Sears Hometown and Outlet Stores, Inc. SWOT Analysis / Matrix

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

The Sears Hometown and Outlet Stores, Inc. is one of the leading companies in its industry. Sears Hometown and Outlet Stores, Inc. maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly 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 Sears Hometown and Outlet Stores, 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 an organization can use to exploit external opportunities, counter threats, and build on & protect Sears Hometown and Outlet Stores, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Sears Hometown and Outlet Stores, Inc. SWOT Analysis

Strengths of Sears Hometown and Outlet Stores, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Sears Hometown and Outlet Stores, 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 Sears Hometown and Outlet Stores, Inc. are –

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• 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.
• Highly successful at Go To Market strategies for its products.
• Good Returns on Capital Expenditure – Sears Hometown and Outlet Stores, 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 Brand Portfolio – Over the years Sears Hometown and Outlet Stores, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Sears Hometown and Outlet Stores, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Successful track record of developing new products – product innovation.
• Automation of activities brought consistency of quality to Sears Hometown and Outlet Stores, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• 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.

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Weakness of Sears Hometown and Outlet Stores, Inc. – Internal Strategic Factors

Weakness are the areas where Sears Hometown and Outlet Stores, 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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• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• 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.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Sears Hometown and Outlet Stores, 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.
• 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 Sears Hometown and Outlet Stores, Inc. 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 Sears Hometown and Outlet Stores, 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 Sears Hometown and Outlet Stores, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Sears Hometown and Outlet Stores, 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.

Opportunities for Sears Hometown and Outlet Stores, Inc. – External Strategic Factors

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• 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 Sears Hometown and Outlet Stores, Inc. in other product categories.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Sears Hometown and Outlet Stores, Inc. to increase its profitability.
• Government green drive also opens an opportunity for procurement of Sears Hometown and Outlet Stores, Inc. products by the state as well as federal government contractors.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Sears Hometown and Outlet Stores, Inc. an opportunity to enter a new emerging market.
• 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.
• The market development will lead to dilution of competitor’s advantage and enable Sears Hometown and Outlet Stores, Inc. to increase its competitiveness compare to the other competitors.
• The new technology provides an opportunity to Sears Hometown and Outlet Stores, 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.
• New trends in the consumer behavior can open up new market for the Sears Hometown and Outlet Stores, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Sears Hometown and Outlet Stores, Inc. 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 pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Sears Hometown and Outlet Stores, Inc.
• Liability laws in different countries are different and Sears Hometown and Outlet Stores, Inc. may be exposed to various liability claims given change in policies in those markets.
• 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.
• Rising raw material can pose a threat to the Sears Hometown and Outlet Stores, Inc. profitability.
• 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.
• Imitation of the counterfeit and low quality product is also a threat to Sears Hometown and Outlet Stores, Inc.’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Sears Hometown and Outlet Stores, 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 Sears Hometown and Outlet Stores, 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 Sears Hometown and Outlet Stores, 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 Sears Hometown and Outlet Stores, 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 Sears Hometown and Outlet Stores, 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)