Question

Need assistance with Telus's dupont and swot analysis please!

Answer 1

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

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 known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix enables the managers of the DuPont to develop four types of strategies:

SO (strengths-opportunities) Strategies

WO (weaknesses-opportunities) Strategies

ST (strengths-threats) Strategies

WT (weaknesses-threats) Strategies

Strengths of DuPont – Internal Strategic Factors

1=DuPont 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.some of the strengths of DuPont are –

2=Good Returns on Capital Expenditure – DuPont is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

3=Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.

4=Automation of activities brought consistency of quality to DuPont products and has enabled the company to scale up and scale down based on the demand conditions in the market.

5=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.

6=Highly skilled workforce through successful training and learning programs. DuPont 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.

7=Strong Brand Portfolio – Over the years DuPont has invested in building a strong brand portfolio. The SWOT analysis of DuPont just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.

8=Strong distribution network – Over the years DuPont has built a reliable distribution network that can reach majority of its potential market.

9=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.

Weakness of DuPont – Internal Strategic Factors

1=Weakness are the areas where DuPont 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.

2=Not highly successful at integrating firms with different work culture. As mentioned earlier even though DuPont is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

3=Limited success outside core business – Even though DuPont is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.

4=Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.

5=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. DuPont has to build internal feedback mechanism directly from sales team on ground to counter these challenges.

6=Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, DuPont 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.

7=Investment in Research and Development is below the fastest growing players in the industry. Even though DuPont 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.

8=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.

Opportunities for DuPont – External Strategic Factors

1 =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 DuPont to drive home its advantage in new technology and gain market share in the new product category.

2 =Decreasing cost of transportation because of lower shipping prices can also bring down the cost of DuPont’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.

3=Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of DuPont.

4=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 DuPont in other product categories.

5=The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as DuPont to increase its profitability.

6=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.

7=The new technology provides an opportunity to DuPont 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.

8=Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided DuPont an opportunity to enter a new emerging market.

Threats DuPont Facing - External Strategic Factors

1=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.

2=Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.

3=New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.

4=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.

5=Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for DuPont in those markets.

6=Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.

7=Rising raw material can pose a threat to the DuPont profitability.

8=New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .

Limitations of SWOT Analysis for DuPont

1=Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

2=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.

3=SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.

4=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 DuPont

5=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.

6=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.

Weighted SWOT Analysis of DuPont

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 DuPont 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 critically.