Avacta Group Plc SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a strategic planning tool that can be used by Avacta Group Plc managers to do a situational analysis of the firm . It is a useful technique to evalauate the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Avacta Group Plc is facing in its current business environment.

The Avacta Group Plc is one of the leading companies in its industry. Avacta Group Plc maintains its prominent 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 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 helps the managers of the Avacta Group Plc 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 central purpose of SWOT matrix is to identify the strategies that a firm can use to exploit external opportunities, counter threats, and build on & protect Avacta Group Plc strengths, and eradicate its weaknesses.

Step by Step Guide to Avacta Group Plc SWOT Analysis

Strengths of Avacta Group Plc – Internal Strategic Factors

As one of the leading organizations in its industry, Avacta Group Plc 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 Avacta Group Plc are –

Read - Avacta Group Plc Porter 5 Forces Analysis & Industry Analysis
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Highly successful at Go To Market strategies for its products.
Strong distribution network – Over the years Avacta Group Plc has built a reliable distribution network that can reach majority of its potential market.
Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
Successful track record of developing new products – product innovation.
Good Returns on Capital Expenditure – Avacta Group Plc is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
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.
Superb Performance in New Markets – Avacta Group Plc has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
Highly skilled workforce through successful training and learning programs. Avacta Group Plc 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 Avacta Group Plc – Internal Strategic Factors

Weakness are the areas where Avacta Group Plc 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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Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Avacta Group Plc 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.
High attrition rate in work force – compare to other organizations in the industry Avacta Group Plc has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
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 Avacta Group Plc is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
The profitability ratio and Net Contribution % of Avacta Group Plc are below the industry average.
Limited success outside core business – Even though Avacta Group Plc is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
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. Avacta Group Plc has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

Opportunities for Avacta Group Plc – External Strategic Factors

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Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Avacta Group Plc an opportunity to enter a new emerging market.
New trends in the consumer behavior can open up new market for the Avacta Group Plc . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
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 Avacta Group Plc. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Avacta Group Plc.
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.
Government green drive also opens an opportunity for procurement of Avacta Group Plc products by the state as well as federal government contractors.
Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Avacta Group Plc’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 market development will lead to dilution of competitor’s advantage and enable Avacta Group Plc to increase its competitiveness compare to the other competitors.

Threats Avacta Group Plc Facing - External Strategic Factors

New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
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 Avacta Group Plc
New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
Liability laws in different countries are different and Avacta Group Plc may be exposed to various liability claims given change in policies in those markets.
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.
Imitation of the counterfeit and low quality product is also a threat to Avacta Group Plc’s product especially in the emerging markets and low income markets.

Limitations of SWOT Analysis for Avacta Group Plc

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 Avacta Group Plc
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 Avacta Group Plc

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 Avacta Group Plc 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 Avacta Group Plc

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)