Spectrum Brands Holdings, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Spectrum Brands Holdings, Inc. is one of the leading organizatations in its industry. Spectrum Brands Holdings, Inc. maintains its prominent 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 firm 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Spectrum Brands Holdings, 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 main purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Spectrum Brands Holdings, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Spectrum Brands Holdings, Inc. SWOT Analysis

Strengths of Spectrum Brands Holdings, Inc. – Internal Strategic Factors

As one of the leading companies in its industry, Spectrum Brands Holdings, 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 Spectrum Brands Holdings, Inc. are –

Read - Spectrum Brands Holdings, Inc. 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.
• 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.
• Good Returns on Capital Expenditure – Spectrum Brands Holdings, Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Automation of activities brought consistency of quality to Spectrum Brands Holdings, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Successful track record of developing new products – product innovation.
• Strong distribution network – Over the years Spectrum Brands Holdings, Inc. has built a reliable distribution network that can reach majority of its potential market.
• 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.
• 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.

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Weakness of Spectrum Brands Holdings, Inc. – Internal Strategic Factors

Weakness are the areas where Spectrum Brands Holdings, Inc. 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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• 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 Spectrum Brands Holdings, Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• 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. Spectrum Brands Holdings, Inc. has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
• 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 Spectrum Brands Holdings, Inc.
• Limited success outside core business – Even though Spectrum Brands Holdings, Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• The profitability ratio and Net Contribution % of Spectrum Brands Holdings, 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, Spectrum Brands Holdings, 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.

Opportunities for Spectrum Brands Holdings, Inc. – External Strategic Factors

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• New trends in the consumer behavior can open up new market for the Spectrum Brands Holdings, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Spectrum Brands Holdings, Inc. to increase its profitability.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Spectrum Brands Holdings, Inc. an opportunity to enter a new emerging market.
• 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.
• The new technology provides an opportunity to Spectrum Brands Holdings, 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 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 Spectrum Brands Holdings, 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.
• 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 Spectrum Brands Holdings, Inc. in other product categories.
• The market development will lead to dilution of competitor’s advantage and enable Spectrum Brands Holdings, Inc. to increase its competitiveness compare to the other competitors.

Threats Spectrum Brands Holdings, Inc. Facing - External Strategic Factors

• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Spectrum Brands Holdings, Inc.
• Imitation of the counterfeit and low quality product is also a threat to Spectrum Brands Holdings, Inc.’s product especially in the emerging markets and low income markets.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Spectrum Brands Holdings, Inc.   in those markets.
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• 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.
• Liability laws in different countries are different and Spectrum Brands Holdings, Inc. may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Spectrum Brands Holdings, 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 Spectrum Brands Holdings, 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 Spectrum Brands Holdings, 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 Spectrum Brands Holdings, 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 Spectrum Brands Holdings, 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)