SWOT analysis of MMP

Guy's heres the SWOT that Ross and I worked on. It may be too long but we can cut it where necessary.

When any established company decides to expand their business operations to those that they have not attempted before, there is a great deal of planning and examining that needs to be done first. In the case of Midwest Metal Products’ desire to enter into the wedding market, which is almost the exact opposite of its normal business focus, a great deal of careful and well aimed planning needs to be utilized. Just the right planning tool needs to be utilized in order to give the most effective “feel” of the new, potential market. The SWOT analysis focuses in Strengths, Weaknesses, Opportunities and Threats. We feel that our SWOT analysis will give MMP the greatest plan for future business ventures. For MMP, it was fairly easy to define the company’s strengths and opportunities that are on the horizon. It was much easier to pinpoint their weaknesses and threats. The wedding industry is a totally new venture for MMP and we feel our SWOT analysis will show that this already established company is heading in the wrong direction.
Our SWOT analysis of MMP begins by looking at their strengths. The presentation given to our group by Midwest Metal Products clearly showed us that they are confident of their production capabilities and feel that they can effectively utilize their equipment to successfully branch-out into new markets. We feel that their idea of branching out into the wedding business is too far outside the box, especially since the company consistently deals industry-type of products. Even so, MMP does have some resources, which may help guide them into this endeavor. MMP is a well-established company, which has been in the business since the mid 1960’s. Their facility is located in Cedar Rapids, which is a major metropolitan of Iowa with an easy reach to the rural communities. They also have the capability to expand well outside the state since major arteries such as Interstate 380 and Highway 30 run through Cedar Rapids. Their expertise is working with metal, such as steel, to produce everyday industrial items. A common example of their product is the metal electronic cabinets, which house common items as projectors in school houses. They have an impressive reputation and are ISO certified, which may reflect on their capability of producing wedding products. Additionally, brides-to-be may look upon their business in a favorable light when they find out that MMP are woman-owned. MMP has the capabilities to mass-produce items such as the wedding placards or plaques on a large or small scale. They already have the machinery and equipment in place to easily switch the production line over to work on potential wedding orders. This may be possible during changes in shifts or if more equipment is purchased it can be run on a full-time basis. The items that they own such as laser-cutters, robotic welders, machining, or the ability to powder coat is very expensive and requires minimal human labor. This equipment can be programmed by a future design team and left alone while the equipment does the work. MMP’s intent of utilizing their equipment to the highest effectiveness, gives them the potential to bring in as much revenue as possible. The increase in production may help improve their overall efficiency by lower their average cost per unit of production and increasing the amount of production from their facility. This may help to improve their economies of scale by spreading out their fixed costs over all of their goods, instead of their current line of electrical boxes.
Since MMP is a privately held company they have the freedom to explore new ideas, even if it is the virtual opposite of the current line. The wedding industry today is very large and encompasses many vendors from around the world, offering many different products. This large and diverse market thus provides opportunities for ambitious and forward-thinking companies to enter. For the type of product that MMP is proposing, there is a potential market.
Continuing to look internally at MMP brings about a few weaknesses that should be carefully considered when officially deciding on this venture. MMP has no experience when it comes to the wedding department. Apart from the few men and women that have gotten married within their company, it seems little research has been done to really outline the market that they are delving into. A lack of experience may also impose on the fact that they have no presence in the current market. There are already several types of wedding planners and company’s within the Cedar Rapids area and they already offer products which may be of a similar type. Additionally, the company is working far to the left of their core competency and trying to convince their own staff to pursue this venture may prove too difficult. Since they are working outside the core competency, they will have to establish a few new departments, which will require a vast amount of resources to commence. All of these resources will require new equipment, new employees, and additional space in their facility and most importantly, money. Since they’re reaching into a new market, these resources will need to be used to start up new departments such as a design department and most importantly a customer relations department. Given that they will have to deal with all of these start-up costs their pricing structure will surely cost the consumer a copious amount of money for little amount of product. On top of all this, MMP are limited on their ability to work with any product other than steel or aluminum. If a costumer is willing to shell out a large amount of money they will definitely want to have some placards made with some sort of precious metals. They’re current abilities does not allow them to work with these types of products since the melting point temperatures of these products are low. Small companies that are in every mall in America can work with metals such as brass or silver to engrave at a reasonable price.
Despite all of the potential threats of branching out into the wedding industry, MMP have a few opportunities to peruse. Potential customers around the state and throughout the Midwest may appreciate the fact that the company is based out of Iowa. Companies such as David’s Bridal are a nationally owned chain and much of their product is outsourced to other states or countries such as China. This may also open the door for them to work with wedding planners throughout the state who are looking to work with locally owned shops. There are opportunities to test their product at Wedding shows here in Des Moines and throughout the Midwest. This will give them an opportunity to find out what the customer is willing to pay for the product and how feasible the market really is. The wedding industry is a multibillion dollar industry, and the product they are offering just might be an unfulfilled need that MMP just might be able to tap into. The threats that MMP needs to consider are quite viable and should not be taken lightly. Although there may be a potential market for cold steel on wedding tables, they are numerous other companies that are making similar types of products. MMP should have the ability to undercut these company’s by initially offering their products at a substantially lower price. But with their inability to start into this venture without a huge amount of additional overhead, other competitors will actually be undercutting them. Meanwhile, while they are trying to establish some sort of reputation in the wedding industry, other competitors may take away business from their core competency. Unless, MMP is willing to do both projects on a massive scale, competition will be their Achilles' heel. Competitors that are established in the wedding industry already have better access to channels of distribution are not willing to share that. Lastly, their overall weakness could be identified as a lack of marketing experience in the wedding industry since they have no design staff or marketing department. All of which will require vast amount of resources since competitor’s marketing and design campaigns can be seen all over the internet, television and radio spots.

Take it easy,
Forrest