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Red Hat (SWOT Analysis)

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.”

Red Hat

Red Hat is a provider of open source solutions for Internet computing. The company provides custom engineering services to develop end-to-end software solutions primarily for use in the UNIX and Linux markets and also provides support and maintenance services for these software solutions. Red Hat operates primarily in the US. It is headquartered in Raleigh, North Carolina and employs 2,200 people.

Strengths, Weaknesses, Opportunities and Threats (SWOT)

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Association with leading independent software and hardware vendors
  • Consistent revenue growth
  • Strong customer base

Weaknesses

  • Lack of scale
  • Litigations

External

Opportunities

  • Strategic acquisitions
  • Increasing demand for open source software

Threats

  • Intense competition
  • Economic slowdown in the US
  • Product defects
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