Superior Drilling Products, Inc. SWOT Analysis / Matrix

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

The Superior Drilling Products, Inc. is one of the leading firms in its industry. Superior Drilling Products, 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Superior Drilling Products, Inc. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Superior Drilling Products, Inc. swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Superior Drilling Products, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Superior Drilling Products, Inc. SWOT Analysis

Strengths of Superior Drilling Products, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Superior Drilling Products, 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 Superior Drilling Products, 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.
  • Successful track record of developing new products – product innovation.
  • 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.
  • Strong distribution network – Over the years Superior Drilling Products, Inc. has built a reliable distribution network that can reach majority of its potential market.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • 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.
  • Automation of activities brought consistency of quality to Superior Drilling Products, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.

Weakness of Superior Drilling Products, Inc. – Internal Strategic Factors

Weakness are the areas where Superior Drilling Products, 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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  • 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 Superior Drilling Products, Inc.
  • 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. Superior Drilling Products, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • High attrition rate in work force – compare to other organizations in the industry Superior Drilling Products, 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 Superior Drilling Products, Inc. are below the industry average.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • 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.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Superior Drilling Products, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Superior Drilling Products, Inc. – External Strategic Factors

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  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Superior Drilling Products, 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.
  • The market development will lead to dilution of competitor’s advantage and enable Superior Drilling Products, Inc. to increase its competitiveness compare to the other competitors.
  • 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 Superior Drilling Products, Inc. to drive home its advantage in new technology and gain market share in the new product category.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Superior Drilling Products, Inc. to increase its profitability.
  • New trends in the consumer behavior can open up new market for the Superior Drilling Products, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • 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.
  • Government green drive also opens an opportunity for procurement of Superior Drilling Products, Inc. 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 Superior Drilling Products, 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.

Threats Superior Drilling Products, 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.
  • 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.
  • 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.
  • 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 Superior Drilling Products, Inc.   in those markets.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for Superior Drilling Products, 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 Superior Drilling Products, 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 Superior Drilling Products, 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 Superior Drilling Products, 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 Superior Drilling Products, 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)