Analysis strength and weakness for 3 pages
3.3.3.Strategic Fit (SWOT) Analysis (3-6 pages): This section explains the link between Strategic Challenges (O&T) and the organizational competencies (S&W).
o You need to provide a “SWOT summary table” (in the appendix) that recaps the strengths, weaknesses, opportunities, and threats.
SWOT Summary Table
A. List of Opportunities (external)
B. List of Threats (external)
C. List of Strengths (internal)
D. List of Weaknesses (internal)
4
o After strengths and weaknesses are matched with opportunities and threats, strategic directions emerge at their intersections. You need to identify 4-5 such strategic directions. The following matrix describes the 4 types of matching with related questions which may help you identify the strategic directions. Needless to say, not all internal and external factors may match well with each other. Therefore, you need to only focus on the meaningful, relevant, and significant fits.
o You need to provide the “SWOT Matrix Table” (in the appendix) that recaps 4-5 strategic directions.
SWOT Matrix Table: Strategic Directions
A. List of Strengths (internal)
B. List of Weaknesses (internal)
1 – S/O Match Strategic Recommendations
- Obvious attractive options
- Likely to produce greatest ROI (Return On
Investment) - Likely to be quickest to implement and
easiest to justify immediate action- planning or feasibility study
– Executive question: “If we are not already looking at these areas and prioritizing them, then why not?”
2 – W/O Match Strategic Recommendations
- Potentially attractive options
- Likely to produce good returns if capability
and implementation are viable - Potentially exciting and rewarding due to
change, challenge, surprise tactics, and benefits from achieving improvements
– Executive questions: “What’s actually stopping us from taking advantage of these opportunities?”
3 – S/T Match Strategic Recommendations
- Easy to defend and counter
- Only basic awareness, planning, and
implementation required to meet these
challenges - Investment in these issues is generally
safe and necessary
– Executive question: “Since we are strong here, can any of these threats be turned into opportunities?”
4 – W/T Match Strategic Recommendations
- Potentially high risk
- Where risk is low , we must ignore these
issues and not be distracted by them - Where risk is high we must assess capability
gaps and plan to defend/avert in very specific controlled ways
– Executive question: “Where the risks of these threats are high, do we have specific improvement plans for related weaknesses to minimize the risk of those threats?”
SWOT Summary Table
SWOT Summary Table
A. Opportunities (External)
· Development of Niche Markets
· Supply Chain Network Improvement
· Internal Training of Knowledge Workers
B. Threats (External)
· Import/Export Taxes and Tariffs
· Environmental Impact of Products
· Fluctuation of Market due to Pandemic
C. Strengths (Internal)
· Financial Strength
· Additional Revenue Avenues
· Powerful Marketing and Distribution Network
D. Weaknesses (Internal)
· Outdated Production Technology
· Lack of Internal Expansion
· Innovation in Product Development
SWOT Matrix Table: Strategic Directions
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SWOT Matrix Table: Strategic Directions |
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A. Strengths (Internal)
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B. Weaknesses (Internal) |
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C. Opportunities (External) |
1 – S/O Match Strategic Recommendations
Enter niche Markets for the Development of specific product categories and segments within the HVAC industry. Example: · Solar direct-expansion A/C · Liquid-desiccant dehumidification
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2 – W/O Match Strategic Recommendations
Designing Individual water purification system and offer them as a service solution to the industrial sector. Example: · Elite Plus Osmosis (Suez Technologies) · RO Water Purifier ( Kent )
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D. Threats (External) |
3 – S/T Match Strategic Recommendations
Differentiate existing product line-up to match customer expectations and ensure success with changing customer needs and preferences over time. · Green Product Development (construction, plumbing solutions) |
4 – W/T Match Strategic Recommendations
Acquiring smaller organization that are focused more on green energy, clean-waste solutions in order to attract new customers and retain older ones. · Clean Management (focus on industrial waste management and environmental clean-up)
· Industrial Service focus, such as Covid-19 Decontamination Services and Line Jetting |
5.2. Core Competencies: Strengths and Weaknesses
Comfort Systems USA has multiple strengths that helps them become successful in the marketplace. One strength that they provide is a strong cash flow and revenue that allows the company to expand itself to new projects. An internal strength relative to Comfort Systems can be credited to its strong financial condition and ample resources to expand business (Gamble 72). Comfort Systems has been able to consistently increase revenue in recent years based on successful company acquisitions such as Walker TX Holding company in 2019, which helped increase revenue on the year from $432.4 million to $4.2 billion (Marketline 2020). Successful acquisitions like this can help propel revenue in specific segments of business, whether that be mechanical, electrical, or others. The company also demonstrated strong increases in their electrical segment in the past year, growing from $75.3 million to $2.3 billion, in which $53.6 million of that increase was attributed to an Indiana acquisition (Marketline 2020). With the company expanding, they are in high demand of new employee that plays in their favor since they invest the development and training of new and present employees that will be able to provide a high skill set of motivation. (Comfort Systems USA) The company prides itself on the strength of the people in the field, and consistently continues to train everyone from superintendents, service operators, and most importantly, project managers (D.W.A. 2005). With a heavy focus on training and experienced senior level employees, Comfort Systems is able to separate its staff from inexperienced, less qualified competition. This helps to narrow the learning curve and can give a great competitive advantage over rivals in the space (Gamble 72).
When it comes to marketing, a company must know how to attract a wide range of audience to bring in potential clients. Comfort Systems has been able to build a distribution of networks that has reached some of its market. Since their expansion, it has helped them construct new revenue and lower the economic cycle risk that the market operates in.
Lastly, Comfort Systems USA has been constructing new revenue which has been successful by generating good returns on capital. The good return on capital primarily means that Comfort System is using their finances to generate return and if it’s being used efficiently. Their customer services also show their customer and any potential customers that they are working off a good brand.
Weaknesses
Comfort Systems USA has same outdated technologies that would be a considerable idea to invest on. Considering the expansion growth with other competitors since they are challenging the company trees capital investment, Comfort Systems USA will need to financially invest in technology and their process to better the companies’ vision. (Comfort Systems USA) Compared to their competitors, they also have a higher attrition rate which causes them more time developing and training their employees.
The next internal weakness to touch upon for Comfort Systems is their lack of international expansion, which further increases the intensity of competition among industry rivals in this space (Gamble 72). When looking at competitors like Emcor Group, one competitive edge that they hold over Comfort Systems is their entry into the international market. The company operates part of their business through subsidiaries located in the United Kingdom. By expanding into the foreign market, Emcor adds to their repertoire of locations and services, which can allow them to grow on a global scale. Emcor currently has over 30,000 employees working at over 80 companies in 170 locations (Emcorgroup.com). Conversely, Comfort Systems USA has over 35 companies in operation in over 140 locations strictly across U.S grounds (Comfort Systems USA). Without an international presence and sole reliance on a national market, Comfort Systems growth, profit margins, innovation can be severely limited.
Lastly, although Comfort System USA is top of their organization, they do face challenges. When it comes to adopting/moving product segment along with the present culture. Since they are having a difficult time, they seem to have missed a small quantity of market shares. (Comfort Systems USA) One way to tackle this weakness could be by building an internal feedback from the sales team.
Strategic Analysis
Internal
Strengths: enhance; build
Weakness: reduce; resolve
External
Opportunities: expand; exploit
Threat: thwart; avoid
Additional Works Cited:
MarketLine Company Profile: Comfort Systems USA Inc. (2020). Comfort Systems USA, Inc. MarketLine Company Profile, 1–23.
D. W. A. (2005). Comfort Systems USA, Inc. (FIX). Wall Street Transcript, 170(12), 1.
Emcorgroup.com. (n.d.). Retrieved November 05, 2020, from
https://emcorgroup.com/our-locations
Company Profile. (2020, September 1). Comfort Systems USA.
Strategic Management Department. (2020). Comfort Systems USA, Inc. SWOT Analysis Matrix (Strengths, Weakness, Opportunities, Threats). Fern Fort University. http://fernfortuniversity.com/term-papers/swot/nyse/2321-comfort-systems-usa–inc-.php
Department, Strategic Management. “Comfort Systems USA, Inc. SWOT Analysis Matrix (Strengths, Weakness, Opportunities, Threats).” 2020, fernfortuniversity.com/term-papers/swot/nyse/2321-comfort-systems-usa–inc-.php.
Internal
Strength and External Threats Strategic Fit
Internal Strength:
Innovation in Product and Service Development
External Thread:
Design and Development of new service solution for the industrial sector
Production of individual water purification system which can be offered as a service solution in the industrial market and commercial sector.
Internal Weaknesses and External Threats Strategic Fit
Internal Weakness:
Outdated Production Technology
External Threat:
Import and Export Taxes and Tariffs
Production of individual water purification system which can be offered as a service solution in the industrial market and commercial sector
5.3 Strategic Analysis
Internal Strength and External Opportunity Strategic Fit
Internal Strength:
Additional Market Opportunities for Increased Revenue
External Opportunity:
Development of Specific Product Categories within HVAC Industry
Seek product development of specific product categories in order to increase avenues of increased revenue within the HVAC industry. According to IBISWorld, there is an increased demand for solar power within the HVAC industry. The key segments that are attractive are unitary air conditioners (17.4 %), heating equipment (10.3%) and air purification (6.5%).
The trends of solar power is still at the beginning stages, and HVAC has a particular attraction as consumers in the commercial markets, who are more keen to install and buy solar power generation for their homes (GlobeNewswire, 2020). This is an important factor for Comfort Systems in order to solidify the strength of additional revenue streams and paring their financial position, with that of the threats of fluctuations of the HVAC market. Green technologies are a trend that are highly active at the moment both in the commercial and industrial area (technology companies). According to Furlong, there is a target within the energy sector and building sector to build fully functioning green homes, who are 100% Net Zero by the year 2030 (Furlong HVAC Service, 2018). Comfort Systems is in a very good position to take advantage of this growing market, who is growing at a pace 10% per year, according to (Nhede, 220), and Comfort System’s maintenance and construction segments can and should integrate such solution in their corporate strategy.
Internal Weakness External Opportunity Strategic Fit
Internal Weakness:
Innovation in Product and Service Development
External Opportunity:
Design and Development of new service solution for the industrial sector
Production of individual water purification system which can be offered as a service solution in the industrial market and commercial sector. Comfort System USA is a US only based business, that has had tremendous success in the industrial sector. While the industrial sector is big, there is only so much that can be done at home where the market is saturated and competition even more fierce. Comfort System has the opportunity to expand its borders beyond the US, in places such as India where industrial and commercial water purification market has low entry barriers and cost, and high potential for rapid growth (PR Newswire, 2012). In order to achieve a successful venture there, Comfort System can either invest by itself and have high cost and overhead, or they can enter a venture partnership with organizations such as Watts Water Technologies, who are looking to break into this new market due to its potential. Currently, the India water market is estimated to grow at a rate of 13% a year for the next decade (ref), as more companies look to expand their opportunities and market shares. There are also local opportunities for RO water purification needed and used in university laboratories, and in the food and beverage sector, “where preventing the spread of bacteria is paramount to ensuring healthy consumers” (Smart Water Magazine, 2019). The industrial sector also has high use and need for RO water, as it is hard to come by and maintain clean. Installing RO water purifiers (at the industrial scale) will drive down the cost of manufacturing where high water volume needs to be kept sterile and always on demand, as well as, becoming environmentally friendly.
Comfort System needs to analyze opportunities such as these and ensure capitalization on them in order to continue its success. Their industrial and commercial sectors already have the required infrastructure and knowledge in order to add on to their business model. Their involvement in such opportunities will lead to more innovation in these sectors and will lower the costs for such technologies which will drive new market growth based on need and specification. Diversification in their industrial business, and products, and services will allow for increased efficiency and cost structure across their business divisions, leading to increased revenue and further financial strength.
5.3 Strategic Analysis
Internal Strength and External Opportunity Strategic Fit
Internal Strength:
Additional Market Opportunities for Increased Revenue
External Opportunity:
Development of Specific Product Categories within HVAC Industry
Seek product development of specific product categories in order to increase avenues of increased revenue within the HVAC industry. According to IBISWorld, there is an increased demand for solar power within the HVAC industry. The key segments that are attractive are unitary air conditioners (17.4 %), heating equipment (10.3%) and air purification (6.5%).
The trends of solar power is still at the beginning stages, and HVAC has a particular attraction as consumers in the commercial markets, who are more keen to install and buy solar power generation for their homes (GlobeNewswire, 2020). This is an important factor for Comfort Systems in order to solidify the strength of additional revenue streams and paring their financial position, with that of the threats of fluctuations of the HVAC market. Green technologies are a trend that are highly active at the moment both in the commercial and industrial area (technology companies). According to Furlong, there is a target within the energy sector and building sector to build fully functioning green homes, who are 100% Net Zero by the year 2030 (Furlong HVAC Service, 2018). Comfort Systems is in a very good position to take advantage of this growing market, who is growing at a pace 10% per year, according to (Nhede, 220), and Comfort System’s maintenance and construction segments can and should integrate such solution in their corporate strategy.
Internal Weakness External Opportunity Strategic Fit
Internal Weakness:
Innovation in Product and Service Development
External Opportunity:
Design and Development of new service solution for the industrial sector
Production of individual water purification system which can be offered as a service solution in the industrial market and commercial sector.
Comfort System USA is a US only based business, that has had tremendous success in the industrial sector. While the industrial sector is big, there is only so much that can be done at home where the market is saturated and competition even more fierce. Comfort System has the opportunity to expand its borders beyond the US, in places such as India where industrial and commercial water purification market has low entry barriers and cost, and high potential for rapid growth (PR Newswire, 2012). In order to achieve a successful venture there, Comfort System can either invest by itself and have high cost and overhead, or they can enter a venture partnership with organizations such as Watts Water Technologies, who are looking to break into this new market due to its potential. Currently, the India water market is estimated to grow at a rate of 13% a year for the next decade (ref), as more companies look to expand their opportunities and market shares. There are also local opportunities for RO water purification needed and used in university laboratories, and in the food and beverage sector, “where preventing the spread of bacteria is paramount to ensuring healthy consumers” (Smart Water Magazine, 2019). The industrial sector also has high use and need for RO water, as it is hard to come by and maintain clean. Installing RO water purifiers (at the industrial scale) will drive down the cost of manufacturing where high water volume needs to be kept sterile and always on demand, as well as, becoming environmentally friendly.
Comfort System needs to analyze opportunities such as these and ensure capitalization on them in order to continue its success. Their industrial and commercial sectors already have the required infrastructure and knowledge in order to add on to their business model. Their involvement in such opportunities will lead to more innovation in these sectors and will lower the costs for such technologies which will drive new market growth based on need and specification. Diversification in their industrial business, and products, and services will allow for increased efficiency and cost structure across their business divisions, leading to increased revenue and further financial strength.
Internal Strength and External Threats Strategic Fit
Internal Strength:
Innovation in Product and Service Development
External Thread:
Design and Development of new service solution for the industrial sector
Production of individual water purification system which can be offered as a service solution in the industrial market and commercial sector.
Internal Weaknesses and External Threats Strategic Fit
Internal Weakness:
Outdated Production Technology
External Threat:
Import and Export Taxes and Tariffs
Production of individual water purification system which can be offered as a service solution in the industrial market and commercial sector
References
Furlong HVAC Service. (2018, August 14). How Going Green is Influencing the HVAC Industry? Retrieved from Furlong: https://www.furlonghvacservices.com/how-going-greener-influencing-the-hvac-industry/
GlobeNewswire. (2020, August 31). Factors, such as solar PV projects under construction, in the pipeline and planning stages, and supportive policies of the government are expected to boost the cumulative installed capacity of solar energy during the forecast period. Retrieved from GlobeNewswire: https://www.globenewswire.com/news-release/2020/08/31/2085905/0/en/The-United-States-solar-energy-market-is-expected-to-grow-at-a-CAGR-of-17-32-during-2020-2025.html
Nhede, N. (220, June 26). US: Wind and solar remain fastest-growing energy sources. Retrieved from Smart Energy: https://www.smart-energy.com/renewable-energy/us-renewables-outpace-coal-and-nuclear-says-eia-renewables/
PR Newswire. (2012, Oct 16). India Water Purifiers Market Forecast and Opportunities 2017. Retrieved from PR Newswire: https://www.prnewswire.com/in/news-releases/india-water-purifiers-market-forecast-and-opportunities-2017-174368511.html
Smart Water Magazine. (2019, 11 26). Reverse Osmosis System in Industrial Process. Retrieved from Smart Water Magazine: https://smartwatermagazine.com/news/membracon/reverse-osmosis-systems-industrial-processes