Grupo Aval Acciones Y Valores S.A. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Grupo Aval Acciones Y Valores S.A. managers to do a situational analysis of the organization . It is an important technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Grupo Aval Acciones Y Valores S.A. is facing in its current business environment.

The Grupo Aval Acciones Y Valores S.A. is one of the leading companies in its industry. Grupo Aval Acciones Y Valores S.A. maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly 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 helps 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 Grupo Aval Acciones Y Valores S.A. 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 an organization can utilize to exploit external opportunities, counter threats, and build on & protect Grupo Aval Acciones Y Valores S.A. strengths, and eradicate its weaknesses.

Step by Step Guide to Grupo Aval Acciones Y Valores S.A. SWOT Analysis

Strengths of Grupo Aval Acciones Y Valores S.A. – Internal Strategic Factors

As one of the leading firms in its industry, Grupo Aval Acciones Y Valores S.A. 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 Grupo Aval Acciones Y Valores S.A. are –

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• Highly successful at Go To Market strategies for its products.
• 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.
• 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 Free Cash Flow – Grupo Aval Acciones Y Valores S.A. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Superb Performance in New Markets – Grupo Aval Acciones Y Valores S.A. 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. Grupo Aval Acciones Y Valores S.A. 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.
• Good Returns on Capital Expenditure – Grupo Aval Acciones Y Valores S.A. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong distribution network – Over the years Grupo Aval Acciones Y Valores S.A. has built a reliable distribution network that can reach majority of its potential market.

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Weakness of Grupo Aval Acciones Y Valores S.A. – Internal Strategic Factors

Weakness are the areas where Grupo Aval Acciones Y Valores S.A. 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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• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Grupo Aval Acciones Y Valores S.A. 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.
• Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
• 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 Grupo Aval Acciones Y Valores S.A. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Limited success outside core business – Even though Grupo Aval Acciones Y Valores S.A. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Grupo Aval Acciones Y Valores S.A. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• High attrition rate in work force – compare to other organizations in the industry Grupo Aval Acciones Y Valores S.A. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for Grupo Aval Acciones Y Valores S.A. – External Strategic Factors

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• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Grupo Aval Acciones Y Valores S.A..
• 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.
• 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 Grupo Aval Acciones Y Valores S.A. to drive home its advantage in new technology and gain market share in the new product category.
• The market development will lead to dilution of competitor’s advantage and enable Grupo Aval Acciones Y Valores S.A. to increase its competitiveness compare to the other competitors.
• Government green drive also opens an opportunity for procurement of Grupo Aval Acciones Y Valores S.A. 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 Grupo Aval Acciones Y Valores S.A.’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 Grupo Aval Acciones Y Valores S.A. 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.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Grupo Aval Acciones Y Valores S.A. to increase its profitability.

Threats Grupo Aval Acciones Y Valores S.A. Facing - External Strategic Factors

• 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.
• New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
• As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards 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.
• 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.
• 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 Grupo Aval Acciones Y Valores S.A. may be exposed to various liability claims given change in policies in those markets.

Limitations of SWOT Analysis for Grupo Aval Acciones Y Valores S.A.

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 Grupo Aval Acciones Y Valores S.A.
• 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 Grupo Aval Acciones Y Valores S.A.

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 Grupo Aval Acciones Y Valores S.A. 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 Grupo Aval Acciones Y Valores S.A.

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)