Deckers Outdoor Corporation SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Deckers Outdoor Corporation managers to do a situational analysis of the firm . It is a handy technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Deckers Outdoor Corporation is facing in its current business environment.

The Deckers Outdoor Corporation is one of the leading companies in its industry. Deckers Outdoor Corporation 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 organization such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework facilitates 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 Deckers Outdoor Corporation to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Deckers Outdoor Corporation swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Deckers Outdoor Corporation strengths, and eradicate its weaknesses.

Step by Step Guide to Deckers Outdoor Corporation SWOT Analysis

Strengths of Deckers Outdoor Corporation – Internal Strategic Factors

As one of the leading companies in its industry, Deckers Outdoor Corporation 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 Deckers Outdoor Corporation are –

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  • Good Returns on Capital Expenditure – Deckers Outdoor Corporation is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Strong Free Cash Flow – Deckers Outdoor Corporation has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • 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 Deckers Outdoor Corporation has invested in building a strong brand portfolio. The SWOT analysis of Deckers Outdoor Corporation just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Automation of activities brought consistency of quality to Deckers Outdoor Corporation products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • 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.
  • Highly skilled workforce through successful training and learning programs. Deckers Outdoor Corporation 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.
  • 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.

Weakness of Deckers Outdoor Corporation – Internal Strategic Factors

Weakness are the areas where Deckers Outdoor Corporation 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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  • Investment in Research and Development is below the fastest growing players in the industry. Even though Deckers Outdoor Corporation 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.
  • The profitability ratio and Net Contribution % of Deckers Outdoor Corporation are below the industry average.
  • 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. Deckers Outdoor Corporation has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • 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.
  • High attrition rate in work force – compare to other organizations in the industry Deckers Outdoor Corporation 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.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for Deckers Outdoor Corporation – External Strategic Factors

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  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Deckers Outdoor Corporation 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 Deckers Outdoor Corporation to increase its profitability.
  • 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 Deckers Outdoor Corporation in other product categories.
  • The new technology provides an opportunity to Deckers Outdoor Corporation 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.
  • The market development will lead to dilution of competitor’s advantage and enable Deckers Outdoor Corporation to increase its competitiveness compare to the other competitors.
  • New trends in the consumer behavior can open up new market for the Deckers Outdoor Corporation . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • 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 Deckers Outdoor Corporation to drive home its advantage in new technology and gain market share in the new product category.
  • Government green drive also opens an opportunity for procurement of Deckers Outdoor Corporation products by the state as well as federal government contractors.

Threats Deckers Outdoor Corporation Facing - External Strategic Factors

  • 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.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Deckers Outdoor Corporation
  • 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.
  • 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.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Deckers Outdoor Corporation   in those markets.
  • Rising raw material can pose a threat to the Deckers Outdoor Corporation profitability.

Limitations of SWOT Analysis for Deckers Outdoor Corporation

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 Deckers Outdoor Corporation
  • 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 Deckers Outdoor Corporation

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 Deckers Outdoor Corporation 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 Deckers Outdoor Corporation

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)