Varonis Systems, Inc. SWOT Analysis / Matrix

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

The Varonis Systems, Inc. is one of the leading firms in its industry. Varonis Systems, Inc. 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 firm 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Varonis Systems, Inc. to develop four types of strategies:

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

Varonis Systems, Inc. swot analysis / matrix

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 Varonis Systems, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Varonis Systems, Inc. SWOT Analysis

Strengths of Varonis Systems, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Varonis Systems, Inc. has numerous strengths that help 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 Varonis Systems, Inc. are –

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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 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 – Varonis Systems, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Superb Performance in New Markets – Varonis Systems, 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.
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 Varonis Systems, Inc. has built a reliable distribution network that can reach majority of its potential market.
Strong Brand Portfolio – Over the years Varonis Systems, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Varonis Systems, 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.

Weakness of Varonis Systems, Inc. – Internal Strategic Factors

Weakness are the areas where Varonis Systems, 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.

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Investment in Research and Development is below the fastest growing players in the industry. Even though Varonis Systems, 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, Varonis Systems, 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.
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 Varonis Systems, Inc.
High attrition rate in work force – compare to other organizations in the industry Varonis Systems, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
The profitability ratio and Net Contribution % of Varonis Systems, Inc. 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. Varonis Systems, 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 Varonis Systems, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Varonis Systems, Inc. – External Strategic Factors

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The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Varonis Systems, Inc. to increase its profitability.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Varonis Systems, Inc. to capture new customers and increase its market share.
Government green drive also opens an opportunity for procurement of Varonis Systems, Inc. products by the state as well as federal government contractors.
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 Varonis Systems, Inc. to drive home its advantage in new technology and gain market share in the new product category.
The market development will lead to dilution of competitor’s advantage and enable Varonis Systems, Inc. to increase its competitiveness compare to the other competitors.
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 Varonis Systems, Inc. in other product categories.
New trends in the consumer behavior can open up new market for the Varonis Systems, 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 Varonis Systems, Inc. an opportunity to enter a new emerging market.

Threats Varonis Systems, Inc. Facing - External Strategic Factors

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.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Varonis Systems, 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.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Liability laws in different countries are different and Varonis Systems, Inc. may be exposed to various liability claims given change in policies in those markets.
Rising raw material can pose a threat to the Varonis Systems, Inc. profitability.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Varonis Systems, Inc. in those markets.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

Limitations of SWOT Analysis for Varonis Systems, 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 Varonis Systems, 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 Varonis Systems, 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 Varonis Systems, 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 Varonis Systems, 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)