K2 Energy Limited. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by K2 Energy 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) K2 Energy Limited. is facing in its current business environment.

The K2 Energy Limited. is one of the leading firms in its industry. K2 Energy Limited. 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 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 K2 Energy 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 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 K2 Energy Limited. strengths, and eradicate its weaknesses.

Step by Step Guide to K2 Energy Limited. SWOT Analysis

Strengths of K2 Energy Limited. – Internal Strategic Factors

As one of the leading companies in its industry, K2 Energy 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 K2 Energy Limited. are –

Read - K2 Energy Limited. Porter 5 Forces Analysis & Industry Analysis
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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.
• Highly successful at Go To Market strategies for its products.
• 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.
• Strong distribution network – Over the years K2 Energy Limited. has built a reliable distribution network that can reach majority of its potential market.
• Strong Free Cash Flow – K2 Energy Limited. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Automation of activities brought consistency of quality to K2 Energy Limited. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Good Returns on Capital Expenditure – K2 Energy Limited. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

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Weakness of K2 Energy Limited. – Internal Strategic Factors

Weakness are the areas where K2 Energy 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.

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• 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 K2 Energy Limited. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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.
• 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 K2 Energy Limited.
• 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.
• 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. K2 Energy Limited. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• High attrition rate in work force – compare to other organizations in the industry K2 Energy Limited. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for K2 Energy Limited. – External Strategic Factors

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• The new technology provides an opportunity to K2 Energy Limited. 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.
• 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 K2 Energy 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 environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for K2 Energy Limited. to drive home its advantage in new technology and gain market share in the new product category.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for K2 Energy Limited. to capture new customers and increase its market share.
• 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 K2 Energy Limited. in other product categories.
• Government green drive also opens an opportunity for procurement of K2 Energy Limited. products by the state as well as federal government contractors.
• The market development will lead to dilution of competitor’s advantage and enable K2 Energy Limited. 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 K2 Energy Limited. to increase its profitability.

Threats K2 Energy Limited. 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.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of K2 Energy Limited.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for K2 Energy Limited.   in those markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Rising raw material can pose a threat to the K2 Energy Limited. profitability.
• Imitation of the counterfeit and low quality product is also a threat to K2 Energy Limited.’s product especially in the emerging markets and low income markets.
• Liability laws in different countries are different and K2 Energy Limited. may be exposed to various liability claims given change in policies in those markets.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for K2 Energy 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 K2 Energy 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 K2 Energy 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 K2 Energy 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 K2 Energy 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)