PRESENTATION

ON

SWOT ANALYSIS

Presented By:

B. Aditya
Aloke

Symbiosis Center for Information Technology, Pune

 SWOT
STRENGTH
WEAKNESS
OPPURTUNITIES
THREATS

But what is SWOT ????

 WHAT IS SWOT ?

•A way of painting 360 degree Picture of some

situation or product offering.
•A Vision to establish the starting point for
development of Strategies.
•An analytical, strategic business development
analysis and planning tool
INPUT :
Sound Knowledge of Present Situations and Trends.

OUTPUT :
Structured Basic Information Giving the
Understanding of Reality and Strategic Options.
 WHY SWOT ?

 Tool in Information Gathering and Planning Process.

 Sound Knowledge of Present Situation and Trends.
 Output Obtained is Structured.
 Low cost way of analysis.
 Fairly Simple.
 Provides Clear vision for Setting goals and Objectives.
 BASIS OF SWOT
 It is grounded in the basic principle that strategy-
making efforts must aim at producing a good fit
between :
COMPANY’S RESOURCE CAPABILITY
&
ITS EXTERNAL SITUATIONS
 AIM OF SWOT
From a Firm’s Perspective :
Sizing up :
Firm’s Strength and Weaknesses.
Firm’s Opportunities and Threats.
 Firm’s Resource Capabilities and Deficiencies.
Simply Speaking :
A clear Overview of the Firm’s Business
Position.
 USING METHODOLOGY OF SWOT
Internal Analysis External Analysis

Organization’s Organization’s Opportunities Threats to the

Strength Weakness to the Org. Org.

Where do
internal and
external
factors meet?

WHAT CAN
WE DO
ABOUT IT?
 Internal Situation Given by :
Strength Weakness
•Internal Asset of Know How •Internal condition
•Technology •Internal Deficit
•Motivation •Endangers the
Entrepreneurship Spirit Competitive Position of
•Finance any Product / Service.

•Business Links
Whatever Helps u to Whatever Hampers
Exploit Opportunities and the exploitation of
fight off threats. Opportunities
 External Environment Given by :

Opportunity Threats
Characteristic or Any Unfavorable Trend
External Circumstance
External circumstance
which favors the demand
of the product or service.
Leading to unfavorable
Wherever company is influence on the
enjoying an advantage Company’s position.
 PRINCIPLES OF SWOT

Strategic Focus
Strengths and Weaknesses
Opportunities and Threats
Time Frame
Common Pitfalls
 The power that
Strengths
holds the structure

Weaknesses The pressure that

leads to the downfall
 Strength
• It is the one which is done well by the
company
• It is the one which makes the company
establish itself strongly in the market
• It is the one which gives the company the
efficiency to utilize the opportunities and
the confidence to fight the threats
• It is the one which gives the company a
unique recognition in the marketplace
 Analyzing Strengths
• This analysis helps to make major decisions
in the organization
• This analysis serves as the important aspect
in the estimation of the performance of the
company
• This analysis also helps in comparing the
company’s performance with its competitors
 Forms of Strengths
• Good Skill or Expertise
• Physical Assets
• Human Assets
• Organizational Assets
• Intangible Assets
• Competitive Capabilities
• Achievements
• Alliances
Building Competitive Advantage
on Company Resources

Competitive
Advantage
Strategic Assets and
Market Achievements
Core and Distinctive
Competencies
Competitive Capabilities

Company Resources
 Weakness
• It is the one which acts as a disadvantage
to the company
• It is the one which causes the downfall of
the company
• It is the one which makes the company
lose the marketplace
• It is the one which gives the company an
instability in the market
 Forms of Weaknesses
• Inefficient Skill or Expertise

• Lack of Valuable Assets

• Weak Competitive Capabilities

 Company’s Competence
• Critical component in assessing
company’s situation
• Learning and buildup of real proficiency
• Competencies are consciously built and
developed
• To develop organizational ability
 Examples of competence
• Skills in merchandising and product
display
• Expertise in specific technology
• Select good locations for retail outlets
• Working with customers on new
applications
• Expertise in just-in-time inventory
practices
 Competitive Capability
• Customers deem the competence
valuable and beneficial
• Helps differentiate a company from
competitors and enhances its
competitiveness
• All are not equal – some just survive and
others hold potential for changing basis of
competition
 Core Competencies
• Competitively important internal activity
done very well.
• It is done better than other internal
activities
• It becomes core competence as it is
central to a company’s competitiveness
and profitability
• Examples of core competencies
 Continued…
• Can have more than one in resource portfolio.
• Qualifies as a genuine company strength and
resource
• It resides in its people and intellectual capital
and not in its assets
• Cross-department and cross-functional
combinations of skills, resources and
technologies
 Distinctive Competencies
• Competitively superior competence – how
good is it relative to competitors’
competencies
• Core competence doesn’t become
distinctive competence unless a company
performs that activity better than its rivals
• A core competence becomes a basis for
competitive advantage only when it is a
distinctive competence
Examples of Distinctive Competence
• Sharp’s corporation - flat panel display
• Toyota and Honda – low cost, high quality,
design-to-market motor cycles
• Intel – new generations of powerful
semiconductor chips
• Motorola – defect-free manufacture of
cellular telephone equipment
• Rubbermaid – innovative rubber and
plastic products
 Importance
• Its importance in strategy making lies with:
• Competitively valuable capability
• Its potential of being a corner stone of strategy
• Competitive edge it produces in the marketplace
• Competitive Advantage
• Distinctive competence in activities important to market
success
• Rival companies do not have offsetting competencies
• Costly and time consuming for rivals to imitate the
competence
 Competitive Value
• Unique to each company
• Tests to qualify for sustainable competitive
advantage:
• Is the resource hard to copy? – The more it is difficult and
expensive to copy, the greater is its potential competitive value
• How long does the resource last? – The longer the resource lasts,
the greater is its value
• Is the resource really competitively superior? – Companies should
always keep the resource competitively superior than its rivals
• Can it be trumped by resources-capabilities of rivals?
 Competitively Superior
Resources
• Most companies’ resources are not
competitively superior to pass the tests
• Most businesses have mixed bag of
resources
• Only strongest industry leaders posses
competitively superior resource
• Significant competitive advantage from
collection of good to adequate resources –
for example, Toshiba’s laptop computers
 Matching Strategy
• Create competitive advantage
 Managers need to take decisive remedial action to upgrade
existing organizational resources and capabilities
 Managers have to look towards correcting competitive
weaknesses
• Strategy making principle:
 A company’s strategy should be tailored to fit its resources-
taking both strengths and weaknesses into account.
 As a rule, managers should build their strategies around
exploiting and leveraging company capabilities and avoid
strategies that place heavy demands on areas where the
company is weakest or has unproven ability.
 Selecting Competences and
Capabilities
• It is the essence of astute strategy making
• Selection is done to concentrate on and use to
underpin the strategy
• Sometimes companies already posses
valuable competences and capabilities that
strengthen the resource base
• Sometimes the desired competences and
capabilities have to be developed internally or
acquire through alliances having the expertise
OPPORTUNITIES
 Opportunities
• One of the factors outside one’s organization which determine one’s
success or failure in the market place.

• Managers can’t properly tailor strategy to the company’s situation without

first identifying each company opportunity and appraising the growth and
the profit potential each one holds, depending on the prevailing
circumstances

• Can be plentiful or scarce and can range from wildly attractive to marginally
interesting
• The market opportunities most relevant to a
company are those that offer:
 Important avenues for profitable growth
 Those where a company has the most
potential for competitive advantage
 Those that match up well the company’s
financial and organizational resource
capabilities.
Not every company in an industry is
equipped with the resources to successfully
pursue each opportunity that exists in the
industry.
 Threats
• Factors in a company’s external
environment pose threats to its profitability
and competitive well-being
• External threats may pose a degree of
adversity
• Threats to a company may be:

 Emergence of cheaper or better

technologies
Rivals’ introduction of new or improved
products
 the entry of lower-cost foreign competitors
into a company’s market stronghold
new regulations that are more
burdensome to a company than to its
competitors
vulnerability to a rise in interest rates
 the potential of a hostile takeover
unfavorable demographic shifts
adverse changes in foreign exchange
rates
political upheaval in a foreign country
where the company has facilities
It is management’s job to identify the threats
to the company’s future well-being and to
evaluate what strategic action can be taken
to neutralize or lessen their impact.
 SWOT ANALYSIS

Infosys Technologies Limited

 Strengths

•Top Management
•Employee as a business partner
•Quality standards
•Client rooster
•Brand Image
 Top Management
The chairman and CEO Mr. N. R. Narayana
Murthy known as top businessman.
The company’s top management has
established a value system because it believes
that if a corporation wants to run a marathon, it
requires a value system.
The top management has the vision of a global
growth strategy and positions the company as a
learning organization.
 Employee as a business partner
Infosys is also known for its stated objective of
“'WEALTH CREATION FOR EMPLOYEES' .
The employee stock option plan (ESOP) helps them
build their assets. With the ESOP, the employee
becomes a true partner in the growth of the company
and shares in the rewards created by the same.
They even offer a marriage loan to take care of
employee's wedding expenses. Also facility of career
loans.
Infosys has 100 karodpatis and 1800 lakhpatis
working with it including Mr. Murthy’ s driver.
 Quality Standards
The Quality Standards at Infosys match the best in the
world.
It uses a process oriented approach to project execution.
Infosys was the first Indian company to get immediate ISO
9001/TickIt certification from "Bureau Veritas Quality
International (BVQi)".
Infosys has been assessed at Level 5 of the Capability
Maturity Model (CMM) of the Software Engineering
Institute, which evaluates Development, Re-engineering
and Maintenance processes across the enterprise.
Client Rooster
Growth can only come from repeat business and
trust relationships. The company boasts of regular
clientele from MNCs like Nestle, Reebok and
Apple and alliances with global giants like SAP.
It actually plays a strategic role by helping
clients sharpen their edge over competitors.
Brand Image
Infosys has recently declared that it is worth Rs. 1726.9
crores ($411.2 million) as a brand. This is the extra
value that the name grants to the company.
 WEAKENESSES

Concentration on customized software packages.

Dependence on U.S.A. markets.

Lower productivity of employees in global standards

Concentration on customized software packages
Customised software packages mainly account for
the company’s revenue(96%).
This gets rarely gets high media publicity which is
very important for the public image.

Dependence on USA Market

Earnings from the U.S.A. software market
account for four-fifths of the company’s
revenues.
 Lower productivity of employees in global
standards

The current productivity of an Infosys' employee

is US$ 50,000 as against a US industry average of
US$ of 100,000, and US$ 190,000 for Cambridge
Technology Partners, the US industry's most
productive company.

Important point as company is aspiring to be a

global player in the software market.
 Opportunities
Establishing software development centers
in America, Asia (Far East), and Europe.

Growth.
 Establishing software development
centers in America, Asia (Far East), and
Europe

This will give the company 24-hour software

development capability, as it will be operating
in multiple time zones.
 Growth

By raising money through a $75m ADR

(American Depository Receipts) issue to fund its
acquisition and marketing plans, the company
plans to acquire brands/companies in other
markets to fuel growth.
Another aim is to attract global talent by issuing
stock options in convertible currency.
 Threats

Increase in cost.

Increasing competition.

Usage of similar names by unscrupulous

companies.

Government Policies regarding foreign

acquisitions.
Increase in Cost
The reason of the success of the Indian software market is
its cost advantages.

Increasing Competition
Infosys in its path of globalization finds competition
growing both above it and around it.

Usage of Similar Names by unscrupulous Companies

The trademark ‘Infosys’ has been used by many companies.
Government Policies regarding foreign acquisitions

There is currently a capital of $100 million on

automatic approvals on foreign investments.
To get through the procedures of the RBI for
special approvals will result a loss of time and
the possibility of loss of an opportunity.
Mc Donald’s
 McHistory

• Ray Kroc opens the Des Plaines restaurant in

1955. First day’s revenues - $366.12
• In 1965, McDonald’s goes public with the
company’s first offering on the stock
exchange.
• In 1967, Jim Delligatti invents the Big Mac
• “Makadonaldo” first opened in 1971 (Japan)
 McHistory

• Egg McMuffin is introduced in 1973; Developed

by owner operator Herb Peterson
• In 1974 Fred Hill of the Philadelphia Eagles
teams up with McDonald’s to create the Ronald
McDonald House
• Happy Meals (1979)
 Fascinating McFacts
• Today, the company operates more than
23,500 restaurants in 109 countries
• Since its founding in 1955, McDonald’s has
sold well over 100 billion hamburgers
• McDonald’s prepares more than 6.8 million
pounds of French fries every day
• More than 50,000 students have graduated
from “Hamburger University”
 Franchising McFacts

• Approximately 85% of McDonald’s restaurant businesses world-

wide are owned and operated by franchisees.

• All franchisees are independent, full-time operators.

 SWOT Analysis - Strengths

• Brand Equity…world-wide
• 42% of US fast-food hamburger business
• Consistency of food
• Successful items: Fries, Happy Meal, Big Mac,
Egg McMuffin, Promotions
• Overseas market
• Balance sheet position
SWOT Analysis - Weaknesses

• Declining market share

• Weak product development
• Disgruntled franchisees
• Quality and taste of products
 Whose food do Americans really
like best?

Best-tasting food? Best-tasting burgers?

Burger King 42%

Wendy’s 36%*
Wendy’s 32%
Burger King 32%
McDonald’s 17%
McDonald’s 21%
SWOT Analysis - Weaknesses

• Declining market share

• Weak product development
• Disgruntled franchisees
• Quality and taste of products
SWOT Analysis - Opportunities

• International expansion

• Only serving 1% of the world’s population

• Growing dining-out market

 SWOT Analysis - Threats

• Mature/over-stored industry
• Strength of competition
• More health-conscious consumers
• Changing demographics
• Fluctuation of foreign exchange rates;
Economies
COLA WAR
 The Cola War
Introduction
• Coca-Cola and PepsiCo have been the leading soft
drink companies for decades.
• An ongoing battle for market share has existed
between these firms for over 75 years.
• Each company has tried a number of strategies to gain
a sustainable competitive advantage. These strategies
included:
• Introducing new soft drink products
• Diversification
• Aggressive advertising campaigns
 The Cola War
Strengths
• Coca-Cola Company • PepsiCo
– Maintains global soft – Has achieved major
drink industry success with both
leadership beverages and snack
– Positioned as a world- foods
wide company acting – Recent divestment of
locally successful restaurant
– Maintains its major chains allows focus
focus on world-wide on cola wars
expansion of the cola – Has strong “Brand
market Equity”
 The Cola War
Weaknesses
• Coca-Cola Company • PepsiCo
– Relationships with – Must split focus
bottling subsidiaries between managing
could create soft drink lines and
territorial and other snack foods lines
legal problems – Organizational
– Large regional structure for
bottlers may not have international sales of
the financial cola products may
resources to continue not be as strong as
expansion. Coca-Cola’s.
 The Cola War
Opportunities
• Coca-Cola Company • PepsiCo
– World-wide economic
development and
population growth to
sustain sales and profits
– Strong brand names and
world-wide identity as a
leader in the soft drink
industry
– World-wide economic
development and
population growth to
sustain sales and
profits
– Strong brand names
and world-wide
identity as a leader in
the soft drink industry
 The Cola War
Threats
• Coca-Cola Company • PepsiCo
– Political and – Political and
economic instability economic instability
in many developing in many developing
regions of the world regions of the world
– Competition from – Competition from
other national, other national,
regional, and global regional, and global
soft drink Companies soft drink Companies
 MICROSOFT
CORPORATION
 Microsoft Corporation SWOT Analysis
Strengths
World's largest software company with global name
recognition and strong reputation for innovative
products

Revenues and profits rising at 30% a year with

merger/acquisition or investment in 92 companies over
past five years

Loyal, hardworking, and diverse workforce (20%

minority, 26% women) who, in addition to good
compensation, have an opportunity to do well financially
through stock purchases
Windows 95, 98, 2000 series, and Windows NT are
globally known as the PC desktop operating system with
a market share of about 88%

Relatively rapid product development processes that

allow for timely updating and release of new products

Software products have high name recognition, broad-

based corporate and consumer acceptance (Word, Excel,
PowerPoint, Access), and numerous powerful features
that are in use worldwide

Top rating from Fortune for best company to work at

and most admired company .
Weaknesses

Between 1990-1995, Microsoft leadership failed to

correctly anticipate the growth or popularity of the
Internet

Bill Gates has become Microsoft's chief software

architect but has not yet developed a substantially new
line of products

Dependency on hardware manufacturers to pre-install

Microsoft's PC operating system

Downside of product launches and deadlines contributes

substantially to employee burnout
Employee turnover has increased from 6% for a ten
year period to 7.4%

Falling sales in the operating systems and server

software sectors

Little or no significant presence in the wireless market

and Windows CE has been disappointing

 Not a key player in the Internet space and few products

for Internet applications

Products have a single application focus and do not

work well with or on-top of other products
Opportunities
Cheaper global telecommunication costs open new
markets as people connect to the Internet.

Mobile phone applications and exploitation of personal

digital assistants represent a growth industry so that
strategic alliances could provide Microsoft with
opportunity in a market where it currently has little or no
significant presence.

Popularity among people for Internet access

The demand for personal computers in American and

global markets remains strong despite the growth and
increasing popularity of personal handheld devices .
Threats

Apple and Linux threaten Microsoft's 88% market share of

the desktop operating market

Between 1993-95, Sun Microsystems, Netscape, Oracle,

IBM, AOL, and other companies moved into the Internet
space and defined it while Microsoft failed to anticipate its
growth or popularity

Currency exchange rates affect demand for

application/operation software and hardware, and
fluctuating currencies can negatively impact revenues in the
global marketplace
Department of Justice antitrust litigation and current
appeal creates uncertainty among employees since its
outcome is not known

Hardware manufacturers (Sun Microsystems, Oracle,

IBM) have collaborated on new platform technologies
that replicate much of the value of Windows

Growing Linux Influence year by year.

 Rapid development of mobile devices that will

displace/replace personal computers
Software piracy of commercial and consumer
applications software on a global scale threatens
revenue streams

Technology life cycle is shorter and shorter

Unix dominates high-end mission-critical applications

and its customers do not believe Windows can handle
these operations
 References
Strategic Management by Phillips Kotler
Case Study : Cola War By Lon Camomile
College of Business
 Case Study: Mc Donald’s By Bob Wilcox
 Case Study : Infosys By Mr. Srinivas
Business Environment Planning
Thanks for your Patience !!