FalconStor Software, Inc. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by FalconStor Software, Inc. managers to do a situational analysis of the organization . It is a useful technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) FalconStor Software, Inc. is facing in its current business environment.

The FalconStor Software, Inc. is one of the leading organizatations in its industry. FalconStor Software, Inc. maintains its dominant position in market by carefully 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 enables the managers of the FalconStor Software, 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 central purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect FalconStor Software, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to FalconStor Software, Inc. SWOT Analysis

Strengths of FalconStor Software, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, FalconStor Software, 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 FalconStor Software, Inc. are –

Read - FalconStor Software, Inc. Porter 5 Forces Analysis & Industry Analysis
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• Highly successful at Go To Market strategies for its products.
• 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.
• 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.
• Strong Free Cash Flow – FalconStor Software, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Successful track record of developing new products – product innovation.
• 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 FalconStor Software, Inc. has invested in building a strong brand portfolio. The SWOT analysis of FalconStor Software, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

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Weakness of FalconStor Software, Inc. – Internal Strategic Factors

Weakness are the areas where FalconStor Software, 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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• Limited success outside core business – Even though FalconStor Software, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• High attrition rate in work force – compare to other organizations in the industry FalconStor Software, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• 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.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though FalconStor Software, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Investment in Research and Development is below the fastest growing players in the industry. Even though FalconStor Software, 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.
• 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. FalconStor Software, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for FalconStor Software, Inc. – External Strategic Factors

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• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of FalconStor Software, Inc..
• 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.
• Government green drive also opens an opportunity for procurement of FalconStor Software, Inc. products by the state as well as federal government contractors.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for FalconStor Software, Inc. to capture new customers and increase its market share.
• 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 FalconStor Software, Inc. in other product categories.
• The market development will lead to dilution of competitor’s advantage and enable FalconStor Software, Inc. to increase its competitiveness compare to the other competitors.
• New trends in the consumer behavior can open up new market for the FalconStor Software, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• 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 FalconStor Software, Inc. to drive home its advantage in new technology and gain market share in the new product category.

Threats FalconStor Software, Inc. Facing - External Strategic Factors

• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for FalconStor Software, Inc.   in those 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.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Rising raw material can pose a threat to the FalconStor Software, Inc. profitability.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Limitations of SWOT Analysis for FalconStor Software, 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 FalconStor Software, 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 FalconStor Software, 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 FalconStor Software, 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 FalconStor Software, 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)