Larsen & Toubro SWOT Analysis, Competitors & USP

SWOT analysis of Larsen & Toubro analyses the brand by its strengths, weaknesses, opportunities & threats. In Larsen & Toubro SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors.

SWOT Analysis is a proven management framework which enables a brand like Larsen & Toubro to benchmark its business & performance as compared to the competitors. Larsen & Toubro is one of the leading brands in the conglomerates sector.

The article below lists the Larsen & Toubro SWOT, competitors and includes its target market, segmentation, positioning & USP. Let us start the Larsen & Toubro SWOT Analysis:

SWOT Analysis of Larsen & Toubro

For Larsen & Toubro, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position.

Larsen & Toubro Strengths

The strengths of Larsen & Toubro looks at the key aspects of its business which gives it competitive advantage in the market. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Below are the Strengths in the SWOT Analysis of Larsen & Toubro :

1. 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
2. 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
3. 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

4. Over 45,000 employees form a part of its workforce

5. It has offerings like Construction, Heavy equipment, Electrical equipment, Power, Shipbuilding, Financial services and IT Services

Larsen & Toubro Weaknesses

The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Here are the weaknesses in the Larsen & Toubro SWOT Analysis:

1. Dependence on domestic operations for revenue generation - In FY2011, the company's domestic (India) operations contributed more than 80% of the total revenues.
2. Increasing debt impacting financial flexibility - L&T’s interest and brokerage expenditure over the period increased

Larsen & Toubro Opportunities

The opportunities for any brand can include areas of improvement to increase its business. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. Following are the opportunities in Larsen & Toubro SWOT Analysis:

1. 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

2. Strong project pipeline ensures revenue growth

3. Growing Indian construction & engineering industry - In 2015, the Indian construction & engineering industry is forecast to grow

Larsen & Toubro Threats

The threats for any business can be factors which can negatively impact its business. Some factors like increased competitor activity, changing government policies, alternate products or services etc. can be threats. The threats in the SWOT Analysis of Larsen & Toubro are as mentioned:

1. Rise in cost of construction may affect margins - The rise in crude prices, will increase the cost of transportation.

2. 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
3. Intense competition may reduce profitability – few competitors have substantially greater resources and superior capabilities than L&T

Larsen & Toubro Competitors

There are several brands in the market which are competing for the same set of customers. Below are the top 6 competitors of Larsen & Toubro:

1. ABB Ltd

2. Bechtel

3. Hindalco

4. Sundaram Fasteners

5. Gammon India

6. Lanco Infratech

Hence this concludes the Larsen & Toubro SWOT analysis.

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About Larsen & Toubro

Larsen & Toubro Overview
Parent Company	Larsen & Toubro
Category	Construction Services
Sector	Conglomerates
Tagline/ Slogan	It’s all about Imagineering
USP	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
Segmentation	Based on business type; Based on geography – India, Rest of Asia, the Americas, Africa, Europe, Australia
Target Market	Technology, engineering, construction and manufacturing projects Predominantly targets Indian projects
Positioning	A company that focuses on technology leadership

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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