Lydall, Inc. SWOT Analysis / Matrix

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

The Lydall, Inc. is one of the leading firms in its industry. Lydall, Inc. maintains its dominant position in market by carefully analyzing and reviewing the SWOT analysis. SWOT analysis a highly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework helps 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 Lydall, Inc. 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 use to exploit external opportunities, counter threats, and build on & protect Lydall, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Lydall, Inc. SWOT Analysis

Strengths of Lydall, Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Lydall, Inc. 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 Lydall, Inc. are –

Read - Lydall, Inc. Porter 5 Forces Analysis & Industry Analysis
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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.
Automation of activities brought consistency of quality to Lydall, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Highly successful at Go To Market strategies for its products.
Strong Brand Portfolio – Over the years Lydall, Inc. has invested in building a strong brand portfolio. The SWOT analysis of Lydall, Inc. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
Good Returns on Capital Expenditure – Lydall, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
Successful track record of developing new products – product innovation.
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.
Highly skilled workforce through successful training and learning programs. Lydall, Inc. 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.

Weakness of Lydall, Inc. – Internal Strategic Factors

Weakness are the areas where Lydall, Inc. 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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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 Lydall, Inc. are below the industry average.
Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Lydall, Inc. 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.
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.
Investment in Research and Development is below the fastest growing players in the industry. Even though Lydall, Inc. 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.
Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though Lydall, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Lydall, Inc. – External Strategic Factors

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The new technology provides an opportunity to Lydall, Inc. 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 environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Lydall, Inc. to drive home its advantage in new technology and gain market share in the new product category.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Lydall, Inc.’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 Lydall, Inc. to capture new customers and increase its market share.
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 Lydall, Inc.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Lydall, Inc. an opportunity to enter a new emerging market.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Lydall, Inc..
The market development will lead to dilution of competitor’s advantage and enable Lydall, Inc. to increase its competitiveness compare to the other competitors.

Threats Lydall, Inc. 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.
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 Lydall, Inc.’s product especially in the emerging markets and low income markets.
Liability laws in different countries are different and Lydall, Inc. may be exposed to various liability claims given change in policies in those markets.
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 Lydall, Inc.
Rising raw material can pose a threat to the Lydall, Inc. profitability.

Limitations of SWOT Analysis for Lydall, Inc.

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 Lydall, Inc.
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 Lydall, Inc.

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 Lydall, Inc. 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 Lydall, Inc.

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)