Keysight Technologies SWOT and PESTLE Analysis

Strength

1. Comprehensive sales channel with global reach: Keysight maintains a network of over 700 channel partners to maintain healthy geographic coverage. This channel partner network is also complemented by an e-commerce channel to empower the direct sales force, which has doubled in strength over the last five years as per one of the objectives of the company’s sales channel strategy. The company has acquired technical salespeople and application engineers across the world to increase its access in its operating geographies. The company’s salesforce and channel partners generate more than 75% of sales for it through direct customer interactions. The global workforce’s product portfolio, acquired by heavy investments and acquisitions, consists of majorly high-performance products which are able to get higher margins for the company. The emphasis on a quality sales force has helped the company by increasing solution sales, which can be seen in the increase in Keysight’s unfilled backlog from $ 1.4 billion in FY19 to $ 2.1 billion in FY21.

2. Best design capabilities due to proprietary software and hardware technology: Keysight Technologies delivers best products and solutions in design and measurement capabilities as they are purpose-built and customized according to customers’ engineering requirements. Its proprietary software and technologies are developed by R&D centers located in all operating geographies and manufactured mostly in their in-house fabrication centers. Keysight’s design capabilities include simulation, prototype, development and validation solutions for hardware and software for its customers. The company has differentiated itself in six platforms of measurement: radiofrequency and microwave design simulation software, network analyzers, network test, oscilloscopes, signal analyzers and signal sources. The company’s technical expertise and differentiation enables it to deliver on the first-to-market strategy.

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Weakness

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Opportunity

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Threat

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Political

1. Nationalistic policies could result in increased transaction costs: All major countries across the world are moving towards protectionism and are adopting nationalistic policies. United States and China are opposing globalization and free trade and are imposing sanctions on certain exports or restrictions in forms of duties and tariffs. Further, tax policies are being designed in a way that protects domestic companies from international competition, disrupting the free flow of trade and business and eventually resulting in inefficient use of resources. Similarly, in Europe the UK has pushed to get separated from the Eurozone free-trade agreement to promote its nationalistic interests. Similar events are happening in other parts of the world also which are eventually increasing transaction costs for businesses, reducing access to better raw material and talent, restricting demand among many other negative effects on the global economy. Each of these effects would directly impact Keysight’s business.

2. Geopolitically provoked trade sanctions could hamper stakeholder relationships: Sanctions and export restrictions by US government on the company’s customers and suppliers could severely impact Keysight’s business. For instance, if a customer or supplier gets added to the “Lists of parties of concern”, its export privileges can be denied or suspended. Under these circumstances the company has no choice but to suspend its relationship with the entity. Under present circumstances where US and China are in a trade war situation, new sanctions are getting released very frequently due to which Keysight must keep a tight watch on who the company is dealing or doing business with. Some customers or suppliers are very difficult to replace and it costs the company to acquire a similar customer or supplier.

Economic

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Social

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Technological

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Legal

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Environmental

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