Fox Factory Holding Corp SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Fox Factory Holding Corp is one of the leading companies in its industry. Fox Factory Holding Corp maintains its dominant 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.

Order Now - Fox Factory Holding Corp SWOT Analysis
Check out- Fox Factory Holding Corp 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 enables the managers of the Fox Factory Holding Corp to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Fox Factory Holding Corp swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Fox Factory Holding Corp strengths, and eradicate its weaknesses.

Step by Step Guide to Fox Factory Holding Corp SWOT Analysis

Strengths of Fox Factory Holding Corp – Internal Strategic Factors

As one of the leading firms in its industry, Fox Factory Holding Corp 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 Fox Factory Holding Corp are –

Read - Fox Factory Holding Corp Porter 5 Forces Analysis & Industry Analysis
Article continues after advertisement

  • 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.
  • Highly successful at Go To Market strategies for its products.
  • Highly skilled workforce through successful training and learning programs. Fox Factory Holding Corp 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 – Fox Factory Holding Corp is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Strong distribution network – Over the years Fox Factory Holding Corp has built a reliable distribution network that can reach majority of its potential 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.
  • Strong Brand Portfolio – Over the years Fox Factory Holding Corp has invested in building a strong brand portfolio. The SWOT analysis of Fox Factory Holding Corp just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • Strong Free Cash Flow – Fox Factory Holding Corp has strong free cash flows that provide resources in the hand of the company to expand into new projects.

Weakness of Fox Factory Holding Corp – Internal Strategic Factors

Weakness are the areas where Fox Factory Holding Corp 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.

Article continues after advertisement

  • 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 Fox Factory Holding Corp 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.
  • 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.
  • Limited success outside core business – Even though Fox Factory Holding Corp is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
  • 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 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. Fox Factory Holding Corp 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 Fox Factory Holding Corp 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 Fox Factory Holding Corp – 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 Fox Factory Holding Corp to drive home its advantage in new technology and gain market share in the new product category.
  • 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 Fox Factory Holding Corp in other product categories.
  • The market development will lead to dilution of competitor’s advantage and enable Fox Factory Holding Corp to increase its competitiveness compare to the other competitors.
  • The new technology provides an opportunity to Fox Factory Holding Corp 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 trends in the consumer behavior can open up new market for the Fox Factory Holding Corp . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • 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.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Fox Factory Holding Corp’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.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Fox Factory Holding Corp to capture new customers and increase its market share.

Threats Fox Factory Holding Corp Facing - External Strategic Factors

  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • 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.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Fox Factory Holding Corp
  • 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.
  • New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.

Limitations of SWOT Analysis for Fox Factory Holding Corp

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 Fox Factory Holding Corp
  • 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 Fox Factory Holding Corp

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 Fox Factory Holding Corp 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 Fox Factory Holding Corp

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 Fox Factory Holding Corp

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)