Name: Abdullah Hussein Abdullah

Group: ESL 70 J

Phone No.: 01227190034

Assignment 2

You are kindly requested to develop a complete SWOT analysis either for your
organization or any other hypothetical firm.
Company brief.

At Otrac Heavy Equipment, we sell, rent, and service heavy machinery used in construction as well as power
generators. We are the only authorized representatives of the following heavy equipment manufacturers in Egypt:

Doosan, Bobcat, Furukawa, Venieri, Graco, Crafco, Broddson, Linde and Himoinsa for electric generators.

Our slogan “Machine Never Stops” refers to the fact that we have a committed after-sales service team that can fix
any maintenance problems or perform repairs on our heavy equipment. We even send our fleet of maintenance
trucks to any construction site to do on-site repairs because we understand that any delays in construction would
result in significant financial losses for our customers.

SWOT Analysis for OTRAC Heavy Equipment.

First: Environmental Scanning and Industry Analysis.

Environmental scanning (opportunities and threats)

Weigh Weigh
Threats
t t opportunities
Currency exchange rate and New projects (Infrastructure, construction,
30% interest rate 30% Agriculture, Transportation).
Customs regulations and import
25% laws 25% new markets (Libya, Saudi Arabia)
increase the ministry of defines special projects
20% Competitors Chinese brands 20% using heavy equipment machines
Increasing environmental use of new technology in diesel engine and
15% awareness 15% hydraulic systems
10% Consumer behavior 10% Growth rate of population
100% 100%

Industry Analysis (porter competitive model)

 Rivalry among companies (More attractive industry)

The heavy equipment industry in Egypt depends on dealerships with the biggest manufacturers of heavy
equipment around the world, like Caterpillar, Doosan, Hyundai, and Komatsu. It is a monopolistic competition
between four companies: Mantrac (Caterpillar dealer), OTRAC (DOOSAN dealer), EGYPCO (Hyundai dealer), and
EIM (Komatsu dealer). and it is an attractive industry.

 Bargaining power of suppliers (less attractive industry)

 In our industry, as all heavy equipment companies depend on the dealership, as explained, the suppliers have
greater leverage over the domestic company because the company has to deal with only one supplier and the
switching costs are very high.

 Bargaining power of the Buyers (More attractive industry)

Heavy equipment has a broad consumer base because of its multiple applications in sectors such as business
organizations, mining, oil and gas, roadways, construction, and agriculture. His staff of operators and
technicians also contributes to the high cost of client switching; if he chooses to transfer dealers and equipment
brands, he will need to invest more in training them. Additionally, the majority of consumer's desire unique
products that support their needs.

 Threats of new entrants (less attractive industry)

The government restricts Chinese brands for use in the government sector, and the majority of large
construction businesses do not accept Chinese products, making the heavy equipment industry more difficult
for new entrants to succeed in. Additionally, consumers tend to be brand and dealer-loyal.

 Threats of substitutes (More attractive industry)

Because customer switching costs are high, the quality of new substitutes is hard to come by, and the price of
substitutes is not lower than that of the present items, the heavy equipment business is more attractive.

The Five Forces Matrix

Importance Threat to
Force Weighted Score
Industry
Rivalry among companies competing in the
5 3 15
industry
Bargaining power of suppliers in the industry 5 4 20
Bargaining power of buyers 3 2 6
Threat of new entrants to the industry 2 3 6
Threat of substitute products or services 3 3 9
Total 56

Competitive Matrix Profile.

OTRAC (my
EIM Mantrac Key Success Factors
company)
Weighted Weighted Weighted
Rating Rating Rating weight
score score score
0.8 4 0.8 4 0.8 4 0.20 Product Quality
0.5 2 0.75 3 1 4 0.25 Aftersales services
0.45 3 0.6 4 0.3 2 0.15 Locations, Branches
 0.4 2 0.6 3 0.6 3 0.20 Customer retention
0.6 3 0.6 3 0.6 3 0.20 Product price
2.75 3.35 3.3 1.00 Total

External Factors Analysis Summary (EFAS)

Weighted
Rating Weight External Factors
Score
opportunities
0.6 4 0.15 New projects (Infrastructure, construction, Agriculture, Transportation).
0.375 3 0.125 new markets (Libya, Saudi Arabia)
increase the ministry of defines special projects using heavy equipment
0.4 4 0.10 machines
0.225 3 0.075 use of new technology in diesel engine and hydraulic systems
0.15 3 0.05 Growth rate of population

Threats
0.15 1 0.15 Currency exchange rate and interest rate
0.375 3 0.125 Customs regulations and import laws
0.4 4 0.10 Competitors Chinese brands
0.225 3 0.075 Increasing environmental awareness
0.15 3 0.05 Consumer behavior
3.05 1.00 Total Scores

Second: Internal scanning Organizational Analysis.

Internal Analysis (Strengths and Weaknesses)

Weight Weaknesses Weight Strengths

30% High employee turnover rate 30% Qualified and trained staff.
25% No marketing plan or department 25% After-sales services
25% number of Branches 20% SAP system (ERP)
20% owners are involved in daily routine. 15% quality and variety of products
10% Location
100% 100%

Internal Factors Analysis Summary (IFAS).

Weigh
Weighted Score Rating t Internal Factors
Strengths
0.675 4.5 0.15 Qualified and trained staff.
0.5625 4.5 0.125 After-sales services
0.3 3 0.10 SAP system (ERP)
0.3 4 0.075 quality and variety of products
0.1 2 0.05 Location

Weaknesses
0.6 4 0.15 High employee turnover rate
 0.25 2 0.125 No marketing plan or department
0.375 3 0.125 number of Branches
0.2 2 0.10 owners are involved in daily routine.
3.36 1.00 Total Scores