Fe Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Fe Limited is one of the leading companies in its industry. Fe 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.

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

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 enables the managers of the Fe Limited to develop four types of strategies:

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

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Fe Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Fe Limited SWOT Analysis

Strengths of Fe Limited – Internal Strategic Factors

As one of the leading companies in its industry, Fe 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 Fe Limited are –

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

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.
Strong Brand Portfolio – Over the years Fe Limited has invested in building a strong brand portfolio. The SWOT analysis of Fe Limited just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Strong Free Cash Flow – Fe 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. Fe 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.
Superb Performance in New Markets – Fe 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 Fe Limited has built a reliable distribution network that can reach majority of its potential market.
Good Returns on Capital Expenditure – Fe 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 Fe Limited – Internal Strategic Factors

Weakness are the areas where Fe Limited can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

Article continues after advertisement

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 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 Fe Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
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 Fe Limited
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. Fe Limited has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Fe Limited is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Investment in Research and Development is below the fastest growing players in the industry. Even though Fe Limited is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
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.

Opportunities for Fe Limited – External Strategic Factors

Article continues after advertisement

The new technology provides an opportunity to Fe Limited 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.
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 Fe Limited in other product categories.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Fe Limited an opportunity to enter a new emerging market.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Fe 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 trends in the consumer behavior can open up new market for the Fe Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Fe Limited.
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 Fe 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 Fe Limited to increase its profitability.

Threats Fe Limited Facing - External Strategic Factors

Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Fe Limited
Rising raw material can pose a threat to the Fe Limited 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.
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.
Imitation of the counterfeit and low quality product is also a threat to Fe Limited’s product especially in the emerging markets and low income markets.
Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Fe Limited in those markets.
Liability laws in different countries are different and Fe Limited may be exposed to various liability claims given change in policies in those markets.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for Fe 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 Fe 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 Fe 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 Fe 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 Fe 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 Fe 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)