Maytag: SWOT analysis
This paper seeks to prepare a SWOT analysis of Maytag for 2002 from which will be based a recommendation for the company’s strategic plan. SWOT stands for company’s strengths and weaknesses and industry opportunities and threats, thus, any strategic plan recommended should be one that will take advantage of industry opportunities, should protect the company from industry, should make use of company’s strengths and should correct or improve on company’s weaknesses. 2. Analysis and Discussion 2. 1. What are the key external trends/forces in Maytag’s external environment? What opportunities are available?
What forces in the environment might threaten Maytag? The key external trends/forces in Maytag’s environment that may produce the industry opportunities and threats are being derived using the Porter’s five forces model (Porter, 1980). Size of Suppliers As to size of suppliers, there appears to be strong force coming from these suppliers of capital, particularly long-term creditors. This can be considered as industry threat since it could drive down the profitability industry by making it hard to secure credits with stringent conditions like making it costly to secure them.
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This can be inferred with the company’s experience of having to reduce its debt from the proceeds of is sale on one of its acquired companies (Hunger, 2002). Threat to Entry There is low barrier to entry as evidenced by increasing competitors in the industry. This could be considered as threat since more players could mean more competition and therefore less profits. The industry is still expected to grow from 2000 to 2005 both in the US and the Canadian Market as per case facts (Hunger, 2002). Size of Buyers
The industry is characterized by high bargaining power of buyers because buyers who represent almost every family or individual that uses appliances and they have a wide array of choices from market. This is a threat to the industry as it could leave buyers shifting from one appliance manufacturer to the other. Availability of Substitutes The home appliance industry is characterized by low availability of substitutes as people of modern times may not go backward given the demand of the times to use appliances. This is therefore an opportunity for industry players which could create a further increase in demand for appliances.
This is has basis in the industry forecast of more sales and further growth in the industry (Hunger, 2002). Rivalry among Existing Firms There is a strong rivalry of among existing firms as declining profitability of the players. This is therefore a threat for players as they compete for the market, they would have to increase cost and thereby reduce their profitability. This is based on the maturity of industry in the Canadian and US markets with expected growth of only 1. 9% annually from 2000 to 2005. The rivalry has actually resulted to consolidation from more to few players (Hunger, 2002).
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