Core Laboratories N.V. SWOT Analysis / Matrix

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SWOT analysis is a vital strategic planning tool that can be used by Core Laboratories N.V. managers to do a situational analysis of the organization . It is a useful technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Core Laboratories N.V. is facing in its current business environment.

The Core Laboratories N.V. is one of the leading companies in its industry. Core Laboratories N.V. 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 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 Core Laboratories N.V. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Core Laboratories N.V. swot analysis / matrix

SWOT Matrix Strategies Objective

The central purpose of SWOT matrix is to identify the strategies that a company can use to exploit external opportunities, counter threats, and build on & protect Core Laboratories N.V. strengths, and eradicate its weaknesses.

Step by Step Guide to Core Laboratories N.V. SWOT Analysis

Strengths of Core Laboratories N.V. – Internal Strategic Factors

As one of the leading organizations in its industry, Core Laboratories N.V. 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 Core Laboratories N.V. are –

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  • Automation of activities brought consistency of quality to Core Laboratories N.V. products and has enabled the company to scale up and scale down based on the demand conditions in the 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.
  • 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.
  • Strong Free Cash Flow – Core Laboratories N.V. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
  • Superb Performance in New Markets – Core Laboratories N.V. 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.
  • Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
  • Strong distribution network – Over the years Core Laboratories N.V. has built a reliable distribution network that can reach majority of its potential market.
  • Highly successful at Go To Market strategies for its products.

Weakness of Core Laboratories N.V. – Internal Strategic Factors

Weakness are the areas where Core Laboratories N.V. 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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  • 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 Core Laboratories N.V.
  • Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
  • 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.
  • The profitability ratio and Net Contribution % of Core Laboratories N.V. are below the industry average.
  • 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.
  • High attrition rate in work force – compare to other organizations in the industry Core Laboratories N.V. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Limited success outside core business – Even though Core Laboratories N.V. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

Opportunities for Core Laboratories N.V. – External Strategic Factors

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  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Core Laboratories N.V.’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.
  • 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 Core Laboratories N.V. to drive home its advantage in new technology and gain market share in the new product category.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Core Laboratories N.V..
  • The market development will lead to dilution of competitor’s advantage and enable Core Laboratories N.V. to increase its competitiveness compare to the other competitors.
  • 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 Core Laboratories N.V.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Core Laboratories N.V. to capture new customers and increase its market share.
  • Government green drive also opens an opportunity for procurement of Core Laboratories N.V. products by the state as well as federal government contractors.
  • New trends in the consumer behavior can open up new market for the Core Laboratories N.V. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Core Laboratories N.V. Facing - External Strategic Factors

  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • 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.
  • 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.
  • 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.
  • 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 Core Laboratories N.V.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Rising raw material can pose a threat to the Core Laboratories N.V. profitability.

Limitations of SWOT Analysis for Core Laboratories N.V.

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 Core Laboratories N.V.
  • 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 Core Laboratories N.V.

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 Core Laboratories N.V. 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 Core Laboratories N.V.

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)