This action might not be possible to undo. Are you sure you want to continue?
What is SWOT?
An analysis tool important for understanding an organization’s Strengths, Weaknesses, Opportunities and Threats Can be done at the level of the entire organization, business unit, product line, or specific product Helps the firm identify strategy-related factors
Important to focus on the most critical factors
fault. or anything external that might cause problems. damage or injury . or defect in the organization that will keep it from achieving its objectives An Opportunity is any favourable situation in the organization's environment usually a trend or an overlooked need that increases demand for a product or service and permits the firm to enhance its position by supplying it A Threat is any unfavourable situation in the organization's environment that is potentially damaging to its strategy may be a barrier.SWOT .Definitions A Strength is a resource or capacity the organization can use to effectively achieve its objectives A Weakness is a limitation. a constraint.
SWOT Matrix Helpful Internal External Strengths Opportunities Harmful Weaknesses Threats .
Why is SWOT Important? For decision making Developing strategies for the future .improve company’s overall performance Can help uncover opportunities that a company is well positioned to exploit By understanding the weaknesses of a business. it can manage and eliminate threats .
What do we use SWOT for? Identification of SWOT’s is essential because subsequent steps in the planning process may be derived from the SWOT’s How can we use and capitalize on each strength? How can we improve each weakness? .
and externally from the point of view of its customers and people in the market These are a company’s resources and capabilities that can be used as a basis for developing a competitive advantage What What What What advantages does this company have? does this company do better than anyone else? unique or lowest-cost resources does it have access to? do people in this market see as it’s strengths? .Strengths Determine a company's strong points Consider these from an internal perspective.
affects the industry as a whole Changes in government policies/regulations Rise in consumer spending .Strength VS Opportunity Strength .within the company’s means to control High profit margins Industry leader in innovation Opportunity – external to the company.
Strengths . innovative product or service Location of a business Quality processes and procedures Skills and expertise that a business has that its competitors do not possess Valuable physical assets or resources Strong relationships with suppliers or partners Any other aspect of a business that adds value to its products or services .Examples A new.
service quality. flexibility. ability to produce on time.Strengths – Examples Continued Marketing . relationship with customers. training and development .ability to access capital. financial stability Manufacturing . entrepreneurial orientation. healthy cash flow.company reputation. dedicated employees.facilities. sales effectiveness.strong leadership. distribution effectiveness Finance . capacity. economies of scale. technical skill Human Resources . responsive to changes in business conditions.
as well as a competitor perspective What could the company improve? What should the company avoid? What are people in the market likely to see as weaknesses? .Weaknesses In many cases a weakness may be the opposite of a strength. or a weakness may be viewed as a lack of certain strengths These must consider the company perspective.
Weakness VS Threat Weakness .within the company’s means to control Slow inventory turnover Low brand recognition Threat – external to the company. affects the industry as a whole Rising labour/production costs Decline in GDP .
Weaknesses .Examples Lack of marketing expertise Undifferentiated products or services Location of the business Poor quality goods or services Damaged reputation Lack of patent protection Weak brand name Lack of access to key distribution channels .
SO WHAT DOES THIS MEAN TO THE COMPANY? .
morale.So What? Likely outcomes to the company if the trend continues In terms of profitability.100 Crs. Must link point back to company Examples: Will lead to higher profits for the company Will lead to higher profits for the company. shareholder value. perception. helping it to achieve its goal of acquiring competitor XYZ for Rs. reputation. . etc.
Through innovation. Proof: Astral will be the first Canadian broadcaster to introduce VOD. increasing brand loyalty.Example Point: Astral Media is an industry leader in delivering innovative technology to its customers. Aggressively pursuing the discovery of new technologies allows Astral to maintain a competitive advantage over other firms in the industry. . encouraging customers to associate the Astral Media brand of products with superior quality. Astral Media is able to differentiate itself from competitors. high quality products. Explanation: The company is able to add value to existing products. a new pay TV product customers can receive by subscribing to existing Astral channels. making Astral an attractive choice for consumers seeking unique.So What? .
the company needs to actively market its available advertising space in order to maximize revenues. . which is below industry standards. Astral is limiting its growth potential due to a decreasing profit margin. Explanation: Astral has not responded to this downturn in advertising spending.” Over the past year. Proof: “Astral’s exposure to the advertising market is approximately 30%. Astral can not re-invest these profits into other aspects of the company.So What? . the advertising market has experienced a slow-down.Example Point: Astral Media’s television broadcasting stations are not capturing the full potential of advertising revenues. which has created an increasingly competitive advertising environment for broadcasters. Without the potential revenue from advertising during some of Canada’s most highly-rated shows.
Strength A distinctive competence? Adequate financial resources? Good contacts/relations Good competitive skills? Special expertise? An acknowledge company .
Strength Well-conceived functional area strategies? Innovative programs/services? Good overall reputation? Insulated (at least somewhat) from strong competitive pressures? Competitive advantages? Proven management? .
Weakness No clear strategic direction A deteriorating competitive position? Lack of managerial depth and talent? Missing any key skills or competencies? Poor track record in implementing strategy? Plagued with internal operating problems? Vulnerable to competitive pressures? Competitive disadvantages? Unable to finance needed changes in strategy? Other? .
Opportunities Enter new markets or segments? Expand services to meet broader range of student needs? Diversity into related services? Complacency Fast market growth? Weak competitors? Others? .
Threats Slow market growth? Adverse government policies? Growing competitive pressures? Vulnerability to recession and business cycle? Adverse demographic changes? Other? .