Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though MSC Industrial Direct Co., Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Investment in Research and Development is below the fastest growing players in the industry. Even though MSC Industrial Direct Co., 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, MSC Industrial Direct Co., 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.
• High attrition rate in work force – compare to other organizations in the industry MSC Industrial Direct Co., Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• 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 MSC Industrial Direct Co., 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 MSC Industrial Direct Co., Inc..
• 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 MSC Industrial Direct Co., Inc. in other product categories.
• New trends in the consumer behavior can open up new market for the MSC Industrial Direct Co., 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 MSC Industrial Direct Co., Inc. to increase its profitability.
• 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.
• Government green drive also opens an opportunity for procurement of MSC Industrial Direct Co., Inc. products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable MSC Industrial Direct Co., Inc. to increase its competitiveness compare to the other competitors.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided MSC Industrial Direct Co., Inc. an opportunity to enter a new emerging market.

Threats MSC Industrial Direct Co., Inc. Facing - External Strategic Factors

• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• 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.
• Imitation of the counterfeit and low quality product is also a threat to MSC Industrial Direct Co., Inc.’s product especially in the emerging markets and low income markets.
• Rising raw material can pose a threat to the MSC Industrial Direct Co., Inc. profitability.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of MSC Industrial Direct Co., Inc.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.
• Liability laws in different countries are different and MSC Industrial Direct Co., Inc. may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for MSC Industrial Direct Co., 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 MSC Industrial Direct Co., 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 MSC Industrial Direct Co., 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 MSC Industrial Direct Co., 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 MSC Industrial Direct Co., 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)