Cabot Microelectronics Corporation SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Cabot Microelectronics Corporation is one of the leading firms in its industry. Cabot Microelectronics Corporation maintains its prominent position in market by critically 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 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 called SWOT Matrix.

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

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

Cabot Microelectronics Corporation swot analysis / matrix

SWOT Matrix Strategies Objective

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

Step by Step Guide to Cabot Microelectronics Corporation SWOT Analysis

Strengths of Cabot Microelectronics Corporation – Internal Strategic Factors

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

Read - Cabot Microelectronics Corporation Porter 5 Forces Analysis & Industry Analysis
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Highly successful at Go To Market strategies for its products.
Strong Brand Portfolio – Over the years Cabot Microelectronics Corporation has invested in building a strong brand portfolio. The SWOT analysis of Cabot Microelectronics Corporation 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 Cabot Microelectronics Corporation has built a reliable distribution network that can reach majority of its potential market.
Superb Performance in New Markets – Cabot Microelectronics 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.
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.
Good Returns on Capital Expenditure – Cabot Microelectronics Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Automation of activities brought consistency of quality to Cabot Microelectronics Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Weakness of Cabot Microelectronics Corporation – Internal Strategic Factors

Weakness are the areas where Cabot Microelectronics Corporation 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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Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Cabot Microelectronics Corporation
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
The profitability ratio and Net Contribution % of Cabot Microelectronics Corporation are below the industry average.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Cabot Microelectronics Corporation 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.
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.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Cabot Microelectronics Corporation is successful at integrating small companies it has its share of failure to merge firms that have different work 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 Cabot Microelectronics Corporation is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for Cabot Microelectronics Corporation – External Strategic Factors

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The new technology provides an opportunity to Cabot Microelectronics Corporation 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.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Cabot Microelectronics Corporation 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 Cabot Microelectronics Corporation. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
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 Cabot Microelectronics Corporation in other product categories.
The market development will lead to dilution of competitor’s advantage and enable Cabot Microelectronics Corporation to increase its competitiveness compare to the other competitors.
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.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Cabot Microelectronics 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.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Cabot Microelectronics Corporation to increase its profitability.

Threats Cabot Microelectronics Corporation Facing - External Strategic Factors

Rising raw material can pose a threat to the Cabot Microelectronics Corporation 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 Cabot Microelectronics Corporation
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
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.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Imitation of the counterfeit and low quality product is also a threat to Cabot Microelectronics Corporation’s product especially in the emerging markets and low income markets.
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.

Limitations of SWOT Analysis for Cabot Microelectronics 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 Cabot Microelectronics 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 Cabot Microelectronics 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 Cabot Microelectronics 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 Cabot Microelectronics 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)