ServisFirst Bancshares, Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The ServisFirst Bancshares, Inc. is one of the leading organizatations in its industry. ServisFirst Bancshares, Inc. 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 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 enables the managers of the ServisFirst Bancshares, 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 firm can use to exploit external opportunities, counter threats, and build on & protect ServisFirst Bancshares, Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to ServisFirst Bancshares, Inc. SWOT Analysis

Strengths of ServisFirst Bancshares, Inc. – Internal Strategic Factors

As one of the leading firms in its industry, ServisFirst Bancshares, Inc. has numerous strengths that help 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 ServisFirst Bancshares, Inc. are –

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• Good Returns on Capital Expenditure – ServisFirst Bancshares, 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 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.
• 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.
• 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 ServisFirst Bancshares, Inc. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
• Strong Free Cash Flow – ServisFirst Bancshares, Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Highly skilled workforce through successful training and learning programs. ServisFirst Bancshares, 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.

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Weakness of ServisFirst Bancshares, Inc. – Internal Strategic Factors

Weakness are the areas where ServisFirst Bancshares, 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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• High attrition rate in work force – compare to other organizations in the industry ServisFirst Bancshares, Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• The profitability ratio and Net Contribution % of ServisFirst Bancshares, Inc. are below the industry average.
• Investment in Research and Development is below the fastest growing players in the industry. Even though ServisFirst Bancshares, 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.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though ServisFirst Bancshares, Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• 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 ServisFirst Bancshares, Inc.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, ServisFirst Bancshares, 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.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

Opportunities for ServisFirst Bancshares, Inc. – 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 ServisFirst Bancshares, Inc. to capture new customers and increase its market share.
• New trends in the consumer behavior can open up new market for the ServisFirst Bancshares, Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• Government green drive also opens an opportunity for procurement of ServisFirst Bancshares, Inc. products by the state as well as federal government contractors.
• 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 ServisFirst Bancshares, Inc. 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 ServisFirst Bancshares, 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.
• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of ServisFirst Bancshares, 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.
• 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 ServisFirst Bancshares, Inc. to drive home its advantage in new technology and gain market share in the new product category.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as ServisFirst Bancshares, Inc. to increase its profitability.

Threats ServisFirst Bancshares, Inc. Facing - External Strategic Factors

• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of ServisFirst Bancshares, Inc.
• 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.
• 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.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for ServisFirst Bancshares, Inc.   in those markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• Liability laws in different countries are different and ServisFirst Bancshares, Inc. may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for ServisFirst Bancshares, 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 ServisFirst Bancshares, 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 ServisFirst Bancshares, 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 ServisFirst Bancshares, 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 ServisFirst Bancshares, 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)