Pact Group Holdings Ltd SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Pact Group Holdings Ltd is one of the leading firms in its industry. Pact Group Holdings Ltd maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis an immensenly 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Pact Group Holdings Ltd to develop four types of strategies:

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

Pact Group Holdings 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 Pact Group Holdings Ltd strengths, and eradicate its weaknesses.

Step by Step Guide to Pact Group Holdings Ltd SWOT Analysis

Strengths of Pact Group Holdings Ltd – Internal Strategic Factors

As one of the leading organizations in its industry, Pact Group Holdings Ltd 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 Pact Group Holdings Ltd are –

Read - Pact Group Holdings Ltd Porter 5 Forces Analysis & Industry Analysis
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Automation of activities brought consistency of quality to Pact Group Holdings Ltd products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Strong Free Cash Flow – Pact Group Holdings Ltd has strong free cash flows that provide resources in the hand of the company to expand into new projects.
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.
Superb Performance in New Markets – Pact Group Holdings Ltd 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 Pact Group Holdings Ltd has built a reliable distribution network that can reach majority of its potential market.
Strong Brand Portfolio – Over the years Pact Group Holdings Ltd has invested in building a strong brand portfolio. The SWOT analysis of Pact Group Holdings Ltd just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Good Returns on Capital Expenditure – Pact Group Holdings 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.

Weakness of Pact Group Holdings Ltd – Internal Strategic Factors

Weakness are the areas where Pact Group Holdings Ltd 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.

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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. Pact Group Holdings Ltd has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
The profitability ratio and Net Contribution % of Pact Group Holdings Ltd 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, Pact Group Holdings 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.
High attrition rate in work force – compare to other organizations in the industry Pact Group Holdings Ltd has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
Investment in Research and Development is below the fastest growing players in the industry. Even though Pact Group Holdings Ltd 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.
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.

Opportunities for Pact Group Holdings 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.
New trends in the consumer behavior can open up new market for the Pact Group Holdings Ltd . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
The new technology provides an opportunity to Pact Group Holdings 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.
Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Pact Group Holdings Ltd to capture new customers and increase its market share.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Pact Group Holdings Ltd to increase its profitability.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Pact Group Holdings Ltd an opportunity to enter a new emerging market.
Government green drive also opens an opportunity for procurement of Pact Group Holdings Ltd products by the state as well as federal government contractors.
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 Pact Group Holdings Ltd. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats Pact Group Holdings Ltd Facing - External Strategic Factors

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.
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 Pact Group Holdings Ltd profitability.
New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Imitation of the counterfeit and low quality product is also a threat to Pact Group Holdings Ltd’s product especially in the emerging markets and low income markets.
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.

Limitations of SWOT Analysis for Pact Group Holdings 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 Pact Group Holdings 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 Pact Group Holdings 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 Pact Group Holdings 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 Pact Group Holdings 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

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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)