Digital Power Corporation SWOT Analysis / Matrix

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

The Digital Power Corporation is one of the leading companies in its industry. Digital Power Corporation maintains its dominant 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 organization such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework helps 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 enables the managers of the Digital Power Corporation to develop four types of strategies:

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

Digital Power Corporation swot analysis / matrix

SWOT Matrix Strategies Objective

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

Step by Step Guide to Digital Power Corporation SWOT Analysis

Strengths of Digital Power Corporation – Internal Strategic Factors

As one of the leading companies in its industry, Digital Power 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 Digital Power Corporation are –

Read - Digital Power Corporation Porter 5 Forces Analysis & Industry Analysis
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Strong Free Cash Flow – Digital Power Corporation has strong free cash flows that provide resources in the hand of the company to expand into new projects.
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.
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.
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.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Automation of activities brought consistency of quality to Digital Power Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Good Returns on Capital Expenditure – Digital Power Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weakness of Digital Power Corporation – Internal Strategic Factors

Weakness are the areas where Digital Power Corporation can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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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.
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.
High attrition rate in work force – compare to other organizations in the industry Digital Power Corporation 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, Digital Power 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.
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.
The profitability ratio and Net Contribution % of Digital Power Corporation are below the industry average.
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 Digital Power Corporation

Opportunities for Digital Power Corporation – 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 Digital Power 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.
Government green drive also opens an opportunity for procurement of Digital Power Corporation products by the state as well as federal government contractors.
The new technology provides an opportunity to Digital Power 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 Digital Power Corporation 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.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Digital Power Corporation to capture new customers and increase its market share.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Digital Power Corporation.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Digital Power 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.

Threats Digital Power Corporation Facing - External Strategic Factors

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.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
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.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Digital Power Corporation in those markets.
Rising raw material can pose a threat to the Digital Power Corporation profitability.
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 Digital Power Corporation

Limitations of SWOT Analysis for Digital Power 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 Digital Power 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 Digital Power 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 Digital Power 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 Digital Power 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

You can email us to get an example document of Weighted SWOT analysis.

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)