Diatreme Resources Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Diatreme Resources Limited is one of the leading companies in its industry. Diatreme Resources 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 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Diatreme Resources Limited to develop four types of strategies:

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

Diatreme Resources Limited 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 Diatreme Resources Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Diatreme Resources Limited SWOT Analysis

Strengths of Diatreme Resources Limited – Internal Strategic Factors

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

Read - Diatreme Resources Limited Porter 5 Forces Analysis & Industry Analysis
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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.
Strong Free Cash Flow – Diatreme Resources Limited has strong free cash flows that provide resources in the hand of the company to expand into new projects.
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.
Superb Performance in New Markets – Diatreme Resources Limited 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.
Strong distribution network – Over the years Diatreme Resources Limited has built a reliable distribution network that can reach majority of its potential market.
Good Returns on Capital Expenditure – Diatreme Resources 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.

Weakness of Diatreme Resources Limited – Internal Strategic Factors

Weakness are the areas where Diatreme Resources 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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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. Diatreme Resources Limited has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
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 Diatreme Resources Limited
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Diatreme Resources Limited is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
The profitability ratio and Net Contribution % of Diatreme Resources Limited are below the industry average.
High attrition rate in work force – compare to other organizations in the industry Diatreme Resources Limited has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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.

Opportunities for Diatreme Resources Limited – External Strategic Factors

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Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Diatreme Resources Limited to capture new customers and increase its market share.
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 Diatreme Resources 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.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Diatreme Resources Limited to increase its profitability.
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 market development will lead to dilution of competitor’s advantage and enable Diatreme Resources Limited to increase its competitiveness compare to the other competitors.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Diatreme Resources 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.
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 Diatreme Resources Limited to drive home its advantage in new technology and gain market share in the new product category.
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 Diatreme Resources Limited in other product categories.

Threats Diatreme Resources Limited Facing - External Strategic Factors

Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Liability laws in different countries are different and Diatreme Resources Limited may be exposed to various liability claims given change in policies in those markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Diatreme Resources Limited in those markets.
The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
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.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Rising raw material can pose a threat to the Diatreme Resources Limited profitability.

Limitations of SWOT Analysis for Diatreme Resources 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 Diatreme Resources 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 Diatreme Resources 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 Diatreme Resources 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 Diatreme Resources 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)