Elmo Software Limited SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Elmo Software Limited is one of the leading organizatations in its industry. Elmo Software Limited maintains its prominent 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.

Order Now - Elmo Software Limited SWOT Analysis
Check out- Elmo Software 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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Elmo Software Limited to develop four types of strategies:

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

Elmo Software Limited swot analysis / matrix

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 Elmo Software Limited strengths, and eradicate its weaknesses.

Step by Step Guide to Elmo Software Limited SWOT Analysis

Strengths of Elmo Software Limited – Internal Strategic Factors

As one of the leading firms in its industry, Elmo Software 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 Elmo Software Limited are –

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

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.
Good Returns on Capital Expenditure – Elmo Software Limited is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Automation of activities brought consistency of quality to Elmo Software Limited products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Strong Free Cash Flow – Elmo Software Limited has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Superb Performance in New Markets – Elmo Software 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.
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.
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 Elmo Software Limited – Internal Strategic Factors

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

Article continues after advertisement

High attrition rate in work force – compare to other organizations in the industry Elmo Software Limited has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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 Elmo Software Limited is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Elmo Software Limited 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 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.
Investment in Research and Development is below the fastest growing players in the industry. Even though Elmo Software 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.
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 Elmo Software Limited is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Elmo Software Limited – External Strategic Factors

Article continues after advertisement

New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Elmo Software Limited to drive home its advantage in new technology and gain market share in the new product category.
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 Elmo Software 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.
New trends in the consumer behavior can open up new market for the Elmo Software Limited . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Elmo Software Limited 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 Elmo Software Limited to capture new customers and increase its market share.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Elmo Software 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.
The market development will lead to dilution of competitor’s advantage and enable Elmo Software Limited to increase its competitiveness compare to the other competitors.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Elmo Software Limited.

Threats Elmo Software Limited Facing - External Strategic Factors

New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Elmo Software Limited
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
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.
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
Imitation of the counterfeit and low quality product is also a threat to Elmo Software Limited’s product especially in the emerging markets and low income markets.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

Limitations of SWOT Analysis for Elmo Software 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 Elmo Software 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 Elmo Software 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 Elmo Software 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 Elmo Software 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 Elmo Software 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)