SWOT analysis, I am having a hard time with this problem. Can you help me with ?

MDT Ltd is a private limited company. It was formed in 1983 by three former electricians because they liked working
together and they thought that they could make a living by making good-quality, inexpensive, electrical appliances. Each
of the founders invested £10,000 as the share capital of their company in 1983 and the share capital has remained
unchanged since then.
MDT Ltd manufactures small electrical appliances, such as kettles, hair dryers and irons. These are sold to wholesalers
and eventually retail for around £25 each.
MDT Ltd currently employs 35 people and has a turnover of £3 million. The business normally makes a post-tax profi t of
between £150,000 and £200,000 and distributes half of this to the founders.
MDT Ltd had the following assets at its last year end:
£
Freehold property 500,000
B Plant and equipment 250,000
Cars 50,000
Stocks and debtors 250,000
* This figure represents the property’s market value at 30 June 1993.
MDT Ltd had no long-term debt at the year end. It did have an overdraft of £10,000. MDT Ltd had no creditors at the year
end. This was due to its policy of paying every bill as soon as it was received. The founders were reluctant to employ debt
in their financing as they felt it was likely to compromise their independence.
Product research and development was managed until 1990 by Mr M, one of the founders. In that year he retired from
full-time work with MDT Ltd, but continues to work part-time for 2 days a week. Mr M is still a shareholder with an
equal amount of shares as the other two founders.
Mr M’s replacement was a graduate electronics engineer who had previously worked for the company during vacations.
Since the appointment, she had devoted most of the time of her department on developing a new product. She has now
finished this and the product has performed well in initial trials. She is not a shareholder.
Product
The product has been given the name of the ‘Integrator ’ . It is a remote-control device that can operate any remotelycontrolled electrical appliance, for example, television, video, alarm system, microwave, and camera. The Integrator was
made in the development department and the variable cost of its manufacture was £10 per unit. The component which is
unique to the Integrator is a computer chip designed by the engineer. The chip has been patented and ownership of the
patent is vested in MDT Ltd.
Market prospects
MDT Ltd does not have a marketing department and so it commissioned a leading firm of consultants to study the market
prospects for the Integrator in the United Kingdom. The results are very encouraging. The consultants believe that the
Integrator would sell at least a million units in the fi rst year in the United Kingdom. They believe it would retail for £50.
Sales would remain at this level for 5 years and then fall to 250,000 units a year for the foreseeable future. The consultants
also suggest that MDT Ltd should seek worldwide patent protection for the Integrator as it will be attractive in many other
countries. The consultants charged £50,000 for their report which is double the amount MDT Ltd would normally spend
on marketing in a year. The consultants have offered to study the world market for the product for £100,000, or they
would study individual countries at £10,000 each.
Future options
Following the UK marketing study, MDT Ltd felt it needed to make some plans for the future. It felt it appropriate to gain
further guidance from the consultants who had the experience that MDT Ltd lacked. This further study cost £80,000 and
MDT had to arrange a bank overdraft to finance it.
In the opinion of the consultants, MDT Ltd has the following choices:
? Manufacture the Integrator. In order to do this, MDT Ltd would have to invest £20 million in its manufacturing
processes, working capital and launch costs to enable it to meet UK demand. To meet future world demand, the
investment would need to be more substantial but the consultants cannot forecast this until they do the further
marketing study.
? Sell the patents. The consultants are sure that the patent would fetch a substantial sum of money but until they
seek offers they are not sure how much.
? Franchise the rights to manufacture and market the Integrator. The consultants believe that such a franchise would
be eagerly sought by many companies.
Required:
Carry out a SWOT analysis for MDT Ltd. (10 marks)