Planet Payment, Inc. SWOT Analysis / Matrix

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

The Planet Payment, Inc. is one of the leading firms in its industry. Planet Payment, Inc. maintains its prominent 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 firm such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework enables 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 helps the managers of the Planet Payment, 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 company can use to exploit external opportunities, counter threats, and build on & protect Planet Payment, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Planet Payment, Inc. SWOT Analysis

Strengths of Planet Payment, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Planet Payment, 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 Planet Payment, Inc. are –

Read - Planet Payment, Inc. Porter 5 Forces Analysis & Industry Analysis
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• Strong Brand Portfolio – Over the years Planet Payment, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Planet Payment, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Highly skilled workforce through successful training and learning programs. Planet Payment, 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.
• 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 Planet Payment, Inc. has built a reliable distribution network that can reach majority of its potential market.
• Automation of activities brought consistency of quality to Planet Payment, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Good Returns on Capital Expenditure – Planet Payment, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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 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.

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Weakness of Planet Payment, Inc. – Internal Strategic Factors

Weakness are the areas where Planet Payment, 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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• High attrition rate in work force – compare to other organizations in the industry Planet Payment, Inc. 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 Planet Payment, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Planet Payment, 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.
• 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 Planet Payment, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• The profitability ratio and Net Contribution % of Planet Payment, Inc. are below the industry average.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• 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 Planet Payment, Inc. – External Strategic Factors

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

Threats Planet Payment, 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.
• Rising raw material can pose a threat to the Planet Payment, Inc. profitability.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Planet Payment, Inc.
• 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.

Limitations of SWOT Analysis for Planet Payment, 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 Planet Payment, 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 Planet Payment, 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 Planet Payment, 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 Planet Payment, 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)