GDS Holdings Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The GDS Holdings Limited is one of the leading firms in its industry. GDS Holdings Limited maintains its prominent 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 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 known as SWOT Matrix.

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

Step by Step Guide to GDS Holdings Limited SWOT Analysis

Strengths of GDS Holdings Limited – Internal Strategic Factors

As one of the leading firms in its industry, GDS Holdings Limited 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 GDS Holdings Limited are –

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• Superb Performance in New Markets – GDS Holdings Limited 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.
• 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.
• 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 Free Cash Flow – GDS Holdings Limited 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.
• Strong distribution network – Over the years GDS Holdings Limited has built a reliable distribution network that can reach majority of its potential market.
• Good Returns on Capital Expenditure – GDS Holdings Limited 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 GDS Holdings Limited products and has enabled the company to scale up and scale down based on the demand conditions in the market.

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Weakness of GDS Holdings Limited – Internal Strategic Factors

Weakness are the areas where GDS Holdings Limited 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 GDS Holdings Limited
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• High attrition rate in work force – compare to other organizations in the industry GDS Holdings Limited has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Limited success outside core business – Even though GDS Holdings Limited 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 GDS Holdings Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, GDS Holdings Limited 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 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. GDS Holdings Limited has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for GDS Holdings Limited – External Strategic Factors

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• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as GDS Holdings Limited to increase its profitability.
• New trends in the consumer behavior can open up new market for the GDS Holdings Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• 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 GDS Holdings Limited in other product categories.
• Government green drive also opens an opportunity for procurement of GDS Holdings Limited products by the state as well as federal government contractors.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided GDS Holdings Limited an opportunity to enter a new emerging market.
• The market development will lead to dilution of competitor’s advantage and enable GDS Holdings Limited to increase its competitiveness compare to the other competitors.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for GDS Holdings Limited 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.

Threats GDS Holdings Limited Facing - External Strategic Factors

• 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.
• Liability laws in different countries are different and GDS Holdings Limited may be exposed to various liability claims given change in policies 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 technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Rising raw material can pose a threat to the GDS Holdings Limited profitability.
• Imitation of the counterfeit and low quality product is also a threat to GDS Holdings Limited’s product especially in the emerging markets and low income markets.
• 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 GDS Holdings Limited

Limitations of SWOT Analysis for GDS Holdings Limited

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 GDS Holdings Limited
• 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 GDS Holdings Limited

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 GDS Holdings Limited 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 GDS Holdings Limited

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)