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Swot Analysis

Swot Analysis

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Published by Nikita Dhoot

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Published by: Nikita Dhoot on Apr 14, 2011
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11/19/2012

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SWOT Analysis

A Planning and Organizing Tool Strengths Weaknesses Opportunities Threats
Miss. Nikita Dhoot
Department of Management Studies, DKTE¶S Textiles & Engineering Institute, IchalkaranjiKolhapur-Maharashtra

What is SWOT Analysis ? 
A systematic approach to environment is the SWOT analysis. understand the 

A technique that enables a group or individual to move from everyday problems and traditional strategies to a fresh perspective  Situation analysis in which internal strengths and weaknesses of an organization, and external opportunities and threats faced by it are closely examined to chart a strategy.

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SWOT is an Acronym for :
S ± Strengths
Internal Environment

W ± Weaknesses O ± Opportunities
External Environment

T - Threats

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Diagrammatic Representation
Potential Resource Strengths and Competitive Capabilities Potential Resource Weakness and Competitive Deficiencies

A
Potential Company Opportunities

B
Potential External Threats to Company s Well-Being

C

D

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STRENGTH
Any existing or potential resources or capability within the organisation that provides a competitive advantage in the market. Example:
‡ Strong distribution network ‡ Intense staff commitment and loyalty ‡ Increasing profit margin

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WEAKNESS
Any existing or potential force which could serve as a barrier to maintain or achieve a competitive advantage in the market. Example:
‡ Lack of clear company strategy ‡ Weak brand image and reputation ‡ High overall unit costs

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OPPORTUNITY
Any existing or potential force in the external environment that, if properly leveraged, could provide a competitive advantage. Example: ‡ Organization's geographic location ‡ New technology ‡ Acquisition of rival firms

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THREAT
Any existing or potential force in the external environment that could erode a competitive advantage. Example:
‡ A new competitor entrant ‡ A recession and rising interest rate ‡ Slowdown in market growth

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Aim of SWOT Analysis
1. Take advantage of strengths and opportunities 2. Minimizes weaknesses and eliminate threats

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Who needs SWOT analysis?
A. Company
‡ When revenue, cost and expense targets are not being

achieved
‡ Market share is dropping ‡ Industry conditions are unfavorable ‡ Want to launch a new business venture

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Contd ..
B. Department/ Business Unit
‡ When the team has not met its target; ‡ Customer service can be better; ‡ A new business unit to pursue a new business; ‡ A new team leader is appointed; etc

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Contd ..
C. Job Holder
‡ When supervisor has issues with work output; ‡ Assigned to a new job; ‡ New financial year fresh targets; ‡ Job holder seeks to improve performance on the job; etc

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Significance of SWOT
SWOT Analysis helps in strategic planning in following manner1. It is a source of information for strategic planning. 2. It helps in setting of objectives for strategic planning. 3. Builds organization s strengths. 4. Reverse its weaknesses. 5. Maximize its response to opportunities. 6. Overcome organization s threats. 7. It helps in identifying core competencies of the firm. 8. It helps in knowing past, present and future so that by using past and current data, future plans can be chalked out. 9. SWOT analysis may be used in any decision-making 10. Guides strategists in strategy identification 11. Helps to gain competitive advantage
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Limitations of SWOT
There are certain limitations of SWOT Analysis which are not in control of management. These include1. Price increase; 2. Inputs/raw materials; 3. Government legislation; 4. Economic environment; 5. Searching a new market for the product which is not having overseas market due to import restrictions; etc. Internal limitations may include1. Insufficient research and development facilities; 2. Faulty products due to poor quality control; 3. Poor industrial relations; 4. Lack of skilled and efficient labour; etc

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SWOT Analysis of ITC Hotels

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Strengths
1. 2. 3. 4. 5. Strategy: differentiation strategy. Structure: flat, decentralized Skills: service skills Style: strong, participative culture. Staff: specialized, experienced, welltrained 6. Shared Values: clear and well communicated. 7. Reputation: a strong reputation

Weaknesses
1. Strategy: clear communication reqd 2. Staff: seasonal turnover requires ongoing training and orientation of new staff. 3. Facilities: certain rooms require renovation and upgrade

Opportunities
1. Market: returning growth after a period of slump. 2. Competitors: no direct competition exists at present, in terms of the five star 'boutique business property' niche. 3. Suppliers: strong, long-term relationships established with suppliers. 4. Guest Dependency: repeat corporate business based on personal service and quality, in a small but luxurious environment.

Threats
1. Market Entry: potential for a competitive, global brand to enter the market with a similar product. 2. Substitutes: fully furnished and serviced business apartments offering lower daily rates. 3. Economy: recovery from slight recession may take time.
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SWOT Analysis of PIZZA HUT

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Strengths
1. Focus on their products and services 2. Ambience & Facility 3. On-going efforts of the restaurant to provide the healthier pizza 4. Product reinvention did not stop

Weaknesses
1. Largest users of cheese - lacks the supply of cheese. 2. High cost of production

Opportunities
1. Product innovation. 2. Increase in Brand Loyalty 3. Expansion of the varieties 4. Online-ordering system. 5. Honest & real brand image

Threats
1. High competition - boost up the needed investment 2. Concerned with their customer satisfaction 3. Local fast food restaurants 4. Unhealthy food for children
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SWOT Analysis of WALT DISNEY

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Strengths
1. Strong financial background 2. Exclusive for Disney s products 3. Well-known brand

Weaknesses
1. Unchanged visual merchandising 2. Stores are lack of theme decoration 3. Passive staff s attitude

Opportunities
1. Solo Tour 2. Opening of Hong Kong Disneyland

Threats
1. Competition with the Disney Store in the theme park 2. Decreasing birth rate

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Conclusion 
The SWOT is a clear and easily understandable tool for presenting a

set of influencing factors and their interdependency. 
It is not simply enough to identify the strengths, weaknesses,

opportunities, and threats of a company. In applying the SWOT analysis it is necessary to minimize or avoid both weaknesses and threats. 
Weaknesses should be looked at in order to convert them into

strengths. Likewise, threats should be converted into opportunities. 
Lastly, strengths and opportunities should be matched to optimize the

potential of a firm.
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About MBA-DKTE««
Brief Profile of The Institute
DKTE¶s Textile & Engineering Institute enjoys a unique and prominent place amongst the institutions that are engaged in education, training, research & consultancy. Capitalizing on our experience and goodwill in textile and engineering, the department of management studies was set up. Currently it offers Two Years full time MBA course with specialization in areas such as Marketing, Finance, HR, Systems and Production and Textile Management.

Document prepared by, The Department of Management Studies, DKTES Ichalkaranji. Dist. Kolhapur. 0230-2421300 Ext. 316 Mail your valuable feedback at niki_dhoot89@yahoo.in

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