What Is SWOT Analysis?

SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. By definition,

Strengths (S) and Weaknesses (W) are considered to be internal factors over which you have some
measure of control. Also, by definition, Opportunities (O) and Threats (T) are considered to be
external factors over which organizations have essentially no control.

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to

evaluate a company's competitive position and to develop strategic planning. SWOT analysis
assesses internal and external factors, as well as current and future potential.

A technique that enables organizations or individual to move from everyday problems and
traditional strategies to a fresh prospective. SWOT analysis looks at your strengths and
weaknesses, and the opportunities and threats your business faces. SWOT can help your company
face its greatest challenges and find its most promising new markets

SWOT Analysis is the most renowned tool for audit and analysis of the overall strategic position
of the business and its environment. Its key purpose is to identify the strategies that will create a
firm specific business model that will best align an organization’s resources and capabilities to the
requirements of the environment in which the firm operates.

In other words, it is the foundation for evaluating the internal potential and limitations and the
probable/likely opportunities and threats from the external environment. It views all positive and
negative factors inside and outside the firm that affect the success. A consistent study of the
environment in which the firm operates helps in forecasting/predicting the changing trends and
also helps in including them in the decision-making process of the organization.

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths
and weaknesses of an organization, its initiatives, or an industry. The organization needs to keep
the analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on real-
life contexts. Companies should use it as a guide and not necessarily as a prescription. SWOT
Analysis provide information that helps in synchronizing the firm’s resources and capabilities with
the competitive environment in which the firm operates.

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 SWOT ANALYSIS FRAMEWORK

KEY TAKEAWAYS:

 SWOT analysis is a strategic planning technique that provides assessment tools.

 Identifying core strengths, weaknesses, opportunities, and threats lead to fact-based
analysis, fresh perspectives and new ideas.
 SWOT analysis works best when diverse groups or voices within an organization are free
to provide realistic data points rather than prescribed messaging.

Here are some questions to ask in order to get a better idea of your company’s strengths,
weaknesses, opportunities and threats. Add other questions that may be relevant for your business
and industry to create a SWOT analysis template that fits the corporate strategy.

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Strengths (Internal Factors) Weaknesses (Internal Factors)

 What are we really good at?
 What are our best and unique skills?
 What internal talent do we have (staff)?
 What other resources do we have (funds)?
 What are our advantages over competitors?
 What does our company lack (staff talent, funds,
good location)?
 What departments or sections within the
company are lagging behind?
 Where are we losing time and money?
 What skills aren’t up to the mark?

Opportunities (External Factors) Threats (External Factors)

 What are the market opportunities that we have?

 What expertise do we lack in our efforts to use
 What are the changes in our external opportunities?
environment that we can take advantage of
 What is it that our competitors are doing better
(changing laws, changing customer
than us?
preferences)?
 What’s happening in the economy or industry
 Can we tap into new customer categories?
that can adversely affect us?
 Are there related businesses (products or
 What are our biggest obstacles?
services) that we can get into?

Advantages of SWOT Analysis:

A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have
everyone in the room to discuss the company's core strengths and weaknesses and then move from
there to define the opportunities and threats, and finally to brainstorming ideas. Oftentimes, the
SWOT analysis you envision before the session changes throughout to reflect factors you were
unaware of and would never have captured if not for the group’s input.

A company can use a SWOT for overall business strategy sessions or for a specific segment such
as marketing, production or sales. This way, you can see how the overall strategy developed from
the SWOT analysis will filter down to the segments below before committing to it. You can also
work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.

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Limitations of SWOT Analysis:

SWOT Analysis is not free from its limitations. It may cause organizations to view circumstances
as very simple because of which the organizations might overlook certain key strategic contact
which may occur. Moreover, categorizing aspects as strengths, weaknesses, opportunities and
threats might be very subjective as there is great degree of uncertainty in market. SWOT Analysis
does stress upon the significance of these four aspects, but it does not tell how an organization can
identify these aspects for itself.

There are certain limitations of SWOT Analysis which are not in control of management. These
include-

a. Price increase;
b. Inputs/raw materials;
c. Government legislation;
d. Economic environment;
e. Searching a new market for the product which is not having overseas market due to import
restrictions; etc.

Internal limitations may include-

a. Insufficient research and development facilities;

b. Faulty products due to poor quality control;
c. Poor industrial relations;
d. Lack of skilled and efficient labor; etc

Example of SWOT Analysis

In 2015, a Value Line SWOT analysis of The Coca-Cola Company noted strengths such as its
globally famous brand name, vast distribution network and opportunities in emerging markets.
However, it also noted weaknesses and threats such as foreign currency fluctuations, growing
public interest in "healthy" beverages and competition from healthy beverage providers.

Its SWOT analysis prompted value line to pose some tough questions about Coca-Cola's strategy,
but also to note that the company "will probably remain a top-tier beverage provider" that offered
conservative investors "a reliable source of income and a bit of capital gains exposure."

 Strengths describe what an organization excels at and what separates it from the
competition: a strong brand, loyal customer base, a strong balance sheet, unique
technology, and so on. For example, a hedge fund may have developed a proprietary
trading strategy that returns market-beating results. It must then decide how to use those
results to attract new investors.
 Weaknesses stop an organization from performing at its optimum level. They are areas
where the business needs to improve to remain competitive: a weak brand, higher-than-
average turnover, high levels of debt, an inadequate supply chain, or lack of capital.

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 Opportunities refer to favorable external factors that could give an organization a
competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export
its cars into a new market, increasing sales and market share.
 Threats refer to factors that have the potential to harm an organization. For example, a
drought is a threat to a wheat-producing company, as it may destroy or reduce the crop
yield. Other common threats include things like rising costs for materials, increasing
competition, tight labor supply and so on.

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Strengths in the SWOT analysis of Reliance Jio :

Strengths are defined as what each business does best in its gamut of operations which can give it
an upper hand over its competitors. The following are the strengths of Reliance Jio:

 Strongest Customer Acquisition strategy – Reliance Jio probably has the best customer
acquisition strategy till date. The brand offered their services for free for 3-6 months to all
their users. This resulted in millions of users using Reliance Jio and resulted in one of the
best customer acquisition strategy in the history of telecom.
 Strong customer base – Jio boasts of a whopping 100 million subscribers in the first 170
days of its launch a record which no other provider has been able to register. This has also
made Reliance Jio India’s largest Internet Service Provider.
 Technology – Jio currently uses the latest 4 G LTE technology which is one of the world’s
best technologies for the future. This is supported by Voice over LTE which makes it
scalable and supportive of 5G and 6 G technologies which are expected to be the future in
wireless communication.
 Strong backing of parent company Reliance Industries: Reliance Industries is a credible
brand which echoes with Indian sentiments and has high trust amongst customers. The
association of Jio with Reliance acts as a core strength.
 Brand Management – The reason for the huge customer base of Reliance Jio is the brand
management strategies that it has adopted. The right promotion backed by lucrative offers
and credible brand ambassadors like ShahRukh Khan and Amitabh Bachchan have helped
in building connectivity with the customers.
 Fast and wide network – Reliance Jio has a presence in all 22 telecom circles in India and
is known to be a robust and fast network with zero connectivity issues.
 Multiple offerings under a single name – Reliance Jio offers a variety of services like
movies, games, shopping, chats, and messenger etc. giving the customer a lot of options to
choose from.

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Weaknesses in the SWOT analysis of Reliance Jio :

Weaknesses are used to refer to areas where the business or the brand needs improvement. Some
of the key weaknesses of Reliance Jio are:

 Late entry into the market: Reliance Jio has made a late foray into the market which
already had established players like Airtel and Vodafone who had occupied a place in the
minds of the customer.
 Activation Issues – Reliance Jio faced numerous gestation issues owing to not being able
to contain the huge volumes of customers it had acquired. On such was delays in SIM Card
activation during the period that followed its launch.
 Pricing Controversies – Reliance Jio was criticised for having lowered its prices beyond
what was ethical to penetrate into the market and this stirred allegations like corruption and
money laundering against them.
 Too many freebies – Reliance Jio currently offers many services for free and this was one
reason for share increase in sales. However, the company may not be able to afford all of
them in the long run which may affect the business negatively.
 Data connection poor – The data connection is many times poor from Reliance Jio and the
range is less causing slower loading speeds in selected regions.

Opportunities for the SWOT analysis of Reliance Jio :

Opportunities refer to those avenues in the environment that surrounds the business on which it
can capitalize to increase its returns. Some of the opportunities include:

 Future driven technology – Reliance Jio uses VoLTE 4G network which is scalable to
accommodate
 5G and 6G technologies.This offers numerous avenues to Jio or future expansion of
bandwidth.
 Apps – Reliance Jio has VoLTE which has a lot of scope in terms of bandwidth.Thus they
can offer apps to customers which are chargeable or even free initially and pay per use later.
 Competitive Pricing Strategies – Reliance Jio prides itself on being a low-cost Internet
service provider and mobile operator. This can be used as
a positioning to target more markets and grow their market share since most of their
competitors’ cannot afford their prices.
 Expansion to other countries – Currently Reliance Jio is operational only in India. There
is, however, a lot of scope for expansion to foreign countries at least in the neighboring
regions.

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Threats in the SWOT analysis of Reliance Jio :

Threats are those factors in the environment which can be detrimental to the growth of the business.
Some of the threats include:

 Risk of loss of customers – Customers prefer Jio primarily because of the low prices that
they offer. At a stage when the company increases its price there may be a loss of customers.
 Removal of free services – Jio currently is associated with a lot of freebies.Once these are
removed there may be a drop in sales for the company.
 Criticism and negative image – Reliance Jio has been embroiled in a lot of controversies
from the time it was started. These have resulted in a negative brand image for the company.
 Poor Code of ethics – Many of the strategies adopted by Reliance Jio such as the low
pricing, free bandwidth and market penetration strategies have been showcased as unethical
and this may affect the goodwill of the business in the long run.