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SWOT Analysis
SWOT Analysis
!
Weakness Opportuniti
Strengths es
Threats
es
SWOT Analysis
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Introduction
• SWOT analysis technique was found by Albert Humphrey who led a research
project at Stanford University in the 1960s and 1970s.
• He used the data from Fortune 500 companies to identify why corporate
planning failed.
• His research identified a number of key areas that were critical to corporate
planning and the tool used to explore each of the critical areas was called SOFT
analysis.
• Albert Humphrey and the original research team used the following
categories:
“What is good in the present is Satisfactory, good in the future is an
Opportunity; bad in the present is a Fault and bad in the future is a Threat.”
• In 1964, at a conference the F in ‘SOFT’ was changed to a W, and thus, the
emergence of ‘SWOT’ Analysis as we know it today came into existence.
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
What is SWOT Analysis?
SWOT Analysis is a technique founded by Albert Humphrey who led a research
project at Stanford University in the 1960s and 1970s.
S W
O T
What is SWOT Analysis?
S W Strengths are:
T
Weaknesses
S W Weaknesses are:
S W Opportunities are:
• Chances to make greater profits in the
environment.
• External attractive factors that
O T represent the reason for an
organization to exist and develop.
• Condition of the environment that
benefits the organization in planning
and executing strategies that enable it
to become more profitable.
T
Threats
S W Threats are:
• External elements in the environment
that could cause trouble for the
business.
O T • External factors, beyond an
organization’s control, which could
! place the organization’s mission or
operation at risk.
• Conditions in external environment
that jeopardize the reliability and
profitability of the organization’s
business.
Threats compound the vulnerability when
! they relate to the weaknesses. Threats are
uncontrollable. When a threat comes, the
stability and survival can be at stake.
Threats
O •
•
Increased government regulation
Economic slowdown
T
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Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Objectives of SWOT
The main objective of SWOT is analyzing the following:
Strengths Weaknesses
S (based on
analysis of):
(based on
analysis of):
W
• Strategies • Strategies
• Restriction & • Restriction &
Control Control
• Performance • Performance
Threats
O Opportunitie
s (based on (based on T
analysis of): analysis of):
• General Environment • General Environment
• Industry Environment • Industry Environment
• Main Competitors • Main Competitors
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Who needs SWOT Analysis?
SWOT Analysis is useful for various aspects from the perspective of the following:
Job Holder:
Company:
nal Fa c tors
Inter
• The strengths and
weaknesses
internal to the
organization. External
Factors
• The opportunities
and threats
presented by the
external environment
Let us look at each in detail. to the organization.
Internal Factors
•
The internal factors may be viewed as strengths or
weaknesses depending upon their impact on the
organization's objectives.
•
The external factors are out of the organization’s control,
such as political and economic factors, technology,
competition, and other areas.
Quadrant 1 —internal
strengths matched with
external opportunities
Strengths and Opportunities
Quadrant 2 — internal
weaknesses relative to
external opportunities
Strengths and Threats
Quadrant 3 —internal
strengths matched with
external threats
Weaknesses and Opportunities
Quadrant 4 —internal
weaknesses relative to
external threats
Weaknesses and Threats
Apply - take
Activate – identify
Aim – is the action
the strengths or
Goal or measures of
Assess – is the
objective success & use
SWOT review
itself them to
advantage
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Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
TOWS Analysis
A TOWS analysis involves the same basic process of listing strengths, weaknesses,
opportunities and threats as a SWOT analysis. However, in a TOWS analysis, threats
and opportunities are examined first and weaknesses and strengths are examined
last. After creating a list of threats, opportunistic, weaknesses and strengths,
managers examine ways the company can take advantage of opportunities and
minimize threats by exploiting strengths and overcoming weaknesses.
Thus, you can see that both SWOT and TOWS analysis involve the same basic steps
and so may likely produce similar results. However, the order in which managers
think about strengths, weaknesses, threats and opportunities may make a different
impact on the direction of the analysis. This is because focusing on threats and
opportunities first helps lead to productive discussions about what is going on in
the external environment. So, you do not just start by concentrating on abstract
discussions about what a company is good at or bad at.
TOWS Analysis
Roll your mouse over TIP!
the “Tip!” icon, to
learn more.
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A TOWSSSanalysis
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e thhee ssaam meanalysis.
opportunities llyyssisis.threats
. SSWW O T as a SWOT e ffaaccttoorrss However, in a TOWS analysis, threats
ssoom a
OT anndd TTOOW WSSand
aarree weaknesses and strengths are examined
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wwitithh oouutt rreeggaaardlist terchhaannggeeaabbly
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ssttrreenexamine e
e o r d
ordeerr tthhaattcan take advantage of opportunities and
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eess aexploiting ats aannddand overcoming weaknesses.
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arree eexxaam miinneedd..
Thus, you can see that both SWOT and TOWS analysis involve the same basic steps
and so may likely produce similar results. However, the order in which managers
think about strengths, weaknesses, threats and opportunities may make a different
impact on the direction of the analysis. This is because focusing on threats and
opportunities first helps lead to productive discussions about what is going on in
the external environment. So, you do not just start by concentrating on abstract
discussions about what a company is good at or bad at.
Tip
Matching and converting is one way of utilizing SWOT.
SW
STRENGTHS WEAKNESSES
• Powerful retail brand & good reputation • Control problems due to its
• Provides value for money sheer size of being the World’s
• Wide range of products largest grocery retailer
• Efficient procurement • Despite its IT advantages, it faces some weak areas
• Substantial growth over recent years due to the huge span of control
• Experience of global expansion • Lacks focus unlike some of its competitors due to
• Good use of information technology to support various products across many sectors
its international logistics system • The company is global, but it only has a
• Focused strategy for human resource management presence in relatively few countries
and development SWOT Worldwide
Analysis of
• To take over, merge with, or form • Exposure to threats of political
Wal-Mart problems in the local countries that
strategic alliances with other global
retailers Wal-Mart operates in
• Focus on specific markets such as Europe • Being the constant target of competition, locally
• Opportunities for future business in expanding and globally due to its being number one in the
consumer markets, such as China and India. World
• Looking for new locations and different store • Competition due to lowered manufacturing costs
types due to outsourcing to low-cost regions
of the World
• Price competition which results in price
OPPORTUNITIES deflation in some ranges THREATS
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Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Quadrant Combinations
The challenge of SWOT is the matching of specific internal and external factors,
which creates a strategic matrix and which makes sense. The four combinations
of the various factors of SWOT were described by Weihrich in 1982 as follows:
1. 2.
Maxi-maxi Maxi-mini
(strengths/opportunities) (strengths/threats)
3. 4.
Mini-maxi Mini-mini
(weaknesses/opportunities) (weaknesses/threats)
1. 2.
Maxi-maxi Maxi-mini
(strengths/opportunities) (strengths/threats)
3.
Maxi-Maxi (S/O): 4.
Mini-maxi Mini-mini
•(weaknesses/opportunities)
This combination shows the organization’s strengths and opportunities.
• In essence, an organization should strive to(weaknesses/threats)
maximize its strengths to
capitalize on new opportunities.
Quadrant Combinations
1. 2.
Maxi-maxi Maxi-mini
(strengths/opportunities) (strengths/threats)
Maxi-Mini (S/T):3.
3. 4.
• Mini-maxi Mini-mini
This combination shows the organization’s strengths in consideration of
(weaknesses/opportunities)
threats, such as from competitors. (weaknesses/threats)
• In essence, an organization should strive to use its strengths to parry or
minimize threats.
Quadrant Combinations
Mini-Maxi (W/O):
1.
1. 2.
2.
Maxi-maxi
Maxi-maxi Maxi-mini
• This combination shows the organization’s weaknesses
Maxi-mini
in tandem with
(strengths/opportunities)
(strengths/opportunities)
opportunities. (strengths/threats)
(strengths/threats)
• It is an exertion to conquer the organization’s weaknesses by making the
most of any new opportunities.
3. 4.
4.
Mini-maxi Mini-mini
Mini-mini
(weaknesses/opportunities) (weaknesses/threats)
(weaknesses/threats)
Quadrant Combinations
Mini-Mini (W/T):
1. 2.
Maxi-maxi Maxi-mini
• This combination shows the organization’s weaknesses by comparison
(strengths/opportunities)
with the current external threats. (strengths/threats)
• This is most definitely a defensive strategy, to minimize an organization’s
internal weaknesses and avoid external threats.
3. 4.
Mini-maxi Mini-mini
(weaknesses/opportunities) (weaknesses/threats)
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Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Steps of SWOT Analysis
The following are the steps for conducting a SWOT Analysis:
Situation
Analyze Internal & External Environment:
Analyze Internal
Analyze Internal && Analysis
External
External Environment
Environment The first step of SWOT Analysis is to analyze
the situation from both internal and external
aspects. Hence, carrying out the internal
Perform SWOT Analysis analysis will help you to find the strengths
Internal External
& Document Analysis and weaknesses of your organization that
Analysis
affect the situation. On the other hand,
carrying out the external analysis will help
Prepare Action Plans you to find the opportunities and threats that
are external but will affect your organization
Weaknesses Strengthsin the situation.
Opportunities Threats
Analyze Internal & External Environment
Helpful
STRENGTHS
Analyze InternalWEAKNESSES
& External Environment:
Analyze
Analyze• Internal &
Technological
Internal & skills • Lack of important skills
• Leading brands • Weak brand image
External Environment
Internal
External• Environment
Distribution channels The first•step
Poorof SWOT Analysis
distribution channels is to analyze
• Customer Loyalty/Relationships • Low customer
• Product Quality the situation from both internal and external
satisfaction/retention
• Scale aspects.• Hence,
Unreliablecarrying out the internal
product quality/service
Perform• SWOT Analysis
Management
analysis•• willSub-scale
help you to find the strengths
Poor management
& Document and weaknesses ofTHREATS your organization that
OPPORTUNITIES
affect the
• situation. On the other hand,
Change in customer base
• Changing customer tastes
• Technological advances carrying• out the ofexternal
Closing geographicanalysis
markets will help
• Technological advances and threats that
Prepare• Action
ChangePlans
in Government policies you to find the opportunities
External
Harmful
Steps of SWOT Analysis
• • • •
What
What are the
opportunities exist What are the
What threats to the strengths of our
in our external weaknesses of
organization exist in organization?
environment? our organization?
our external
environment?
Brainstorming
When the brainstorming session ends, you should keep the following things in
mind and take action accordingly:
Reduce
Reduce thethe list
list of
of strengths
strengths and
and
weaknesses
weaknesses to to no
no more
more than
than
five
five distinctive
distinctive competencies
competencies
and
and debilitating
debilitating weaknesses
weaknesses
The
The identified
identified strengths
strengths
should
should be
be distinctive
distinctive The
The identified
identified
competencies
competencies weaknesses
weaknesses should
should
be
be debilitating
debilitating
Reduce
Reduce threats
threats and
and
opportunities
opportunities toto five
five each
each of
of
the
the ones
ones that
that are
are most
most critically
critically
important.
important.
Guidelines for Brainstorming
The following are a few guidelines for brainstorming:
SW
STRENGTHS WEAKNESSES
• Ranks very high on the Fortune • Failed the pizza test market
Magazine's most admired list thus limiting the ability to
• Community oriented compete with pizza providers
• Global operations all over the world • High training costs due to high turnover
• Cultural diversity in the foods • Minimal concentration on organic foods
• Excellent location • Not much variation in seasonal products
• Assembly line operations • Quality concerns due to franchised operations
• Use of top quality products • Focuses on burgers/fried foods which are
SWOT not healthier options for their customers
Analysis of
• Opening more joint ventures • Marketing strategies that entice people
• Being more responsive to healthier McDonald’s from small children to adults
options • Lawsuits for offering unhealthy foods
• Advertising Wi-Fi services in the branches • Contamination risks that include the threat of e-
• Expanding on the advertising on being more coli containments
socially responsible • The vast amount of fast food restaurants that open
• Expansions of business into newly developed as competition
parts of the world • Down turn in economy affecting the
• Open products up to allergen free capability of consumer spending
options such as peanut free • Focus on healthier dieting by
OPPORTUNITIES consumers THREATS
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
SWOT-Driven Strategic Planning
SWOT Analysis can be effectively used for strategic planning in an
organization. However, utilizing a SWOT for strategic planning requires:
Looking beyond the firm’s current products
functional areas
Staying focused:
• A template for carrying out SWOT Analysis is given on the next screen.
• You should fill the quadrants of the matrix and state what you are assessing
here.
• Moreover, many listed criteria in one quadrant can apply to other quadrants
also.
• You should decide and identify and use any other criteria that are appropriate
to your situation.
SWOT Analysis Template
Criteria Examples Strengths Weaknesses Criteria Examples
• What resources do you have: • What are the disadvantages
e.g. people, assets, USP, good of your situation / the
marketing proposition?
• Do you have accreditations, • What could you improve?
qualifications, certificates? • Does your workforce lack
• Do you have good process, skills?
systems, ICT, communications? • What factors could lose you
• Do you have good management business; financial
succession planning? vulnerability, weak supply
• Are you financially secured? chain, weak processes and
• Do you have a good systems, poor leadership
geographical location / easy • Are you well known within
distribution your field
• Do you have a good reputation • Do you face any pressure
within your field? from timescales and
• Do you see an advantages of the deadlines?
proposition? • Are there any adverse effects
• What are the company’s on core activities,
capabilities? distraction?
• What are the company’s • Do you possess the proper
competitive advantages? processes and systems, etc.?
SWOT Analysis Template
Criteria Examples Opportunitie Threats Criteria Examples
s
• What are the good • What obstacles do you face?
opportunities your company • Competitors
has? • Political / legislative changes
• Market / technological • New technology
developments • Cash flow problems, bad
• Competitor weaknesses debts
• New markets, niche markets, • Staff turnover
market trends • Legislative effects
• Changes in government • Environmental effects
policy, social patterns, • IT developments
populations changes, lifestyle • Market demand
changes • Any insurmountable
• Business / product weaknesses?
developments • Seasonality, weather effects?
• Change in industry or lifestyle
trends?
• Any global influences?
• Any helpful partnerships,
agencies, distribution?
• Any seasonal, weather,
fashion influences?
Video
Look at the video given below to understand how to conduct a SWOT Analysis
for a business.
Click on the
video to play it!
Objective
Explain What is SWOT Analysis
Explain the Elements of SWOT Analysis
List the Objectives of SWOT
Describe Who needs SWOT Analysis
Explain the Internal and External Factors
Describe the SWOT Quadrants
Explain What is TOWS Analysis
Describe the Various Quadrant Combinations
Explain the Steps of SWOT Analysis
Explain the Role of Brainstorming in SWOT Analysis
Explain SWOT-Driven Strategic Planning
Describe the Considerations for Effective SWOT Analysis
List the Benefits and Pitfalls of SWOT Analysis
List the Common Mistakes in SWOT Analysis
List the Tips for Effective SWOT Analysis
Benefits of SWOT Analysis
6 • It is easy to use
Benefits of SWOT Analysis
STRENGTHS WEAKNESSES
• No Competition in the low-budget • Lesser features
segment. • Low aesthetic appeal
Internal
• Environment friendly • Small driving range [up to 80
• Economic to Drive [25 kmpl] * KM]
• Government subsidies [8% excise • Competition from economy
duty] * segment vehicles
• Low Price
• Small and compact size
OPPORTUNITIES THREATS
Harmful
* Hypothetical figures
Case Study
1.
1. Conduct
Conduct aa SWOT
SWOT
Helium
Helium Inc.
Inc. isis aa leading
leading Analysis
Analysis for
for Helium
Helium for
for
manufacturer
manufacturer of of electronic
electronic the
the launch
launch of
of ‘Bling’.
‘Bling’. You
You
products.
products. ItIt has
has decided
decided to to can
can assume
assume the
the
venture
venture into
into the
the Tablet
Tablet PCPC prevailing
prevailing market
market
market
market by
by launching
launching aa new new conditions
conditions for
for the
the SWOT.
SWOT.
Tablet
Tablet PC
PC named
named ‘Bling’.‘Bling’. ‘Bling’
‘Bling’
would
would be
be based
based on on the
the Android
Android 2.
2. What
What are
are the
the various
various
technology
technology thatthat allows
allows free
free quadrant
quadrant combinations
combinations
download
download of of software
software from from its
its that
that Helium
Helium should
should use
use
Android
Android market
market for for its
its users.
users. to
to make
make this
this new
new
venture
venture aa success?
success?
Summary
Elements
SWOT Analysis
W – Weaknesses O – Opportunities
S – Strengths T – Threats
Elements
SWOT Analysis
Summary
Analyze Internal &
External
Environment
Perform SWOT
Steps of SWOT Analysis Analysis &
Document
SWOT Analysis
SWOT Quadrants
Quadrant 1
Quadrant 4
internal strengths
matched with internal weaknesses
external relative to external
opportunities threats
Quadrant 2 Quadrant 3
internal weaknesses internal strengths
relative to external matched with
opportunities external threats
Summary
SWOT Analysis
Job Holder
Company
Considerations for
Effective SWOT Analysis
SWOT Analysis
Glossary
Click each alphabet to learn more.
O
Glossary
Click each alphabet to learn more.
• Analysis –Analysis is an A
investigation of the component
parts of a whole and their
relations in making up the B
whole.
O
Glossary
Click each alphabet to learn more.
• Brainstorming - Brainstorming is I
a group problem-solving
technique in which members
spontaneously share ideas and O
solutions.
Glossary
Click each alphabet to learn more.
• Competitor – Competitor is a
business or organization offering
A
similar competing products as
your organization.
B
• Customer - Customer is
someone who pays for goods or
services. C
O
Glossary
Click each alphabet to learn more.
• Information - Information is a A
collection of facts from which
conclusions may be drawn.
O
Glossary
Click each alphabet to learn more.
• Opportunity - Opportunity is
possibility due to a favorable A
combination of circumstances.
O
Objective
You have
Successfully