Ishares S&P 500 Etf SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Ishares S&P 500 Etf managers to do a situational analysis of the company . It is a useful technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Ishares S&P 500 Etf is facing in its current business environment.

The Ishares S&P 500 Etf is one of the leading firms in its industry. Ishares S&P 500 Etf maintains its dominant 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 company 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 Ishares S&P 500 Etf 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 core purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect Ishares S&P 500 Etf strengths, and eradicate its weaknesses.

Step by Step Guide to Ishares S&P 500 Etf SWOT Analysis

Strengths of Ishares S&P 500 Etf – Internal Strategic Factors

As one of the leading organizations in its industry, Ishares S&P 500 Etf 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 Ishares S&P 500 Etf are –

Read - Ishares S&P 500 Etf Porter 5 Forces Analysis & Industry Analysis
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• Successful track record of developing new products – product innovation.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Strong Brand Portfolio – Over the years Ishares S&P 500 Etf has invested in building a strong brand portfolio. The SWOT analysis of Ishares S&P 500 Etf just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Highly successful at Go To Market strategies for its products.
• Strong Free Cash Flow – Ishares S&P 500 Etf has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Strong distribution network – Over the years Ishares S&P 500 Etf has built a reliable distribution network that can reach majority of its potential market.
• 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 – Ishares S&P 500 Etf 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.

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Weakness of Ishares S&P 500 Etf – Internal Strategic Factors

Weakness are the areas where Ishares S&P 500 Etf 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.
• 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 Ishares S&P 500 Etf is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• High attrition rate in work force – compare to other organizations in the industry Ishares S&P 500 Etf has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Ishares S&P 500 Etf 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 profitability ratio and Net Contribution % of Ishares S&P 500 Etf are below the industry average.
• 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 Ishares S&P 500 Etf
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Ishares S&P 500 Etf is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Ishares S&P 500 Etf – External Strategic Factors

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• 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 Ishares S&P 500 Etf in other product categories.
• The new technology provides an opportunity to Ishares S&P 500 Etf 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.
• 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.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Ishares S&P 500 Etf’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 Ishares S&P 500 Etf . 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 Ishares S&P 500 Etf.
• The market development will lead to dilution of competitor’s advantage and enable Ishares S&P 500 Etf 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 Ishares S&P 500 Etf to increase its profitability.

Threats Ishares S&P 500 Etf 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.
• Liability laws in different countries are different and Ishares S&P 500 Etf 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 Ishares S&P 500 Etf   in those markets.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• 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.
• No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
• 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 Ishares S&P 500 Etf

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 Ishares S&P 500 Etf
• 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 Ishares S&P 500 Etf

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 Ishares S&P 500 Etf 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 Ishares S&P 500 Etf

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)