FactSet Research Systems Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The FactSet Research Systems Inc. is one of the leading companies in its industry. FactSet Research Systems Inc. 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the FactSet Research Systems 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 an organization can use to exploit external opportunities, counter threats, and build on & protect FactSet Research Systems Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to FactSet Research Systems Inc. SWOT Analysis

Strengths of FactSet Research Systems Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, FactSet Research Systems Inc. has numerous strengths that enable 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 FactSet Research Systems Inc. are –

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• Successful track record of developing new products – product innovation.
• 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 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.
• Superb Performance in New Markets – FactSet Research Systems Inc. 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 distribution network – Over the years FactSet Research Systems Inc. has built a reliable distribution network that can reach majority of its potential market.
• Strong Free Cash Flow – FactSet Research Systems Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Highly skilled workforce through successful training and learning programs. FactSet Research Systems Inc. is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
• 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.

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Weakness of FactSet Research Systems Inc. – Internal Strategic Factors

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

Opportunities for FactSet Research Systems Inc. – 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 FactSet Research Systems Inc. to capture new customers and increase its market share.
• 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.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided FactSet Research Systems Inc. an opportunity to enter a new emerging market.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of FactSet Research Systems Inc..
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as FactSet Research Systems Inc. to increase its profitability.
• 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 FactSet Research Systems 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 FactSet Research Systems Inc. in other product categories.
• Government green drive also opens an opportunity for procurement of FactSet Research Systems Inc. products by the state as well as federal government contractors.

Threats FactSet Research Systems Inc. Facing - External Strategic Factors

• 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.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• 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.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Liability laws in different countries are different and FactSet Research Systems Inc. may be exposed to various liability claims given change in policies in those markets.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for FactSet Research Systems Inc.   in those markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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 FactSet Research Systems 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 FactSet Research Systems 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 FactSet Research Systems 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 FactSet Research Systems 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 FactSet Research Systems 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)