Chongherr Investments Ltd SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Chongherr Investments Ltd managers to do a situational analysis of the firm . It is a handy technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Chongherr Investments Ltd is facing in its current business environment.

The Chongherr Investments Ltd is one of the leading companies in its industry. Chongherr Investments Ltd 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 organization 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Chongherr Investments Ltd to develop four types of strategies:

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

Chongherr Investments Ltd swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Chongherr Investments Ltd strengths, and eradicate its weaknesses.

Step by Step Guide to Chongherr Investments Ltd SWOT Analysis

Strengths of Chongherr Investments Ltd – Internal Strategic Factors

As one of the leading companies in its industry, Chongherr Investments Ltd 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 Chongherr Investments Ltd are –

Read - Chongherr Investments Ltd Porter 5 Forces Analysis & Industry Analysis
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Strong Free Cash Flow – Chongherr Investments Ltd 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. Chongherr Investments Ltd 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.
Good Returns on Capital Expenditure – Chongherr Investments Ltd 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.
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.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Highly successful at Go To Market strategies for its products.

Weakness of Chongherr Investments Ltd – Internal Strategic Factors

Weakness are the areas where Chongherr Investments Ltd 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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The profitability ratio and Net Contribution % of Chongherr Investments Ltd 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.
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.
Limited success outside core business – Even though Chongherr Investments Ltd is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Chongherr Investments Ltd 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.
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. Chongherr Investments Ltd has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for Chongherr Investments Ltd – External Strategic Factors

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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.
The new technology provides an opportunity to Chongherr Investments Ltd to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
New trends in the consumer behavior can open up new market for the Chongherr Investments Ltd . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
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 Chongherr Investments Ltd to drive home its advantage in new technology and gain market share in the new product category.
Government green drive also opens an opportunity for procurement of Chongherr Investments Ltd products by the state as well as federal government contractors.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Chongherr Investments Ltd to capture new customers and increase its market share.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Chongherr Investments Ltd.
The market development will lead to dilution of competitor’s advantage and enable Chongherr Investments Ltd to increase its competitiveness compare to the other competitors.

Threats Chongherr Investments Ltd Facing - External Strategic Factors

The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those 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 Chongherr Investments Ltd
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
Rising raw material can pose a threat to the Chongherr Investments Ltd profitability.
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.
Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
Liability laws in different countries are different and Chongherr Investments Ltd may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Chongherr Investments Ltd

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 Chongherr Investments Ltd
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 Chongherr Investments Ltd

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 Chongherr Investments Ltd 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 Chongherr Investments Ltd

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)