Magnum Gas & Power Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Magnum Gas & Power Limited managers to do a situational analysis of the company . It is a handy technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Magnum Gas & Power Limited is facing in its current business environment.

The Magnum Gas & Power Limited is one of the leading organizatations in its industry. Magnum Gas & Power Limited maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Magnum Gas & Power Limited to develop four types of strategies:

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

Magnum Gas & Power Limited swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Magnum Gas & Power Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Magnum Gas & Power Limited SWOT Analysis

Strengths of Magnum Gas & Power Limited – Internal Strategic Factors

As one of the leading firms in its industry, Magnum Gas & Power 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 Magnum Gas & Power Limited are –

Read - Magnum Gas & Power Limited Porter 5 Forces Analysis & Industry Analysis
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Automation of activities brought consistency of quality to Magnum Gas & Power Limited products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Successful track record of developing new products – product innovation.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Strong Free Cash Flow – Magnum Gas & Power 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. Magnum Gas & Power 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.
Strong distribution network – Over the years Magnum Gas & Power Limited has built a reliable distribution network that can reach majority of its potential market.
Strong Brand Portfolio – Over the years Magnum Gas & Power Limited has invested in building a strong brand portfolio. The SWOT analysis of Magnum Gas & Power Limited just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

Weakness of Magnum Gas & Power Limited – Internal Strategic Factors

Weakness are the areas where Magnum Gas & Power 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.

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High attrition rate in work force – compare to other organizations in the industry Magnum Gas & Power Limited 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 Magnum Gas & Power Limited are below the industry average.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Magnum Gas & Power Limited 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.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
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 Magnum Gas & Power Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
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.
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 Magnum Gas & Power Limited

Opportunities for Magnum Gas & Power Limited – 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 Magnum Gas & Power Limited.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Magnum Gas & Power Limited an opportunity to enter a new emerging market.
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.
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 Magnum Gas & Power Limited in other product categories.
The market development will lead to dilution of competitor’s advantage and enable Magnum Gas & Power Limited 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 Magnum Gas & Power Limited 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 Magnum Gas & Power Limited to capture new customers and increase its market share.
Government green drive also opens an opportunity for procurement of Magnum Gas & Power Limited products by the state as well as federal government contractors.

Threats Magnum Gas & Power Limited 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.
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.
Imitation of the counterfeit and low quality product is also a threat to Magnum Gas & Power Limited’s product especially in the emerging markets and low income 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 Magnum Gas & Power Limited
Rising raw material can pose a threat to the Magnum Gas & Power Limited profitability.
Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
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.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Limitations of SWOT Analysis for Magnum Gas & Power 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 Magnum Gas & Power 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.

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Weighted SWOT Analysis of Magnum Gas & Power 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 Magnum Gas & Power 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 Magnum Gas & Power 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.

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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)