One of the best ways to develop a picture of any company is with the SWOT analysis -- a look at a company's strengths, weaknesses, opportunities, and threats. Today I'd like to focus on Paychex
Strengths
Scale:
- Cost advantages
- Breadth of services
- Market insights
Brand:
- Name recognition in a fragmented market
- Affords pricing power
Sticky nature of core services:
- Recurring transactions
- High switching costs
Weaknesses
- Difficult to reinvest capital at high ROICs
- New services consume managerial mindshare
Opportunities
Cross-selling of new services
Organic market-share gains:
- Unique value proposition
-
Market is largely untapped
Roll-up acquisitions
Threats
Irrational industry pricing
High unemployment:
- Fewer checks cut
- Reduced float
- Lower interest rates
Regulatory environment
What parts of Paychex's SWOT need more detail? Fill in the blanks by using the comments section below.