Trade Me Group Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Trade Me Group 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) Trade Me Group Limited is facing in its current business environment.

The Trade Me Group Limited is one of the leading organizatations in its industry. Trade Me Group 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the Trade Me Group 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 core purpose of SWOT matrix is to identify the strategies that a firm can utilize to exploit external opportunities, counter threats, and build on & protect Trade Me Group Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Trade Me Group Limited SWOT Analysis

Strengths of Trade Me Group Limited – Internal Strategic Factors

As one of the leading organizations in its industry, Trade Me Group Limited 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 Trade Me Group Limited are –

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• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• 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.
• Automation of activities brought consistency of quality to Trade Me Group Limited products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Strong Brand Portfolio – Over the years Trade Me Group Limited has invested in building a strong brand portfolio. The SWOT analysis of Trade Me Group Limited just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• Strong distribution network – Over the years Trade Me Group Limited has built a reliable distribution network that can reach majority of its potential market.
• Highly successful at Go To Market strategies for its products.
• Highly skilled workforce through successful training and learning programs. Trade Me Group 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.

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Weakness of Trade Me Group Limited – Internal Strategic Factors

Weakness are the areas where Trade Me Group 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.

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• 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 Trade Me Group Limited
• 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.
• High attrition rate in work force – compare to other organizations in the industry Trade Me Group Limited 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 Trade Me Group 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.
• 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 Trade Me Group Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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.
• The profitability ratio and Net Contribution % of Trade Me Group Limited are below the industry average.

Opportunities for Trade Me Group Limited – 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.
• 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 Trade Me Group Limited in other product categories.
• New trends in the consumer behavior can open up new market for the Trade Me Group Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• The market development will lead to dilution of competitor’s advantage and enable Trade Me Group Limited to increase its competitiveness compare to the other competitors.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Trade Me Group Limited 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 Trade Me Group Limited 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 Trade Me Group 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 Trade Me Group 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.

Threats Trade Me Group Limited Facing - External Strategic Factors

• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards 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.
• 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.
• Rising raw material can pose a threat to the Trade Me Group Limited profitability.
• 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 Trade Me Group Limited may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Trade Me Group 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 Trade Me Group 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 Trade Me Group 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 Trade Me Group 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 Trade Me Group 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

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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)