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SWOT Analysis

A tool that identifies the strengths,

weaknesses, opportunities and threats of an
organization.

Specifically, SWOT is a basic, straightforward

model that assesses what an organization can
and cannot do as well as its potential
opportunities and threats.

The method of SWOT analysis is to take the

information from an environmental analysis
and separate it into internal (strengths and
weaknesses) and external issues
(opportunities and threats).

Once this is completed, SWOT analysis

determines what may assist the firm in
accomplishing its objectives, and what
obstacles must be overcome or minimized to
achieve desired results.

PESTEL Analysis
PESTEL analysis is a tool used by companies to analyse the
environment in which they operate

Political :- These factors determine the extent to which a

government may influence the economy or a certain
industry.
Economic :- Rise in the inflation rate would cause
companies to increase prices
Social : - These factors scrutinize the social environment of
the market, and gauge determinants like cultural trends,
demographics, population analytics etc.
Technological :- These factors pertain to innovations in
technology that may affect the operations of the industry
and the market favourably or unfavourably
Environmental : - These factors include all those that
influence or are determined by the surrounding
environment.
Legal :- There are certain laws that affect the business
environment in a certain country.

Porters Five Forces

In an existing industry, market entry and survival is
determined by various forces that prevail in the industry.
The main five factors or forces that drive competition:

Competitors: In a competitive environment, firms

decision is highly influenced by what the competitors
do.

Barriers to Entry: The threat of new entrants to the

market determines the sustainability of market share.
It is evaluated in terms of market entry barriers which
may be in the form of high fixed cost, product
differentiation etc.

Substitutes: There is always a threat of substitute

products replacing the existing product(s) of a firm.

Suppliers: A competitive market with limited suppliers

brings with it high level of bargaining power of
suppliers.

Buyers: Multiple products of same category gives the

buyers an advantage in bargaining, thus high
bargaining power of buyers exists in multi-brand
products.

Value Chain Analysis

Value Chain Analysis describes the activities that take place in a business and relates
them to an analysis of the competitive strength of the business. The activities of a
business could be grouped under two headings:

Primary Activities activities that are directly concerned with creating and delivering
a product or service (e.g. component assembly). Primary activities are broken down
further into inbound logistics, operations, outbound logistics, marketing and sales,
and after-sales service
Support Activities These activities are not directly involved in production, but may
increase effectiveness or efficiency. Support activities include procurement of
inputs, development of technology and human resources management, and
general firm infrastructure.

BCG Matrix
The matrix, developed by Boston Consulting Group
in the early 1960s is used to plan market strategies.

Growth rate is determined by reference to market

research, or it can be estimated.
Competitive position includes an assessment of
the firms overall market penetration and
profitability compared to the other players in that
market. Products are then positioned in the four
cells as shown in the figure.

Cash Cows: - Large Market Share in a mature

industry. Requires little investment.
Star: - Larger Market Share in a growing industry.
May require investment to maintain lead.
Question Marks: - Small Market Share in a
growing market, Requires focus and resources.
Dog: - Small Market Share in a Mature industry.
Little prospect for gain.

All the Best!!