Smith Micro Software, Inc. SWOT Analysis / Matrix

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

The Smith Micro Software, Inc. is one of the leading companies in its industry. Smith Micro Software, Inc. maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis a highly 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 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 Smith Micro Software, 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 primary purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Smith Micro Software, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Smith Micro Software, Inc. SWOT Analysis

Strengths of Smith Micro Software, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Smith Micro Software, 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 Smith Micro Software, Inc. are –

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• 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.
• Highly successful at Go To Market strategies for its products.
• Good Returns on Capital Expenditure – Smith Micro Software, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• 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.
• Strong Free Cash Flow – Smith Micro Software, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Successful track record of developing new products – product innovation.
• 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.
• Strong Brand Portfolio – Over the years Smith Micro Software, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Smith Micro Software, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

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Weakness of Smith Micro Software, Inc. – Internal Strategic Factors

Weakness are the areas where Smith Micro Software, 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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• Limited success outside core business – Even though Smith Micro Software, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Smith Micro Software, 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.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Smith Micro Software, 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.
• The profitability ratio and Net Contribution % of Smith Micro Software, Inc. are below the industry average.
• 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.
• High attrition rate in work force – compare to other organizations in the industry Smith Micro Software, 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 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 Smith Micro Software, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.

Opportunities for Smith Micro Software, Inc. – External Strategic Factors

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• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Smith Micro Software, Inc..
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Smith Micro Software, Inc. to increase its profitability.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Smith Micro Software, Inc. an opportunity to enter a new emerging market.
• 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 Smith Micro Software, Inc. in other product categories.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Smith Micro Software, 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.
• 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 Smith Micro Software, Inc. to drive home its advantage in new technology and gain market share in the new product category.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Smith Micro Software, Inc. to capture new customers and increase its market share.
• New trends in the consumer behavior can open up new market for the Smith Micro Software, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Smith Micro Software, Inc. Facing - External Strategic Factors

• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Smith Micro Software, Inc.   in those markets.
• No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• 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 environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Rising raw material can pose a threat to the Smith Micro Software, Inc. profitability.

Limitations of SWOT Analysis for Smith Micro Software, 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 Smith Micro Software, 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 Smith Micro Software, 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 Smith Micro Software, 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 Smith Micro Software, 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)