SWOT analysis was created by Albert Humphrey in the 1960’s/1970’s. It can be defined as a process which generates information that is helpful in matching an organization or group’s goals, programs, and capacities to the social environment in which it operates (Morrison, M., 2008. The Complete History And Guide To SWOT Analysis). It allows a company, such as Neue Schule to identify their internal strengths, weaknesses and external opportunities and threats. It helps them to discover what they do better than their competitors and what the competitors do better than them.
A major strength to Neue Schule is that it is a niche company, which means that it has few competitors and allows it to easily gain market share. This popularity would mean that new buyers effectively ‘buy for the name.’ Furthermore, a lot of buyers would assume that a high price would reflect a quality product ensuring results. Another strength is that they sponsor riders enabling more exposure for the brand eventually becoming a worldwide name.
A weakness to the company is that the product is expensive which limits the amount of people that can afford to buy it. This may act as a deterrent when there are cheaper substitutes. In order to make these products they have to import unique materials and do in depth research and development to support the quality of their bits, which is costly to the business.
Neue Schule has some exciting opportunities. In the future they could branch out from bits into other products- something they have recently done with their new spurs. Not long ago, at Your Horse Live, they set up a mechanical horse for people to ride on and it gives objective feedback on your riding technique. Doing this in the future could attract more customers since it is fun and informative.
At the moment they have limited threats. There are substitute bits which are cheaper but arguably don’t deliver the same results. They do have some competition such as Bomber bits however competitors don’t have much influence on the success of Neue Schule at the moment. But, with the company bringing out new products competitors could start doing the same.
| Threats – Competitors > similar bits from other companies at a better price – Similar cheap bits | Opportunities – Branch from bits into spurs etc – Props/event management > get involved which brings more customers | |
| Weaknesses – Expensive > limited target market – Importing of unique materials > costly – Legislation > animal rights, affiliated competition legal? – Research & development = expensive | – Focus on cutting down overheads so that they can lower the price of the bit while ensuring their profit margin stays they same – Quality materials have proven better performances than cheap substitute bits | – Importing unique materials > more customers inclined to purchase (rare materials not available in country) |
| Strengths – Niche company – Buy for the brand > price reflects quality – Large market share – Sponsorship > more exposure – Used worldwide | – Continued sponsorship > constant exposure (more than other competitors?) – Niche company > harder for competitors to enter the market > barriers | – Good profit due to expensive price range of products > more money to invest in other products/branching out as a brand – Reputation |
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