Oshkosh Corporation SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

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Threat

1. Fluctuations in the prices of raw materials: Oshkosh Corp. purchases significant amounts of steel, aluminum, petroleum-based products and other commodities. The prices for these raw materials have historically been highly volatile. U.S. steel plate prices spiked 50% from the end of the fiscal year 2017 through January 2019. Moreover, permanent increase in prices and surcharges might not be acceptable to the customers resulting in a loss of sales or delay in sales. In the Defense segment most of the company’s contracts are multi-year firm, fixed-price contracts. Under these contracts the company bears the risk of raw material fluctuations. Though the company enters into forward contracts with suppliers at the time when the contract is awarded yet the suppliers might dishonor their contracts. This would negatively impact the financial condition of the company.

2. Impact of covid-19 pandemic: The outbreak of the novel coronavirus has reduced demand for access equipment, refuse collection vehicles, concrete mixers among other things. Travel restrictions due to the pandemic has prevented customers the company’s Fire and Emergency segment from accepting and inspecting vehicles on a timely basis. Demand could also be reduced due to the financial hardships faced by customers in the wake of the pandemic. The pandemic has also led to volatility and disruption in the global capital markets which could impact the capital resources and liquidity of the company depending on the future developments. Moreover, the global supply chain has been disrupted by the pandemic, resulting in delays and inefficiencies which could continue in the future. The overall impact cannot be predicted with certainty, but the pandemic could continue to materially impact the business.

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Political

1. Susceptible to the changes in the annual U.S. defense budget: A major portion of the company’s revenue is generated from U.S government. This has resulted in the company been susceptible to the changes in the annual U.S. defense budget. Changes in the budget especially due to federal budget pressures, lower levels of U.S. ground troops deployed in foreign conflicts, sequestration and the level of defense funding that will be allocated to the tactical wheeled vehicle strategy can lead to a change in the revenue that is expected to be earned by the company. Moreover, the U.S. Government might not budget for or for a matter of fact not even provide appropriate funding for the company’s U.S. Government contracts which can prevent the company from receiving additional orders that it has anticipated. The funding of the U.S. government programs is subject to annual congressional budget authorization and appropriation process.

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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