The SWOT analysis that my group and I came up with took a lot of time and research to ensure that our analysis would be effective. (SWOT analysis on page? ) Strengths Our group came up with five major strengths that Compass obtains. The first major strength that Compass possesses is they have excellent customer service. Excellent customer service is a major strength to have because this makes customers want to come back and this keeps revenue up. The second strength that is entailed on our SWOT analysis is strong client relationships.
This is evident in their day to day activities while dealing customers and clients. The third strength Compass possessed is they have a very diversified client base. The fourth strength is convenience. I think that Compass Group biggest strengths are that they have a diversified client base and that they are what clients view as “convenient”. Because Compass has three divisions that are station around the world it can gain different clients and be able their needs. The next strength that is entailed on our SWOT analysis is Compass Group has consistent revenue growth.
This is very important when dealing with any company because revenue is what pays the expenses to run the company and without revenue the company would go out of business. The last strength is Compass group’s diversified geographic presence. Compass Group has four divisions located in four different countries making it easier to target different client in different countries. Weakness Every company has weakness or things that can be better at and Compass is one of them companies.
One of Compass Group’s weaknesses is that since they have divisions all over the world, not all of the managers operate the same way. This can be a problem because as a company, you want everybody to be on the same page even if you have different divisions operating out of different countries. The second weakness is that Compass Group trades in too many countries. It is economically not worth it. The third weakness is that Compass group leverage ratios show high debt. This means that Compass Group is operating it’s company at a high risk.
The third weakness that Compass Group processes is that it has very low profitability ratios. The last weakness that is on the SWOT analysis is that Compass Group Time-Interest-Earned is very high. That means Compass has a lot of money that can be allocated for other purposes. Opportunities Just like every company has strengths and weakness, they also have opportunities to make their company better. The first opportunity is that restaurant industry sales have increased sixty-six percent in the U. S since 1970.
The second opportunity is that fifty-two percent of meals are eaten outside of the home. What both of these stats tell me are that more people are going out to eat instead and getting a traditional home-cooked meal and this can only help my company become more profitable. The third opportunities we saw for Compass is that the contract food service market is still growing. This is great for Compass because this gives Compass an opportunity to gain more clients. Another opportunity for compass Group to grow as a company would be to seek the military as a client.
Threats The threats to a company are the most important aspect of the SWOT analysis because a threat can cost a company money and it just might run you out of business. The first threat is that the sales /employee ratio is considerable lower than other industries. This could be a problem because as a company you are not getting enough sales per employee and you are losing money because of it. The second threat to Compass Group is that menu prices increased one-two percent with higher labor costs.
This could be a big threat depending on the customers because there are always going to be one or two customers complaining about the new prices but it becomes a problem when a majority of you customers start complaining then you can lose of on business. The third threat is the compass Group rival competitors control seventy percent of the US contract food market. If this threat is not lowered to somewhere among fifty percent Compass Group could lose a lot of money in the near future, because if you rival competitors control more than half or the market they can dictate the price to the market.
Then, Compass Group will have to make a choice if they want to continue with the own method or play copycat. The next threat of UN investigations can bring bad press to Compass Group and maybe lose some money too due to fines, court cost and things of that nature. The last threat is the never-ending problems of oil prices. This is not a huge problem for a big company like compass group but it is a problem because with rising oil prices it costs more to ship the necessary items to their destination.