HC2 Holdings, Inc. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by HC2 Holdings, Inc. managers to do a situational analysis of the company . It is a useful technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) HC2 Holdings, Inc. is facing in its current business environment.

The HC2 Holdings, Inc. is one of the leading companies in its industry. HC2 Holdings, 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 company 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 enables the managers of the HC2 Holdings, 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 utilize to exploit external opportunities, counter threats, and build on & protect HC2 Holdings, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to HC2 Holdings, Inc. SWOT Analysis

Strengths of HC2 Holdings, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, HC2 Holdings, 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 HC2 Holdings, Inc. are –

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• Automation of activities brought consistency of quality to HC2 Holdings, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Strong Brand Portfolio – Over the years HC2 Holdings, Inc. has invested in building a strong brand portfolio. The SWOT analysis of HC2 Holdings, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Highly successful at Go To Market strategies for its 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.
• Good Returns on Capital Expenditure – HC2 Holdings, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.
• Highly skilled workforce through successful training and learning programs. HC2 Holdings, 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.

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Weakness of HC2 Holdings, Inc. – Internal Strategic Factors

Weakness are the areas where HC2 Holdings, Inc. 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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• 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.
• 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 HC2 Holdings, Inc.
• 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. HC2 Holdings, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• Investment in Research and Development is below the fastest growing players in the industry. Even though HC2 Holdings, 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 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.
• 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.

Opportunities for HC2 Holdings, Inc. – External Strategic Factors

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• New trends in the consumer behavior can open up new market for the HC2 Holdings, 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 HC2 Holdings, 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 HC2 Holdings, Inc. in other product categories.
• The new technology provides an opportunity to HC2 Holdings, Inc. 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.
• Government green drive also opens an opportunity for procurement of HC2 Holdings, Inc. products by the state as well as federal government contractors.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of HC2 Holdings, Inc.’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.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of HC2 Holdings, Inc..
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided HC2 Holdings, Inc. an opportunity to enter a new emerging market.

Threats HC2 Holdings, Inc. Facing - External Strategic Factors

• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of HC2 Holdings, Inc.
• 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.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Imitation of the counterfeit and low quality product is also a threat to HC2 Holdings, Inc.’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for HC2 Holdings, 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 HC2 Holdings, 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 HC2 Holdings, 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 HC2 Holdings, 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 HC2 Holdings, 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)