Ishares S&P Small-Cap Etf SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Ishares S&P Small-Cap Etf 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) Ishares S&P Small-Cap Etf is facing in its current business environment.

The Ishares S&P Small-Cap Etf is one of the leading organizatations in its industry. Ishares S&P Small-Cap Etf maintains its prominent 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.


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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 enables the managers of the Ishares S&P Small-Cap 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 main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Ishares S&P Small-Cap Etf strengths, and eradicate its weaknesses.

Step by Step Guide to Ishares S&P Small-Cap Etf SWOT Analysis

Strengths of Ishares S&P Small-Cap Etf – Internal Strategic Factors

As one of the leading companies in its industry, Ishares S&P Small-Cap Etf 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 Ishares S&P Small-Cap Etf are –

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• 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 distribution network – Over the years Ishares S&P Small-Cap 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.
• 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.
• Successful track record of developing new products – product innovation.
• Highly skilled workforce through successful training and learning programs. Ishares S&P Small-Cap Etf 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 – Ishares S&P Small-Cap Etf is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Free Cash Flow – Ishares S&P Small-Cap Etf has strong free cash flows that provide resources in the hand of the company to expand into new projects.

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Weakness of Ishares S&P Small-Cap Etf – Internal Strategic Factors

Weakness are the areas where Ishares S&P Small-Cap Etf 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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• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Ishares S&P Small-Cap 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.
• 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 Small-Cap Etf is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• The profitability ratio and Net Contribution % of Ishares S&P Small-Cap Etf are below the industry average.
• Limited success outside core business – Even though Ishares S&P Small-Cap Etf is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• High attrition rate in work force – compare to other organizations in the industry Ishares S&P Small-Cap Etf 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.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Ishares S&P Small-Cap 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 Small-Cap Etf – External Strategic Factors

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• 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 Ishares S&P Small-Cap Etf. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
• 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 taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Ishares S&P Small-Cap Etf to increase its profitability.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Ishares S&P Small-Cap Etf to capture new customers and increase its market share.
• Government green drive also opens an opportunity for procurement of Ishares S&P Small-Cap Etf products by the state as well as federal government contractors.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Ishares S&P Small-Cap 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.
• 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 Small-Cap Etf.
• The market development will lead to dilution of competitor’s advantage and enable Ishares S&P Small-Cap Etf to increase its competitiveness compare to the other competitors.

Threats Ishares S&P Small-Cap Etf Facing - External Strategic Factors

• 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.
• Liability laws in different countries are different and Ishares S&P Small-Cap Etf may be exposed to various liability claims given change in policies in those markets.
• 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.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
• 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Ishares S&P Small-Cap Etf   in those markets.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

Limitations of SWOT Analysis for Ishares S&P Small-Cap 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 Small-Cap 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 Small-Cap 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 Small-Cap 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 Small-Cap 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)