Ingevity Corporation SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Ingevity Corporation is one of the leading organizatations in its industry. Ingevity Corporation maintains its dominant 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 firm 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Ingevity Corporation to develop four types of strategies:

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

Ingevity Corporation swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Ingevity Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to Ingevity Corporation SWOT Analysis

Strengths of Ingevity Corporation – Internal Strategic Factors

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

Read - Ingevity Corporation Porter 5 Forces Analysis & Industry Analysis
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Good Returns on Capital Expenditure – Ingevity Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
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.
Highly successful at Go To Market strategies for its products.
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.
Superb Performance in New Markets – Ingevity Corporation has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
Strong Brand Portfolio – Over the years Ingevity Corporation has invested in building a strong brand portfolio. The SWOT analysis of Ingevity Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Automation of activities brought consistency of quality to Ingevity Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
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.

Weakness of Ingevity Corporation – Internal Strategic Factors

Weakness are the areas where Ingevity 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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Limited success outside core business – Even though Ingevity Corporation is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Ingevity Corporation is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
Investment in Research and Development is below the fastest growing players in the industry. Even though Ingevity Corporation 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 Ingevity Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
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. Ingevity Corporation has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for Ingevity Corporation – External Strategic Factors

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Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Ingevity Corporation to capture new customers and increase its market share.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Ingevity Corporation to increase its profitability.
Government green drive also opens an opportunity for procurement of Ingevity Corporation products by the state as well as federal government contractors.
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 Ingevity Corporation in other product categories.
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 Ingevity Corporation to drive home its advantage in new technology and gain market share in the new product category.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Ingevity 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 trends in the consumer behavior can open up new market for the Ingevity Corporation . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
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.

Threats Ingevity Corporation Facing - External Strategic Factors

Imitation of the counterfeit and low quality product is also a threat to Ingevity Corporation’s product especially in the emerging markets and low income markets.
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.
Rising raw material can pose a threat to the Ingevity Corporation profitability.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
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.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Ingevity Corporation

Limitations of SWOT Analysis for Ingevity 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 Ingevity 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 Ingevity 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 Ingevity 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 Ingevity 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

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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)