SWOT Analysis in Strategic Management

Case Study:

Group 7
 GROUP(7) PARTICIPANTS
1) Daw Thin Thin Wai (MPA(2)MPT- 7)
2) Daw Hnin Nu Nu Aung (MPA(2)NPT-16) *(Presenter)
3) Daw Phyo Thet Ti (MPA (2)NPT-25) *(Presenter)
4) U Pyae Sone Oo (MPA (2)NPT-34)
5) Daw Ei Ei Phyoe (MPA (2)NPT-43)
6) U Khin Soe (MPA (2)NPT-60)
7) Daw Phyo Yi Thae (MPA (2)NPT-61) *(Presenter)
8) U Kyaw Nyi Nyi Thaw (MPA (2)NPT-69)
9) U Su Kan Mon (MPA (2)NPT-93)
THE DEFINITION OF SWOT ANALYSIS

 SWOT analysis (or SWOT matrix) is a strategic planning and strategic

management technique used to help a person or organization identify
S t r e n g t h s , We a k n e s s e s , O p p o r t u n i t i e s , a n d T h r e a t s related
to business competition or project planning.
 It is sometimes called situational assessment or situational analysis.
 This technique is designed for use in the preliminary stages of decision-
making processes.
 It can be used as a tool for evaluation of the strategic position of organizations
of many kinds (for-profit enterprises, local and national governments, NGOs,
etc.).
 It is intended to identify the internal and external factors that are favorable and
unfavorable to achieving the objectives of the venture or project.

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 COMPONENTS OF SWOT ANALYSIS
 The name is an acronym for the four components the technique examines:

1. Strengths describe what an organization excels at and what separates it

from the competition.

2. Weaknesses stop an organization from performing at its optimum level.

They are areas where the business needs to improve to remain
competitive.

3. Opportunities refer to favorable external factors that could give an

organization a competitive advantage.

4. Threats refer to factors that have the potential to harm an organization.

 Results of the assessment are often presented in the form of a matrix, or

simply as paragraphs.
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 HOW TO DO SWOT ANALYSIS?
A SWOT analysis can be broken into several steps with actionable items before
and after analyzing the four components. In general, a SWOT analysis will
involve the following steps:

 Step 1: Determine Your Objective

A SWOT analysis can be broad, though more value will likely be generated
if the analysis is pointed directly at an objective. With an objective in mind, a
company will have guidance on what they hope to achieve at the end of the
process. In this example, the SWOT analysis should help determine whether
or not the product should be introduced.

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 HOW TO DO SWOT ANALYSIS?
 Step 2: Gather Resources

Every SWOT analysis will vary, and a company may need different data
sets to support pulling together different SWOT analysis tables. A company
should begin by understanding what information it has access to, what data
limitations it faces, and how reliable its external data sources are.
In addition to data, a company should understand the right combination
of personnel to have involved in the analysis. Having a broad set of
perspectives is also more likely to yield diverse, value-adding contributions.

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 HOW TO DO SWOT ANALYSIS?
 Step 3: Compile Ideas
 Internal Factors
What occurs within the company serves as a
great source of information for the strengths
and weaknesses categories of the SWOT
analysis. Examples of internal factors
include financial and human resources,
tangible and intangible (brand name) assets,
and operational efficiencies.
 External Factors
What happens outside of the company is
equally as important to the success of a
company as internal factors. External
influences, such as monetary policies,
market changes, and access to suppliers, are
categories to pull from to create a list of
opportunities and threats.
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 HOW TO DO SWOT ANALYSIS?
 Step 4: Refine Findings
By refining the thoughts that everyone had, a company can focus on only the best
ideas or largest risks to the company. This stage may require substantial debate
among analysis participants, including bringing in upper management to help rank
priorities.
 Step 5: Develop the Strategy
Armed with the ranked list of strengths, weaknesses, opportunities, and threats, it
is time to convert the SWOT analysis into a strategic plan. Members of the
analysis team take the bulleted list of items within each category and create a
synthesized plan that provides guidance on the original objective.

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 BENEFITS OF SWOT ANALYSIS
 A SWOT analysis won't solve every major question a company has. However,
there's a number of benefits to a SWOT analysis that make strategic decision-
making easier.

1. A SWOT analysis makes complex problems more manageable. 

2. A SWOT analysis requires external consider.  It covers both the internal
factors a company can manage and the external factors that may be more
difficult to control.

3. A SWOT analysis can be applied to almost every business question. 

4. A SWOT analysis leverages different data sources.

5. A SWOT analysis may not be overly costly to prepare.

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 DRAWBACKS OF SWOT ANALYSIS
 According to Harvard Business Review, one drawback of a SWOT analysis is
that it can oversimplify the type and extent of strengths, weaknesses,
opportunities and threats facing the company. It also ignores some of the
strengths and weaknesses of other companies that could affect your business.

 There may be times when your company's situation does not fit into one of the
four SWOT categories. At other times, it may be difficult to classify a situation,
as opportunities can also be threats, and strengths can also be weaknesses,
depending on circumstances. When conducting a SWOT analysis, this drawback
can be avoided by considering each situation in light of the company's overall
objectives and goals.

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 Amazon.com, Inc. is an American
multinational technology company
focusing on e-commerce, cloud
computing, online advertising, digital
streaming, and artificial intelligence.
 It has been referred to as "one of the
most influential economic and cultural
forces in the world", and is one of
the world's most valuable brands.
 It is one of the Big Five American
information technology companies,
alongside Alphabet (Google), Apple,
Meta (Facebook), and Microsoft.

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 Amazon was founded by Jeff
Bezos from his garage in Bellevue,
Washington,[on July 5, 1994.
 Initially an online marketplace for
books, it has expanded into a
multitude of product categories, a
strategy that has earned it the
moniker The Everything Store.
 Amazon is a big player in the business
world. It has a market capitalization of
more than $1 trillion and does
business in many countries around the
world.

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 AMAZON’S STRENGTHS – INTERNAL STRATEGIC FACTORS
 Strong brand name – As a global e-commerce giant, Amazon has a strong
position and successful brand image in the market. 
 Brand valuation – According to Interbrand’s Global Brand Ranking 2021,
Amazon is ranked at #2 position with a brand value of $249 Billion.
 Customer oriented – Amazon caters to a large number of customers for
everyday needs at inexpensive prices. This has made it a customer-oriented
brand.
 Differentiation and Innovation – Amazon frequently brings creative ideas
and innovative additions to its product line and service offerings like ambitious
drone delivery service and Withings Aura Smart Sleep System.  This creates a
differentiation from other companies.
 Cost Leadership – Amazon doesn’t incur costs in maintaining physical retail
stores by selling everything online. With economies of scale, Amazon efficiently
controls its costs and lowers its inventory replenishment time. The company has
formed numerous strategic alliances with many companies like Evi
Technologies, Thalmic Labs, Shoefitr, The Orange Chef etc. It has a strong
value chain system which also helps in maintaining a low-cost structure.
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 AMAZON’S STRENGTHS – INTERNAL STRATEGIC FACTORS

 Largest Merchandise Selection – Amazon owns extensive product mix

which attracts online customers to make their majority of purchases from it
rather than other online retailers. 
 Large number of third-party sellers – Due to the high traffic volume on
Amazon’s sites, a large number of third-party sellers have joined the
platform of Amazon to sell their own merchandises.
 Go Global and Act Local strategy – This strategy has benefitted Amazon
the most. Amazon develops partnerships with local supply chain companies
that help it in competing against domestic e-commerce rivals. It
understands the local needs and launches its services as per the country’s
culture.
 Involved into 3 key business – Amazon Marketplace, Amazon Web
Services (AWS), and Amazon Prime are 3 key businesses of Amazon
which work and support each other. As a whole, they generate massive
profits and advantages for the company. 16
AMAZON’S STRENGTHS – INTERNAL STRATEGIC FACTORS
 Superior logistics and distribution systems – Amazon uses highly
efficient logistics and distribution systems. It even has fixed rates for
different delivery time periods. Thus, it executes reliable, secure, and fast
delivery of goods and products to the customers.
 Perfectively Competitive Industry – Amazon is the world’s largest online
retailer and is rapidly growing its footprints in other areas such as physical
retail stores, subscription services, and web services.
 Amazon stands at No.18 among the world’s top 25 largest companies.
Amazon’s annual sale revenue is around $177,866 millions.
 Minimum pay raise to $15 per hour – It is among the first companies in
retail to raise its minimum hourly pay to $15.
 Monopsony Power – Amazon’s monopsony power reveals itself is through
Amazon’s labour market activity. Amazon has around 798,000 employees
in the US alone.

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 AMAZON’S WEAKNESSES – INTERNAL STRATEGIC FACTORS

 Easily imitable business model – Online retail businesses have become

quite common in this digital world. So imitating Amazon’s business
model for rival firms is not so difficult. 
 Tax Avoidance Controversy – Tax avoidance in Japan, UK and US has
sparked negative publicity for Amazon. 
 Limited brick-and-mortar presence – Amazon owns very limited
physical stores. This sometimes hinders to attract customers buy things
which are not sellable on online stores.
 Declining consumer safety – As its offerings increase, it is becoming a
challenge for Amazon to vet each product and guarantee the highest level of
safety. The U.S. Environmental Protection Agency (EPA) recently had
to order Amazon to remove a wide range of pesticides and unsafe
products on its platform.  

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 AMAZON’S WEAKNESSES – INTERNAL STRATEGIC FACTORS
 Vox published negative reports related to employees’ treatment
and workplace conditions against Amazon in July 2018. Such things affect
the market reputation of Amazon.
 Unfair use of third party data – Engaging in unfair trade practices
undermines trust and increases legal risks. Amazon is facing antitrust
charges in the European Union for collecting and using data from third-
party to compete against them.  
 Overdependence on distributors – Relying on distributors exposes
Amazon to a wide range of issues. One of its main distributors (German
Logistic Group – Deutsche Post DHL) can leverage its position
to renegotiate terms.
 Employees Strike – Strikes can grind Amazon’s operations to a halt. In
Germany, Amazon employees went on strike due to unsafe working
conditions and paralyzed operations in six distribution centers.

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 AMAZON’S OPPORTUNITIES–EXTERNAL STRATEGIC FACTORS

 Amazon can gain the opportunity to penetrate or expand its operations

in developing markets.
 By expanding physical stores, Amazon can improve competitiveness
against big box retailers and engage customers with the brand.
 Amazon has the opportunity to improve technological measures and
organizational policies to reduce counterfeit sales. 
 Can do backward Integration by expanding its production of in-house
brands such as Amazon basics to differentiate its offerings and improve
profit margins. 
 More acquisitions of e-commerce companies can increase the company’s
market share and reduce the competition level.
 Self Driving Technology – Amazon recently acquired California-based
self-driving startup Zoox Inc for whooping $1 Billion. It can now leverage
autonomous technology to exploit the increase in demand for ride-hailing
services or use it to improve its delivery network.
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 AMAZON’S OPPORTUNITIES–EXTERNAL STRATEGIC FACTORS

 Amazon recently launched its incredible personal shopper service

exclusively for Prime members. So, if you have an Amazon Prime
subscription, you can opt for the personal shopper experience giving you
access to the company’s team of professional stylists and fashionista.
 Plans to Enter the Crypto Stratosphere: There are a lot of speculations
and rumors floating around the crypto ecosystem. However, there have
been reports by mainstream media outlets that Amazon does indeed plan to
make a move into cryptocurrency, stating that the company has developed a
big appetite for digital currencies and blockchain.

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 AMAZON’S THREATS–EXTERNAL STRATEGIC FACTORS
 Government regulations can also threaten the business proceedings of
Amazon in some critical countries. Amazon does not ship to Cuba, Iran,
North Korea, Sudan, and Syria.
 Links to exploitative labor – Amazon is one of three retail giants facing
scrutiny from the US State Department for maintaining supply chains and
labor sources associated with human rights abuses. This exposes the
ecommerce giant to reputational, economic, and legal risks.
 Increasing cybercrime can affect the network security system of the
company.
 Aggressive competition with big retail firms like Walmart, Target, 
Home Depot, eBay can give Amazon a tough time in the future.
 Imitation is simple as many new entrants are coming up in the market usually
with the same business model of Amazon.
 Fake Products – The increase in counterfeiting and fake products threatens
Amazon’s profits. The company recently filed a lawsuit against New York-
based online retailer for allegedly counterfeiting Valentino shoes, a luxury
Italian shoe brand offered by Amazon.  22
 AMAZON’S THREATS–EXTERNAL STRATEGIC FACTORS

 Fake reviews – Amazon has an overwhelming amount of fake reviews, and

the problem has worsened in recent times due to the pandemic. Product
reviews are a critical indicator of quality and authenticity, and customers
rely heavily on reviews to make purchases. According to the Financial
Times investigation, Amazon has deleted over 20,000 fake 5-star
reviews from its top UK reviewers.

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 RECOMMENDATIONS FOR AMAZON
SWOT analysis clarifies the current standing of Amazon. Few necessary
improvements are needed to be done to administer the lacking and reinforce
its market position.
 Consolidate the market dominance by boosting its marketing efforts,
promotional activities, and competitive advantages.
 Strategically deal with global controversies. Amazon needs to resolve tax
issues and manage its app’s features efficiently to diminish negative
publicity in the market.
 Increase its limited presence through opening physical stores outside the
U.S. This will augment brand popularity and market reach.
 Enhance its strategic entry in developing countries where many growth
opportunities are available.
 Increase competitive edges and enlarge the gap between Amazon and its
biggest competitors.
 Address the issues of counterfeit sales and cybercrimes by upgrading
technology measures.
 Enhance network security systems for the protection of consumers’ rights.
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Group 7