Amphenol Corporation SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Highly volatile foreign currency exchange rate: The majority of the companies are aware that currency exchange rates can have an impact on the dollar value of their assets and liabilities that are denominated in different currencies. Operating exposure is frequently a major factor in the variability in operating profit from year to year, and making wise decisions about it is crucial. Due to its global operations and use of numerous foreign currencies, the Company is exposed to foreign exchange risk due to fluctuations in the value of those currencies, including potential restrictions and/or devaluations. Sales, operating margins, and equity for the Company can all be impacted by changes in exchange rates, either favorably or unfavorably. Sudden decline in the value of any of the foreign currencies of the Company’s worldwide operations, could have an adverse effect on the Company’s business, financial condition and results of operations. Following the Russia-Ukraine war and the surge in world oil prices on the international market my mid-2022, the Euro fell drastically against the U.S. dollar, reaching its lowest level in nearly 20 years. As a result, this situation worsened the exposure of Amphenol's sovereign debt to foreign exchange risk.

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Political

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Economic

1. Impact of supply chain disruption due to pandemic: Global supply chains have faced significant obstacles as a result of the COVID-19 pandemic. The flow of raw materials and finished goods temporarily stopped by numerous national lockdowns, which disrupted the manufacturing process. The Company relies on third-party suppliers to obtain the basic materials and components it needs for its manufacturing processes, including plastic resins, aluminum, steel, copper, titanium, metal alloys, gold, silver, and palladium. The supply of these raw materials and components was initially disrupted by the COVID-19 pandemic, primarily in the first half of 2020. But more recently, in 2021 and the first quarter of 2022, the company experienced widespread supply chain disruptions that led to price increases for some raw materials and components as well as some supply shortages, all of which had a negative impact on business and operating results. For instance, in some of the markets the company serves, particularly the automotive market, the recent shortage of semiconductors has led to disruptions in both supply and pricing. The recent increase in prices and decreased availability of freight, logistics and other transportation services have made inflationary pressures worse. As a result, any future delays, disruptions, and supply and pricing risks, such as the ongoing supply chain difficulties and disruptions that is anticipated to be continuing in 2022, could have a negative impact on ability to meet customer demand for products and, consequently, negatively impact business, results of operations, and financial condition.

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Social

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Technological

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Legal

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Environmental

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