Morningstar, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Morningstar, 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) Morningstar, Inc. is facing in its current business environment.

The Morningstar, Inc. is one of the leading companies in its industry. Morningstar, Inc. 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 firm such as – marketing, finance, operations, management information systems and strategic planning.

Order Now - Morningstar, Inc. SWOT Analysis
Check out- Morningstar, Inc. PESTEL / PEST & Environment Analysis
Article continues after advertisement

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 Morningstar, Inc. to develop four types of strategies:

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

Morningstar, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Morningstar, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Morningstar, Inc. SWOT Analysis

Strengths of Morningstar, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, Morningstar, 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 Morningstar, Inc. are –

Read - Morningstar, Inc. Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

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 – Morningstar, 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 Free Cash Flow – Morningstar, Inc. 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.
Successful track record of developing new products – product innovation.
Strong distribution network – Over the years Morningstar, Inc. has built a reliable distribution network that can reach majority of its potential market.
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.

Weakness of Morningstar, Inc. – Internal Strategic Factors

Weakness are the areas where Morningstar, Inc. can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

Article continues after advertisement

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.
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.
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. Morningstar, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Morningstar, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Limited success outside core business – Even though Morningstar, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Morningstar, Inc. 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.

Opportunities for Morningstar, Inc. – External Strategic Factors

Article continues after advertisement

The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Morningstar, Inc. to increase its profitability.
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 Morningstar, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
New trends in the consumer behavior can open up new market for the Morningstar, Inc. . 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 Morningstar, Inc. in other product categories.
Government green drive also opens an opportunity for procurement of Morningstar, Inc. products by the state as well as federal government contractors.
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.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Morningstar, Inc..
The market development will lead to dilution of competitor’s advantage and enable Morningstar, Inc. to increase its competitiveness compare to the other competitors.

Threats Morningstar, Inc. 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.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards 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.
Rising raw material can pose a threat to the Morningstar, Inc. profitability.
Liability laws in different countries are different and Morningstar, Inc. may be exposed to various liability claims given change in policies 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 Morningstar, Inc.
Imitation of the counterfeit and low quality product is also a threat to Morningstar, Inc.’s product especially in the emerging markets and low income markets.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Limitations of SWOT Analysis for Morningstar, 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 Morningstar, 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.

Article continues after advertisement

Weighted SWOT Analysis of Morningstar, 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 Morningstar, 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 Morningstar, 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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Morningstar, Inc.

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)