STUDENT TASK: SWOT ANALYSIS

STRATEGIC ANALYSIS OF LVM LTD

TIME: 36 minutes TOTAL: 20 minutes

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1. Prepare a SWOT analysis based on your

assessment of the internal and external

Strengths

. High profits due to exceeding sale expectations

. Excellent staff relationships due to expansion, so not jobs were lost

. development into faster and better technology

. They sell to major brands, meaning that they have a good relationship

Weaknesses

. It doesn’t sell computers under its own brand name

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 . little factory capacity so large orders have to be turned down

. cash flow concerns

Opportunities

. When trade barriers are lifted they will have access to the Asian market

. there is a depreciation in exchange rates making costs lower

. high growth potential

. relocation so that they will have more factory capacity

Threats

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. Competitors that other businesses may develop new phone technology before them

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. shortage of skilled labor

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. A concern in inflation and interest rates increasing
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2. Identify and evaluate two potential strategic options available for LVM Ltd by using the SWOT
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diagram prepared in question 1.

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Relocating would mean that they would have more factory capacity, being able to accept large orders
from big name brands, giving them a good image and raining their revenue. This will lead to them being
able to invest in the development of their product, as well as raining wages for their workers. When
relocating, low cost labor may be available, giving them financial advantage. However, there will be need
for finance due to a concern in rising interest rates.

Another strategic potential option is selling their products under their own brand name. However, doing
this has many obstacles, such as competition from stable brands such as Apple, making it difficult for

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 them to break into the market and create a name or themselves. Furthermore, they need to create
brand loyalty with customers, as well as needing a high capital for investment. To make this possible, a
higher factory capacity is needed and development of their new products need to become quick so that
they can appeal and attract customers. Lastly, they have a lack of experience in this factor and they sell
through other brands, meaning that they need to make a plan including things like their channels of
distribution for the product.

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