Arista Networks, Inc. SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Arista Networks, Inc. managers to do a situational analysis of the firm . It is a handy technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Arista Networks, Inc. is facing in its current business environment.

The Arista Networks, Inc. is one of the leading firms in its industry. Arista Networks, 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 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 called SWOT Matrix.

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

Step by Step Guide to Arista Networks, Inc. SWOT Analysis

Strengths of Arista Networks, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Arista Networks, 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 Arista Networks, 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.
• Strong Free Cash Flow – Arista Networks, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Good Returns on Capital Expenditure – Arista Networks, 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 Brand Portfolio – Over the years Arista Networks, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Arista Networks, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Strong distribution network – Over the years Arista Networks, Inc. has built a reliable distribution network that can reach majority of its potential 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.

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Weakness of Arista Networks, Inc. – Internal Strategic Factors

Weakness are the areas where Arista Networks, Inc. can improve upon. Strategy is about making choices and weakness are the areas where a company 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 Arista Networks, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• 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 Arista Networks, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• The profitability ratio and Net Contribution % of Arista Networks, Inc. are below the industry average.
• 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.
• High attrition rate in work force – compare to other organizations in the industry Arista Networks, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Arista Networks, 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.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for Arista Networks, Inc. – External Strategic Factors

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• 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 Arista Networks, 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.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Arista Networks, Inc. to capture new customers and increase its market share.
• Government green drive also opens an opportunity for procurement of Arista Networks, Inc. products by the state as well as federal government contractors.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Arista Networks, 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.
• 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 Arista Networks, Inc. to drive home its advantage in new technology and gain market share in the new product category.
• 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 Arista Networks, Inc. in other product categories.
• The market development will lead to dilution of competitor’s advantage and enable Arista Networks, Inc. to increase its competitiveness compare to the other competitors.

Threats Arista Networks, 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.
• 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.
• Rising raw material can pose a threat to the Arista Networks, Inc. profitability.
• Liability laws in different countries are different and Arista Networks, Inc. may be exposed to various liability claims given change in policies in those markets.
• 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Arista Networks, Inc.   in those markets.

Limitations of SWOT Analysis for Arista Networks, 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 Arista Networks, 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 Arista Networks, 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 Arista Networks, 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 Arista Networks, 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)