Vedanta Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Vedanta Limited is one of the leading firms in its industry. Vedanta Limited maintains its prominent position in market by critically 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.

Order Now - Vedanta Limited SWOT Analysis
Check out- Vedanta Limited PESTEL / PEST & Environment Analysis
Article continues after advertisement

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 Vedanta Limited to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Vedanta Limited 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 Vedanta Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Vedanta Limited SWOT Analysis

Strengths of Vedanta Limited – Internal Strategic Factors

As one of the leading firms in its industry, Vedanta 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 Vedanta Limited are –

Read - Vedanta Limited Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

  • Successful track record of developing new products – product innovation.
  • Good Returns on Capital Expenditure – Vedanta Limited is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • 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.
  • 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 skilled workforce through successful training and learning programs. Vedanta 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.
  • Highly successful at Go To Market strategies for its products.
  • 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.

Weakness of Vedanta Limited – Internal Strategic Factors

Weakness are the areas where Vedanta Limited 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.

Article continues after advertisement

  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Vedanta Limited is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • 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 Vedanta Limited
  • 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 Vedanta Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • 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.
  • Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Vedanta 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.
  • 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. Vedanta Limited has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • The profitability ratio and Net Contribution % of Vedanta Limited are below the industry average.

Opportunities for Vedanta Limited – External Strategic Factors

Article continues after advertisement

  • 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.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Vedanta Limited to capture new customers and increase its market share.
  • New trends in the consumer behavior can open up new market for the Vedanta Limited . 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 Vedanta Limited an opportunity to enter a new emerging market.
  • 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 Vedanta Limited. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Vedanta Limited’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 Vedanta Limited 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 Vedanta Limited to increase its profitability.

Threats Vedanta Limited Facing - External Strategic Factors

  • Imitation of the counterfeit and low quality product is also a threat to Vedanta Limited’s product especially in the emerging markets and low income markets.
  • 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.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • Rising raw material can pose a threat to the Vedanta Limited profitability.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Vedanta Limited   in those markets.

Limitations of SWOT Analysis for Vedanta 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 Vedanta 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.

Article continues after advertisement

Weighted SWOT Analysis of Vedanta 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 Vedanta 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 Vedanta 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.

Buy Custom Essay and Term Paper on SWOT Analysis / Matrix , Weighted SWOT Analysis of Vedanta Limited

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)