AutoEdge SWOT Analysis

A SWOT analysis evaluates an organization’s Strengths, Weaknesses, Opportunities, and
Threats. A SWOT Analysis is a common tool that has been used by many businesses to evaluate
the internal and external factors that may affect their success (Phardemrod et al., 2019).

Strengths

1. Constant market demand
2. Highly skilled staff
3. High experience in the field

Weaknesses

1. High operational costs
2. Uncertain global economic outlook
3. High distribution costs

Opportunities

1. Emerging markets
2. Growth of the automotive industry
3. Growth of eCommerce

Threats

1. High competition
2. Increased processes automation
3. Increased automotive electrification

Strengths
Constant market demand. The organization operates in an industry that has constant
demand. The demand for auto parts will always be present as long as people continue using
vehicles. AutoEdge can therefore bank on this growth to plan its strategies.
Highly skilled staff. AutoEdge boasts a highly skilled staff that it uses in its processes. Its staff
has deep knowledge of the workings of the auto parts industry and is highly motivated to
continue performing and attain organizational goals.

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Experience in the field. AutoEdge boasts years of experience in the industry. The organization
has overcome challenges and a tough economic environment to remain relevant and competitive
in the market.
Weaknesses
High operational costs. The auto Parts industry has high operational costs. The materials
used in auto parts require inputs that are expensive to procure. The manufacturing processes are
also intensive and consume high overheads, thus, resulting in high operational costs.
Uncertain global economic outlook. The world has been recovering from the devastating
economic effects of the COVID-19 pandemic. People’s incomes were affected, and many
individuals were rendered jobless, which affected people’s purchasing power. Additionally, there
has been a steep rise in global oil prices, which affects the operations in the automotive industry.
High distribution costs. The distribution costs are becoming expensive due to the nature
of parts, complex logistics, and increased fuel prices. As such, the organization is spending more
to distribute its products, increasing operational expenses.
Opportunities
Emerging markets. AutoEdge can take advantage of the emerging markets as new
markets to offer its products. Emerging markets carry big potential, which AutoEdge can target
to achieve its strategic goals.
Growth of the automotive industry. The automotive industry continues to grow with
increasing innovation and research. New developments such as electric cars continue to provide

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new avenues that AutoEdge can focus on increasing its products to remain relevant and
competitive in the market (Boulanger et al., 2011).
Growth of e-commerce. The organization is strategically placed to fulfill retail activities
for customers through e-commerce platforms. These platforms are supported by online payment
methods and have become popular over time due to their efficiency and increased availability of
technology (Yuan & Chong, 2016).
Threats
Competition. There is stiff competition in the auto parts industry from established players
in the market. The high competition means that customers can easily switch to rival companies;
this threatens AutoEdge’s strategic and financial position.
Increased processes automation. The globe is becoming more technologically diverse,
and many such processes are increasingly becoming automated. While technology achieves a
better economy of manufacturing processes and higher precision, such technologies are also
expensive to acquire and maintain.
Automotive electrification. The electrification of vehicles becomes a threat to the
organization because electric vehicles require more complex auto parts (Boulanger et al., 2011).
There has also been an increased improvement in the performance of electric vehicles, which
may reduce the demand for auto parts.

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References

Boulanger, A. G., Chu, A. C., Maxx, S., & Waltz, D. L. (2011). Vehicle Electrification: Status
and Issues. Proceedings of the IEEE, 99(6), 1116–1138.
https://doi.org/10.1109/jproc.2011.2112750
Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-Performance Analysis
based SWOT analysis. International Journal of Information Management, 44, 194–203.
https://doi.org/10.1016/j.ijinfomgt.2016.03.009
Yuan, Z., & Chong, Y. (2016). A Study of Operation Mode in Cross-Border Mini E-Commerce
Auto Parts Industry. International Journal of U- and e- Service, Science and Technology,
9(5), 353–360. https://doi.org/10.14257/ijunesst.2016.9.5.32