O2Micro International Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by O2Micro International Limited managers to do a situational analysis of the company . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) O2Micro International Limited is facing in its current business environment.

The O2Micro International Limited is one of the leading organizatations in its industry. O2Micro International Limited maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the organization such as – marketing, finance, operations, management information systems and strategic planning.

Order Now - O2Micro International Limited SWOT Analysis
Check out- O2Micro International Limited 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the O2Micro International Limited to develop four types of strategies:

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

O2Micro International Limited swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect O2Micro International Limited strengths, and eradicate its weaknesses.

Step by Step Guide to O2Micro International Limited SWOT Analysis

Strengths of O2Micro International Limited – Internal Strategic Factors

As one of the leading firms in its industry, O2Micro International Limited 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 O2Micro International Limited are –

Read - O2Micro International Limited Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

Automation of activities brought consistency of quality to O2Micro International Limited 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 O2Micro International Limited has invested in building a strong brand portfolio. The SWOT analysis of O2Micro International Limited just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Strong distribution network – Over the years O2Micro International Limited has built a reliable distribution network that can reach majority of its potential market.
Successful track record of developing new products – product innovation.
Strong Free Cash Flow – O2Micro International Limited 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. O2Micro International Limited 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.
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.

Weakness of O2Micro International Limited – Internal Strategic Factors

Weakness are the areas where O2Micro International 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.

Article continues after advertisement

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 O2Micro International Limited has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though O2Micro International Limited is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
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 O2Micro International Limited
The profitability ratio and Net Contribution % of O2Micro International Limited are below the industry average.
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. O2Micro International Limited has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Limited success outside core business – Even though O2Micro International Limited is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for O2Micro International Limited – External Strategic Factors

Article continues after advertisement

Government green drive also opens an opportunity for procurement of O2Micro International Limited products by the state as well as federal government contractors.
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 O2Micro International Limited. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of O2Micro International Limited.
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 O2Micro International Limited to drive home its advantage in new technology and gain market share in the new product category.
The new technology provides an opportunity to O2Micro International Limited 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.
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 O2Micro International Limited in other product categories.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of O2Micro International Limited’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.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for O2Micro International Limited to capture new customers and increase its market share.

Threats O2Micro International Limited Facing - External Strategic Factors

Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Liability laws in different countries are different and O2Micro International Limited 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 O2Micro International Limited
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.
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.
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 O2Micro International Limited profitability.
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 O2Micro International 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 O2Micro International 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.

Article continues after advertisement

Weighted SWOT Analysis of O2Micro International 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 O2Micro International 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 O2Micro International 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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of O2Micro International Limited

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)