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Foundation Of Scholarship
MBA International Business
Ketan (000711635-7) 20/2/2012
Abstract In this assignment I have discussed the advantages and disadvantages of using SWOT analysis for developing a corporate strategy. I would like to take this opportunity to thank my tutors for their guidance and support for understanding the subject. Foundation Of Scholarship | (000711635-7) Ketan Patel 2 . The assignment is clearly a study based and part of my course work.
Table of Content 220.127.116.11.1.1. Advantages 3. Examples of SWOT Analysis 4. References Foundation Of Scholarship | (000711635-7) Ketan Patel 3 . The Advantages and disadvantages of SWOT Analysis 3.2. Internal Factors 2. McDonalds Corporation 4. External Factors 3. Conclusion 3 4 4 5 7 7 8 9 9 12 16 17 6. Sony Global Corporation 5. Introduction 2. SWOT Analysis 2. Disadvantages 4.
such as Pest analysis. For my research and study purpose I have selected two companies (McDonalds and Sony) and their area of business are totally different as we are studying these examples to understand their SWOT analysis. So would try to discuss the advantages and disadvantages of actually using the SWOT analysis in the organization. In this assignment I have tried to debate on an important strategic management tool that is SWOT analysis. SWOT analysis is a close study of Internal and External factors affecting the business.Introduction Strategic planners come out with several strategy tools to improve the outcomes of the business. Developing a corporate strategy is a very important job so there are several aspects the planner has to consider while making it. SWOT analysis etc. Further more understanding I would discuss the SWOT analysis using some examples. Foundation Of Scholarship | (000711635-7) Ketan Patel 4 .
SWOT Analysis:SWOT analysis is considered as a strategic tool which proves to be very useful and effective in the process of developing an effective corporate strategy. • Reputed brand names: Now-a-days the customers are becoming more brand conscious. • Strong distribution: The strong distribution network can be real strength as the goods manufactured made available to the market very easily and instantly. The SWOT analysis decides like what may be done to achieve the highest returns or the best for the company’s future. Foundation Of Scholarship | (000711635-7) Ketan Patel 5 . The SWOT analysis is also used to determine the factors that affects the business it mainly concentrates on two factors they are Internal and External factors. • Patents: The companies having large number of patents on their name that means the company have products or services of which no one can provide something similar to that. Internal Factors:1. hence the company has to maintain a good image among customers. It helps one to understand the Strengths. hence a reputed brand name would help increase the sales.1.What are the advantages and disadvantages of using SWOT Analysis to Develop corporate strategy? Discuss using examples related to at least two companies. Strengths The Factors that are within the company’s Limits The Qualities that help to achieve the organizational goal can be termed as the strengths of the company. • Good image among customers: Customers today are getting more concerned about the products they are buying them don’t mind spending on quality products. Opportunities and Threats of any business. It helps you look into your past and help you find out solutions for your present or potential problems a solution. Weakness. helps to capitalize the market. 1.
2. 1. • Special Economic Zones & favorable regulation: Many times government helps the industries by introducing new and favorable legislation which gives them reductions in their taxes. • Low manufacturing capacity: If the product is doing well in the market and the manufacturing capacity is low then the product can’t survive in the market. When the company will be in the market competitions High demands of the products: Demand of products can be considered a huge opportunity as it can boost the production.• High quality and feasible natural resources: The access to good natural resources can be very helpful as it may help in production line. It can reduce the production cost.1. The products manufactured moves out quickly can create more opportunities. Foundation Of Scholarship | (000711635-7) Ketan Patel 6 . 2. • Advancement in technology: Advance technology can boost production and help to reduce the production cost and can save time as well. Opportunities • The factors that affects the company from outside. • New brand not really popular: Brands which are really popular cannot fetch high prices as customer prefer popular. Weakness The Qualities which becomes the obstacles in the way to achieve the goal of the organization. External Factors:2. • No good relations among employees: Organization has to maintain good relations among their employees as to keep their production and services up-to-date. • High product cost: More the product cost can be lower the profit or higher products price this can be real weakness.
Finding down the core strengths and weakness of the organization is very important as it will help to improve the future aspects of the organization. Threats • Tight competition: threat to the organization. While using the SWOT analysis the analyst has to be very realistic by using the exact measures and the exact figures of the research. • Frequent changes in policies: As of the government are being very fluctuating with the policy making the organizations strategy gets disturbed. • Varying customer’s taste: It totally depends on the trend or fashion as they change the demand may change as well. The advantages and disadvantages of the SWOT analysis: Advantages: Foundation Of Scholarship | (000711635-7) Ketan Patel 7 . The person working on the SWOT analysis should be the one who knows well about the market segment and the company for which he is doing the analysis.2. Market is getting very tight day by day as there are every day new products and services introduced by the competitors so it has become a • Changing customer demands: It’s really an unpredictable threat as the customers demand can get changed anytime it’s solely on the human behavior.2.
hence it doesn’t involves too much of cost. this way it helps creating new ideas. Initial SWOT analysis helps one to understand the opportunities hence it makes the organization to be ready to grab the opportunity. Hence we know where we actually stand. Even it helps the investor or proprietor to know how much of initial cost they require to run business. Core Competencies: It helps to identify the major competitors so that the organization can do a detail research on products of their major competitors. SWOT analysis is very simple so any one with the knowledge about the business can do it. Cost: As SWOT analysis is just some paper work based on the research work. it also has drawbacks some of them are as follows: Foundation Of Scholarship | (000711635-7) Ketan Patel 8 . Innovate new ideas: It really helps producing new innovative ideas as it helps highlighting the weaknesses so people start think to rectify the problem. Know where you stand: It helps us looking at the past and present so that we can try to figure out our future. Responsiveness: It creates responsiveness among the organization as creates awareness about the environmental and political threats by having a plan of action ready.Clarity: The biggest advantage of the SWOT analysis is that it gives the clarity to summarize the flow of the business process. Setting goals and objectives: It also helps in setting new goals by analyzing the strengths and after looking towards the opportunities can set new objectives. Disadvantage: SWOT analysis can be very helpful if being properly used. so it’s not necessary that we need to hire a professional strategist or marketing advisor.
It can be just considered as a help for making dicisions. or the same factor can be considered as the opportunity or threats.Misleading: The SWOT analysis can be sometimes misleading as it is not always done by the researchers or the most experienced so inappropriate research input cannot give the best outcome. Some factors such as price rise. but no strategic decision can be derived from it. Ambiguity: Many times it happens that the same factors can be considered as the strength and the weakness of the organization. Process: It cannot be termed as the end but it’s just a small part of the process of strategy development. the Pizza hut stores are available at almost every area so it is quickly available but the opening large number of stores costs a lot hence its pizzas are even costlier as compared to the local pizza shops. Too Focused: damages. Lengthy Lists: It produces a lengthy list for all the strengths and weakness faced by the organization. Uncontrollable factors: but are uncontrollable factors. change in government legislation. For example. some of the weakness may seriously affect the competitive advantage of the company. environmental factors etc. are some factors which affects the organization Examples on SWOT analysis:SWOT analysis has been utilized by several big and small firms for now we would look into two examples for further understandings and they are: Foundation Of Scholarship | (000711635-7) Ketan Patel 9 . It is too focused within their industrial boundaries and might miss the weakness or important points which can help restructure the organization or can avoid serious economic condition. For example. while some weakness may have less detrimental effect.
its Strengths. • They stretch themselves very hard to maintain food safety. Hence the bases of my experience and research I have prepared the following SWOT analysis. McDonalds was first started in United States in 1940. For example. McDonalds Corporation McDonalds is one of the leading fast food retailers with largest chain of fast food restaurants serving 119 countries around the world. eggs from farm raised chicken. Weakness. Over 2000 inspection checks are being done to make sure the food is safe to eat. • Different varieties of burgers as per the regional demand. Opportunities and Threats. London. they have the ability to sustain any fluctuations in the local region. In India they making lamb burgers as the Hindu tradition do not allow them to eat beef. So McDonald’s management does not have to be at every single store to manage. • Maximum numbers of McDonald’s stores are being franchised and they are being independently managed by the franchise owner. • They use only branded food products at their restaurant to maintain their quality standards for their products. • They have very systematic and well maintained food preparation process in every store to ensure a smooth and flawless food supply and service. I have chosen McDonalds for my research work as I have worked with McDonalds as a crew member at Victoria.1. I would like to discuss about the SWOT analysis of McDonalds. 100% pure USDA inspected beef. Strengths: The strengths of the McDonalds due to which they are gaining the global leadership in the fast food chain restaurants are as follows: • As they are being found all around the world in different regions and weather. For example. Foundation Of Scholarship | (000711635-7) Ketan Patel 10 .
• As the franchise has to pay a share to the McDonalds form the profit which makes the franchise to control their cost. as the cost they can control is only the human resource so they stress employee to work harder than they can which affects their productivity and services. Olympics. Providing industries with canteen services like restaurants in the industries premises.• McDonalds are the first food chain restaurants to provide the nutritional value of the food they serve. Opportunities: • New health conscious menu like healthy hamburger. Football events can make them more popular and increase their sales. • As the part timers are not very serious with their job so there may be negligence at their work. salads can be a great opportunity to attract the health conscious customers. tasty and cheap would really do well in there. Weakness: Even though McDonalds is such a huge fast food restaurant it does have some of weakness such as: • High employee turnover rate as it employees almost students on part time basis so they are not very committed towards their jobs. • Their pizzas marketing failed which de-motivated them in competing to the fast food pizza chains. • As their increasing popularity around the world got good opportunity to cater huge events like Cricket world cup. The areas were McDonalds can improve their performance. as their food is made quick. • Their fluctuating operating profit and net profits are affecting their investor relation. • • Providing optional food for the allergic people. Foundation Of Scholarship | (000711635-7) Ketan Patel 11 .
is one of the leading electronics companies majorly dealing in Laptops. opportunities and threats. • Their free toys with child’s meal are also creating trouble for them as the parents blame McDonalds for enticing their kids. Sony Global Corporation Sony Corp. and even the quality of the toys has also been an issue for McDonalds. etc. IPods. KFC. Threats: • Been sued by several people for unhealthy food which creates a negative effect in customers mind. • Huge competition as it has to compete with major competitors like Burger King. The above mentioned factors play important role in developing a corporate strategy. • As it is a food industry has to be extra careful for the food contamination. Mobile phones. weakness. This was a SWOT analysis on the McDonalds looking at this analysis we can know the strengths. Wendy’s etc. Cameras. Sony is also very popular brand in entertainment related products Foundation Of Scholarship | (000711635-7) Ketan Patel 12 .• More and more drive through in the busy or commercial areas can be really helpful. even small time chicken shops are competing with them. 2.
that has high demand in this computer age. which has helped their engineers to gain knowledge and confidence and to implement and produce better quality electronics products. video.having a huge goodwill. Weaknesses Foundation Of Scholarship | (000711635-7) Ketan Patel 13 . which has helped them to be the best in this emerging market? • With growth comes more pressure. and is coming up with new and improved ideas for their new line of goods. and in this competitive market they have managed to stay on. communicating and information technology products for consumer and commercial purpose. with their qualities of products customers can bank upon for their needs. by not compromising on their standards. With Sony Corporation customers are always satisfied with their products and services. • History of products shows that the business is very trustworthy and has immense resources to keep up with customers demand.Sony has still managed to lead in electronic market and has kept on producing the best. Sony is a Japanese company was established in 1946. • The company has expanded itself to a global level and produce the best quality products. and they are improvising in their existing products to improve and enhance its sales. which is making it difficult for various other companies to keep up to their standards . Strengths • Sony is able to create high quality products for its customers. • Sony has always been a tough competitor in the global market. Sony has now become a global manufacture of audio.
and this has had an adverse effect on the company’s reputation. and in this inflation hit market purchase of electronics goods is seemingly low. • Company’s sales are going down due to increase in the cost of their production of goods which leads to increase in the prices of products. And the company also had drawbacks. • The functional departments within the organisation are not communicating with one another and so productivity has decreased. which ultimately is the cause of company’s breakdown. • The company is not properly managed which is leading in poor performance and its sense of direction is bad too and so its growth is slowing down and its getting tough for the corporation to keep up to the pace. as they managed to merge with Ericsson and get a line of Sony ericsson phones in the market but unfortunately had to fall down on telecom department. Foundation Of Scholarship | (000711635-7) Ketan Patel 14 . Opportunities • The engineering department has increased in size and so therefore are working harder and faster to boost company’s growth and with more staff on board there is always more opportunities for new and innovative ideas to create new products and to improvise in the old ones.• In past years Sony has managed to lose its potential in the global market. and has never copied their competitors so has a good reputation in the market and with new and improved thoughts the company has the ability to produce a better variety of goods. by increasing their production cost. • And the company has a history of organising and implementing their own ideas.
• Sony is also trying to reduce their prices on better quality goods. the Sony should learn from their mistakes and implement strategies for more effective and efficient result. Foundation Of Scholarship | (000711635-7) Ketan Patel 15 .• The company’s marketing team has increased their advertising skills and techniques which is helping the company to attract more customers towards them. alternatives strategies should become another major concern for Sony to ensure that they can effectively rebuild their poor character and get back more market share in the future. Finally. and Apple is making their mark in every aspect of electronics good and they are doing good. which is a big threat for Sony. which has helped them to get more sales and also more profit. and this is a very good opportunity for Sony to grow in the market. if they want to exit the current unfavorable conditions. that are giving them opportunity to attract more customers to them. Besides than their current strategies. Threats • In this growing economical market. and now a day’s all the countries are giving new companies a prospect to establish with them. • The company also has opportunity to grow in market overseas. • Risk management and disaster control are also important for Sony to consecutively stay aware and increase their awareness to possible threats. and in this high priced market people go for cheap but better quality products and so they opt for this company as it meets to consumer’s needs and requirements. Sony has to face a very tough competition. And in today’s world their biggest competitors is Apple.
SWOT Analysis is a good tool for an initial purpose for making a small research with investing low cost and time for it as hiring a professional researcher and spending a real time on it would not help deriving a decision to be made for corporate strategy. Foundation Of Scholarship | (000711635-7) Ketan Patel 16 .Conclusion After studying SWOT analysis carefully and looking on its merits and demerits it seems not the accurate or the most perfect option for developing a corporate strategy.
html [Accessed: 10th February 2012]. Hence it is only used for temporary process and cannot rely on it completely. inc. 1999-2012. eHow money. References Anthony Henry 2008. New York. Available at: http://www. United States: Oxford University Press Inc. Foundation Of Scholarship | (000711635-7) Ketan Patel 17 . Understanding Strategic Management.com/list_6157124_advantages-disadvantages-swot-analysis..ehow. Demand Media.In the above cases the small study on SWOT of the McDonalds and Sony does not help me take any proper decision or make some major changes in the strategy of the organization.
Investopedia ULC.asp#axzz1m47jl9Pf [Accessed date: 12th February 2012].investopedia. Foundation Of Scholarship | (000711635-7) Ketan Patel 18 .html [Accessed Date: 10th February 2012] Scribd Inc. Available at: http://marketingteacher. 2012 available at: http://www. Available at: http://www.com/terms/s/swot.2012.com/doc/26203913/Sony-Corporation-PEST-SWOT-Analysis [Accessed date: 18th February 2012].scribd. 2000-2012.com/swot/mcdonalds-swot. Marketing Teacher ltd.
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