Published in Conglomerates category by MBA Skool Team
Larsen & Toubro is one of the leading brands in the conglomerates sector. Larsen & Toubro SWOT analysis evaluates the brand by its strengths & weaknesses which are the internal factors along with opportunities & threats which are the external factors. Let us start the SWOT Analysis of Larsen & Toubro:
Market leadership providing competitive edge - The company can leverage its strong brand name and market leadership position to gain competitive advantage and also expand into international markets
Strong technical expertise reinforce leadership position - L&T has set up an engineering and project management centre in Abu Dhabi to undertake oil and gas related projects as well as engineering and consultancy services
Diversified revenues providing resilience - In FY2011, the company’s revenues were distributed among business divisions as follows: engineering and construction, electrical and electronics, machinery and industrial products, financial services, developmental projects and others. This enables L&T to alleviate its business risk as fluctuations in a single offering have lesser impact on diversified offerings and provide resilience to its revenues
Over 45,000 employees form a part of its workforce
It has offerings like Construction, Heavy equipment, Electrical equipment, Power, Shipbuilding, Financial services and IT Services
Above are the strengths in the SWOT Analysis of Larsen & Toubro. The strengths of Larsen & Toubro looks at the key internal factors of its business which gives it competitive advantage in the market and strengthens its position.
Larsen & Toubro Weaknesses
Dependence on domestic operations for revenue generation - In FY2011, the company's domestic (India) operations contributed more than 80% of the total revenues.
Increasing debt impacting financial flexibility - L&T’s interest and brokerage expenditure over the period increased
These were the weaknesses in the Larsen & Toubro SWOT Analysis. The weaknesses of a brand are certain aspects of its business which it can improve.
Strategic joint ventures strengthening business - L&T has formed a strategic partnership with Cyan Holdings plc, a UK-based integrated system design company. L&T and Cassidian entered into a partnership in February 2011, to become an electronics house
for defense and security
Strong project pipeline ensures revenue growth
Growing Indian construction & engineering industry - In 2015, the Indian construction & engineering industry is forecast to grow
Above we covered the opportunities in Larsen & Toubro SWOT Analysis. The opportunities for any brand can include prospects of future growth.
Larsen & Toubro Threats
Rise in cost of construction may affect margins - The rise in crude prices, will increase the cost of transportation.
Challenges in land acquisition likely to affect business - in 2011, Indian government introduced ‘The Land Acquisition, Rehabilitation and Resettlement Bill, 2011’. As per the bill, compensation for the owners of the acquired land shall be four times the market value in rural areas and twice in urban areas
Intense competition may reduce profitability – few competitors have substantially greater resources and superior capabilities than L&T
The threats in the SWOT Analysis of Larsen & Toubro are as mentioned above. The threats for any business can be external factors which can negatively impact its business.
One of the largest and most respected companies in India for engineering, manufacturing and integration of custom made technology-intensive equipment and systems
Larsen & Toubro STP
Based on business type; Based on geography – India, Rest of Asia, the Americas, Africa, Europe, Australia
Technology, engineering, construction and manufacturing projects
Predominantly targets Indian projects
A company that focuses on technology leadership
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