CSI Compressco LP SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The CSI Compressco LP is one of the leading companies in its industry. CSI Compressco LP 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.

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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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the CSI Compressco LP to develop four types of strategies:

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

CSI Compressco LP swot analysis / matrix

SWOT Matrix Strategies Objective

The main purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect CSI Compressco LP strengths, and eradicate its weaknesses.

Step by Step Guide to CSI Compressco LP SWOT Analysis

Strengths of CSI Compressco LP – Internal Strategic Factors

As one of the leading firms in its industry, CSI Compressco LP 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 CSI Compressco LP are –

Read - CSI Compressco LP Porter 5 Forces Analysis & Industry Analysis
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Strong distribution network – Over the years CSI Compressco LP has built a reliable distribution network that can reach majority of its potential market.
Highly skilled workforce through successful training and learning programs. CSI Compressco LP 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.
Strong Brand Portfolio – Over the years CSI Compressco LP has invested in building a strong brand portfolio. The SWOT analysis of CSI Compressco LP just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
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.
Automation of activities brought consistency of quality to CSI Compressco LP products and has enabled the company to scale up and scale down based on the demand conditions in the market.
Strong Free Cash Flow – CSI Compressco LP has strong free cash flows that provide resources in the hand of the company to expand into new projects.
Good Returns on Capital Expenditure – CSI Compressco LP 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.

Weakness of CSI Compressco LP – Internal Strategic Factors

Weakness are the areas where CSI Compressco LP can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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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.
Not highly successful at integrating firms with different work culture. As mentioned earlier even though CSI Compressco LP is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
Limited success outside core business – Even though CSI Compressco LP 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.
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 CSI Compressco LP is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
The profitability ratio and Net Contribution % of CSI Compressco LP 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. CSI Compressco LP has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for CSI Compressco LP – 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 CSI Compressco LP to capture new customers and increase its market share.
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.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of CSI Compressco LP.
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 CSI Compressco LP 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 CSI Compressco LP in other product categories.
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 CSI Compressco LP. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of CSI Compressco LP’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 new technology provides an opportunity to CSI Compressco LP 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.

Threats CSI Compressco LP Facing - External Strategic Factors

The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of CSI Compressco LP
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.
Imitation of the counterfeit and low quality product is also a threat to CSI Compressco LP’s product especially in the emerging markets and low income markets.
Liability laws in different countries are different and CSI Compressco LP may be exposed to various liability claims given change in policies in those markets.
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.

Limitations of SWOT Analysis for CSI Compressco LP

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 CSI Compressco LP
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 CSI Compressco LP

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 CSI Compressco LP 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 CSI Compressco LP

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)