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A Real Swot Analysis

A Real Swot Analysis

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Published by Prachanda Thapa

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Published by: Prachanda Thapa on Jul 22, 2012
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A REAL SWOT ANALYSIS
SWOT ANALYSISWhat is SWOT Analysis?
 A SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats and is a simple andpowerful way to analyze your company's present marketing situation.The best way to understand SWOT is to look at an actual example: AMT is a computer store in amedium-sized market in the United States. Lately it has suffered through a steady business declinecaused mainly by increasing competition from larger office products stores with national brand names.The following is the SWOT analysis included in its marketing plan.
STRENTH:Knowledge.
Our competitors are retailers, pushing boxes. We know systems, networks, connectivity,programming, all the VARs, and data management.
Relationship selling.
We get to know our customers, one by one. Our direct sales force maintains arelationship.
History.
We've been in our town forever. We have loyalty of customers and vendors. We are local.
WEAKNESSES:Costs.
The chain stores have better economics. Their per-unit costs of selling are quite low. Theyaren't offering what we offer in terms of knowledgeable selling, but their cost per square foot and per dollar of sales are much lower.
Price and volume.
The major stores pushing boxes can afford to sell for less. Their component costsare less and they have volume buying with the main vendors.
Brand power.
Take one look at their full page advertising, in color, in the Sunday paper. We can'tmatch that. We don't have the national name that flows into national advertising.
OPPORTUNITIES:Local area networks.
LANs are becoming commonplace in small business, and even in home offices.Businesses today assume LANs as part of normal office work. This is an opportunity for us becauseLANs are much more knowledge and service intensive than the standard off-the-shelf PC.
The Internet.
The increasing opportunities of the Internet offer us another area of strength incomparison to the box-on-the-shelf major chain stores. Our customers want more help with theInternet, and we are in a better position to give it to them.
Training.
The major stores don't provide training, but as systems become more complicated, with LANand Internet usage, training is more in demand. This is particularly true of our main target markets.
Service.
As our target market needs more service, our competitors are less likely than ever to provideit. Their business model doesn't include service, just selling the boxes.
THREATS
:
 
The computer as appliance.
Volume buying and selling of computers as products in boxes,supposedly not needing support, training, connectivity services, etc. As people think of the computer inthose terms, they think they need our service orientation less.
The larger price-oriented store. 
When we have huge advertisements of low prices in the newspaper,our customers think we are not giving them good value.SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. Itis applicable to either the corporate level or the business unit level and frequently appears in marketingplans. SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, andThreats. The SWOT framework was described in the late 1960's by Edmund P. Learned, C. RolandChristiansen, Kenneth Andrews, and William D. Guth in
Business Policy, Text and Cases
(Homewood,IL: Irwin, 1969). The General Electric Growth Council used this form of analysis in the 1980's. Becauseit concentrates on the issues that potentially have the most impact, the SWOT analysis is useful whena very limited amount of time is available to address a complex strategic situation.The following diagram shows how a SWOT analysis fits into a strategic situation analysis.Situation Analysis/\Internal AnalysisExternal Analysis/ \/ \Strengths WeaknessesOpportunities Threats|SWOT ProfileThe internal and external situation analysis can produce a large amount of information, much of whichmay not be highly relevant. The SWOT analysis can serve as an interpretative filter to reduce theinformation to a manageable quantity of key issues. The SWOT analysis classifies the internal aspectsof the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for building a competitive advantage, and weaknessesmay hinder it. By understanding these four aspects of its situation, a firm can better leverage itsstrengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastatingthreats.
Internal Analysis:
The internal analysis is a comprehensive evaluation of the internal environment's potential strengthsand weaknesses. Factors should be evaluated across the organization in areas such as:
 
Company culture
Company image
Organizational structure
Key staff 
 Access to natural resources
Position on the experience curve
Operational efficiency
Operational capacity
Brand awareness
Market share
Financial resources
Exclusive contracts
Patents and trade secretsThe SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.
External Analysis:
 An opportunity is the chance to introduce a new product or service that can generate superior returns.Opportunities can arise when changes occur in the external environment. Many of these changes canbe perceived as threats to the market position of existing products and may necessitate a change inproduct specifications or the development of new products in order for the firm to remain competitive.Changes in the external environment may be related to:
Customers
Competitors
Market trends
Suppliers
Partners
Social changes
New technology
Economic environment
Political and regulatory environmentThe last four items in the above list are macro-environmental variables, and are addressed in a
. The SWOT analysis summarizes the external environmental factors as a list of opportunitiesand threats.
How to Perform a SWOT Analysis?
 A SWOT Analysis is an integral part of a marketing plan and can also be part of a business plan.Knowing what a SWOT Analysis is and how to perform one is very important.

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