Question

Select and research a company from the 2019 Fortune 500 list that demonstrates a sustainable competitive advantage in the marketplace.Write a 700- to 1,050-word modified SWOT analysis that includes the following:

• An introduction with a detailed description of the company
• A SWOT Analysis Diagram that includes strengths, weaknesses, opportunities, and threats
• An evaluation of how specific internal factors (strengths and/or weaknesses) support and/or promote a competitive advantage; examples may include:
• Financial, physical, or human resources
• Access to natural resources, trademarks, patents, or copyrights
• Current processes (employee programs or software systems)
• An evaluation of how specific external factors (opportunities and/or threats) support and/or promote a competitive advantage;examples may include:
• Market trends (new products or technology advancements)
• Economic trends (local and/or global)
• Demographics
• Regulations (political, environmental, or economic)
• Conclusion with an evaluation of how the company has retained its competitive advantage

Answer 1

Fortune Brands SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP. SWOT Analysis is a proven management framework which enables a brand like Fortune Brands to benchmark its business & performance as compared to the competitors and industry.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Fortune Brands Home & Security to develop four types of strategies:

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
• WT (weaknesses-threats) Strategies

Strengths of Fortune Brands Home & Security – Internal Strategic Factors

As one of the leading companies in its industry, Fortune Brands Home & Security 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 Fortune Brands Home & Security are –

• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Good Returns on Capital Expenditure – Fortune Brands Home & Security is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
• Successful track record of developing new products – product innovation.
• Superb Performance in New Markets – Fortune Brands Home & Security 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 successful at Go To Market strategies for its 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 – Fortune Brands Home & Security has strong free cash flows that provide resources in the hand of the company to expand into new product.

Limitations of SWOT Analysis for Fortune Brands Home & Security

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 Fortune Brands Home & Security
• 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.

Weighted SWOT Analysis of Fortune Brands Home & Security

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 Fortune Brands Home & Security 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 Fortune Brands Home & Security

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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SWOT Worksheet & Template

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Threats Fortune Brands Home & Security Facing - External Strategic Factors

• Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
• Rising raw material can pose a threat to the Fortune Brands Home & Security profitability.
• 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.
• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Fortune Brands Home & Security   in those markets.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Fortune Brands Home & Security
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.

Opportunities for Fortune Brands Home & Security – External Strategic Factors

• Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Fortune Brands Home & Security’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 Fortune Brands Home & Security to drive home its advantage in new technology and gain market share in the new product category.
• Government green drive also opens an opportunity for procurement of Fortune Brands Home & Security products by the state as well as federal government contractors.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Fortune Brands Home & Security.