SWOT analysis for Trinseo
Trinseo produces products that are made of synthetic rubber, latex and plastic. One of Trinseo's strengths is that it has a workforce that is motivated and highly skilled. One of its weaknesses is that it spends a lot more on training and development than its competitors, and it also has a high employee turn-over rate. Currently, Trinseo has the opportunity to capture new markets, and the government's green drive allows the purchase of their products by contractors from the state and federal government. Trinseo faces the threat of extreme competition, and this affects sales and profitability. Below you will find a deep dive of my findings.
According to research by Fern Fort University, Trinseo has a workforce that is motivated and highly skilled. This is due to their investment in learning and training. The company is also known for offering new products and for conducting successful product innovation projects. Trinseo's distribution network is reliable and has the capacity to reach many markets. In addition to this, Trinseo's customer relationship management division has satisfied clients in the past, and it has produced a good brand equity among future customers.
Trinseo has a culture where dealers promote and invest in teaching the sales team about their product. Automation has allowed the company to scale up and scale down according to demand. SWOT analysis 24 credits Trinseo with a high growth rate.
In 2016, the company generated $3.7 billion in revenue. Other key 2016 financial highlights include:
"- Net Income of $318 million and diluted EPS of $6.702
- Adjusted EPS of $7.283
- Adjusted EBITDA of $611 million3
- Cash provided by operating activities of $404 million;
free cash flow of $280 million."
The company has 2,200 employees in 27 countries and has 15 manufacturing sites and 10 R&D facilities globally. The company focuses on Performance Materials (Latex Binders, Synthetic
Rubber and Performance Plastics) and Basic Plastics & Feedstocks (Basic Plastics, Feedstocks, Americas Styrenics JV).
The company also announced a couple of growth initiatives, including the opening of its first ABS production site in Zhangjiagang,
China, "a new S-SBR pilot plant being built in Schkopau, Germany," and "the construction of a modern R&D facility in Terneuzen, The Netherlands."
Trinseo spends a lot more on training and development than competitors, and it also has a high employee turn-over rate.
The company has not been successful in responding to the offers of new competitors. Consequently, it has lost a percentage of its market share in certain categories. Also, financial planning is not conducted in the most effective manner. Trinseo is looking to expand its operations throughout different geographies, but to do this, they must invest more in new technologies. Currently, their vision does not match their investment.
The structure of Trinseo is not suitable for their current business model. It does not allow the company to expand into adjacent product segments. Trinseo is also not good at integrating the cultures of firms that differ from one another. The company's "Net Contribution % and profitability ratio" are not in accord with the industry average. Trinseo has high loan rates.
Recently, Trinseo has experienced high demand for "glass-filled CALIBRE 5000 Polycarbonate Resins" that are used in medical work. Due to the popularity of bedside assistance and device portability, Trinseo's products are used instead of metal and expensive plastics.
After the recession, there has been an increase in spending and growth. Trinseo has the opportunity to capture new markets, and the government's green drive allows the purchase of their products by contractors from the state and federal government. Lower inflation rates will provide for greater stability in the industry, and this will allow the company to become more competitive. There will be a decrease in the cost of transportation, and this will reduce the cost of Trinseo's offering. This will allow the company to become more profitable or to increase its market share by passing on these benefits to the customer. New policies concerning the environment will offer Trinseo a level playing field to compete with others in this industry. The company will be able to use its new technology to gain an advantage in the market. SWOT Analysis 24 mentions that opportunities for Trinseo are venture capital and global markets.
In the past two years, profitability in the industry has increased the number of competitors. Trinseo faces extreme competition, and this affects sales and profitability. In emerging markets, counterfeit options are a threat to Trinseo's growth. Trinseo is open to facing lawsuits in several markets due to the changing standards in this industry. It is also exposed to currency fluctuations because it has operations in many countries throughout the world. Local distributors are also a threat because they are being paid higher margins. The behavior of customers due to online shopping can also change the dynamics of the existing supply chain. In the American economy, there is an increasing trend toward isolationism, and this threatens international sales. Tax changes are also a possible threat.
To conclude, Trinseo's strengths include a workforce that is motivated and highly skilled. Its weaknesses include the fact that it spends a lot more on training and development than its competitors. Trinseo has the opportunity to capture new markets, and the government's green drive allows the purchase of their products by contractors from the state and federal government. Trinseo faces the threat of extreme competition, and this affects sales and profitability.