Question

Mega Moving Services (MMS) is a moving company serving the greater Philadelphia region. MMS has built extensive cash reserves and is well known in the area. Lately, high gas prices are eating into the company’s margins as they have a significant number of trucks in operation. As a result, MMS management is trying to get away from driving inside the city where their trucks have higher gas consumption. The market development team has identified rural, yet growing areas between Philadelphia and Pittsburgh in Central Pennsylvania as good locations to expand. First, identify what SWOT stands for. Based on what you know about a SWOT analysis and MMS, would this expansion be the right strategic decision? Why or why not?

Answer 1

Answer:

SWOT stands for Strength, Weakness, Opportunity, and Threat.

A SWOT analysis is a tool to identify which factors are influencing an organization to take initiatives or strategic actions. Based on internal factors (strength and weakness) and external factors (opportunity and threat) analysis and MMS, the expansion is the appropriate strategic decision. Although MMS is a renowned company, the profit margin is decreasing, which is a weakness of the company, the company's decision is appropriate. Therefore, the company's weakness outweighs the strengths.

The opportunity of the company is to lower the gasoline price, but there is still a threat of losing the market share. However, the opportunity is to earn more profit means it edges out the threat as well. Therefore, the strategic decision is correct.

Explanation: