Swot Analysis Description
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Abstract
Strength, Weakness, Opportunity and Threat (SWOT) exist in all business environments regardless of the nature of the business. Each has distinct factors based on the type of service or product offered. XYZ Construction is no exception when compared to their market niche, whether it is in the domestic or foreign environment. When it comes to the separation of foreign and domestic then there are actually two sets of SWOT factors to consider; almost to the point of treating them as separate entities within the same company. A good example would be Pepsi Cola. Pepsi exists in the domestic market with a main headquarters that run manufacturing, processing, bottling and human resources within North America. The other is their international markets which have a hubs of some sort running operations within foreign countries, each with manufacturing, processing, bottling and human resources for those specific geographical locations. Although there can only be one CEO over the entire company, there has to be in place upper management positions in the other locations as well to manage the day to day issues within that specific area that deal with the course of business for the benefit of the company. Conducting a SWOT analysis based on known factors can establish a baseline that will assist in the initial overall assessment of the company as it relates to future organizational and IPO planning.
The desired objective of the XYZ Construction Company is to expand domestic operations and diversify into other building markets such as domestic residential and commercial business. Since XYZ is established domestically within the construction field, the idea of expansion here is very valid and plausible since the organization is already acclimated and associated with conducting business domestically.
In next desired objective is to expand internationally and compete globally for international contracts within the construction field. This may or may not prove to be a dilemma based on factors that will be brought forth later in this research document.
Much of these proposed objectives hinge on whether XYZ can convince investors and / or proposed investors to buy into the plan once all the groundwork is completed and an IPO is established. Although XYZ has proven that it is successful and profitable domestically and has the ability for self-sufficiency on the current scale, it will need investor backing to promote larger domestic activities, with the main investor objective of the proposed international business.
Whether operations center around whether XYZ will continue and concentrate their efforts in the domestic market and/or also attempt to venture into the international market, strategic plans will have to be formulated and implemented to achieve either or both goals. According to Zhao, Shen & Zuo (2009), contractors are keen to understand the advantages and weaknesses so that effective business strategies can be adopted in order to maintain their competitive positions.
The following SWOT analysis can be used by management to develop a strategic plan for present and future endeavors with relation to the impending IPO investments. According to
Shinno, Yoshioka, Marpaung & Hachiga, this is an important foundation for formulation of a successful strategy (2006).
Strengths
Domestic operations involving the availability of a trained workforce and a proven operational management team are the backbone of XYZ. Having been a family based business for many years; XYZ has utilized their management system by placing experienced and trained employees in the proper supervisory positions along with a well-trained workforce. Domestically XYZ has expanded into other geographic areas throughout the United States and into other markets including residential and other commercial ventures. With their ability to set up shop and compete in these other locations, XYZ has proven they are a well sought after Construction Company that produces a great product and provides a quality service. By providing services in other locations they have a large pool of trained and experienced personnel that can be utilized anywhere on any jobsite in the country. This is beneficial for the simple fact that should any problem or issue arise they have folks in place to solve most any construction issue that may arise anywhere where XYZ does business. Lu, Li, Shen & Huang, as common sense in construction, the two factors of labor and materials, in total constitute the largest proportion of cost for most construction projects (2009).
Another strength XYZ possesses is that of organizational structure. This structure began and is currently run by family. It began small and has blossomed out into modern day organization that has a chain of command structure that is top down and consists of an executive management
structure with supervisory management at the headquarters level all the way to offices throughout their geographical business locations. Workers answer to job foremen who answer to
construction superintendents who answer to regional managers who answer to executive management. Without some type of structure, the organization could not and would not exist; it would be in utter chaos and would be unable to function. XYZ is not on of those fly by night outfits, it has proven itself time and time again. XYZ executives realize that the company can expand to other domestic markets and states with the influx of additional capital. According to Puiu, Stanciu & Sirbu, strategic planning and marketing opportunities are part of numerous elements that must be taken into account in order to make the activity of the enterprise profitable (2009).
Within the scope of organizational structure I would have to mention leadership. Without proper leadership, no group can function nor complete an assignment. All forms of instruction and cease and what is left are nothing short of mass confusion. Leadership at XYZ has not changed since its inception and will continue to remain as is for the considerable future. XYZ has amassed a professional and skilled leadership team that is second to none within the domestic construction field. It was self started and self led during the early history of the company and that business model has remained and only grown larger with the same central theme producing management that follow the lead of the founder. To break away from or change something that works would be detrimental to the future of the company and any manager or executive at XYZ realizes that any change has to be positive and built on the business model.
Weaknesses