SWOT Analysis Alok Sethi (CA,CS) 2

ACKNOWLEDGEMENT ACKNOWLEDGEMENT

I would like to thank I would like to thank Shri Kishan Maheswari Ji Shri Kishan Maheswari Ji

(Chairman, Ajmer Chapter of ICSI)(Chairman, Ajmer Chapter of ICSI) for giving me the for giving me the

opportunity to present my views on the indispensible topic opportunity to present my views on the indispensible topic

in today’s corporate world through this presentation.in today’s corporate world through this presentation.

I believe students would definitely be benefited with this I believe students would definitely be benefited with this

great endeavour of Kishan Sir and all the other facultiesgreat endeavour of Kishan Sir and all the other faculties

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SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses, and for identifying both the Opportunities open to you and the Threats you face.

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective.

The technique is credited to Albert Humphrey, who led a convention at Stanford University in the 1960s and 1970s using data from Fortune 500 companies.

SWOT ANALYSIS --

meaning

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Strengths : characteristics of the business or team that give it an advantage over others in the industry.

Weaknesses : are characteristics that place the firm at a disadvantage relative to others.

Opportunities: external chances to make greater sales or profits in the environment.

Threats: external elements in the environment that could cause trouble for the business.

SWOT ANALYSIS -- core

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What advantages does your organization have?

What do you do better than anyone else?

What unique or lowest-cost resources can you draw upon that others can't?

What do people in your market see as your strengths?

What factors mean that you "get the sale"?

What is your organization's Unique Selling Proposition (USP) ?

STRENGTHS

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Our company has little market presence or reputation.

We are vulnerable to vital staff being sick, and leaving.

Our cash flow will be unreliable in the early stages.

Toyota needs to keep producing cars in order to retain its operational efficiency.

Dell is a computer maker, not a compute manufacturer.

Sony's production facilities are located far from its customer base

weakness

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Our business sector is expanding, with many future opportunities for success.

Local government wants to encourage local businesses.

Our competitors may be slow to adopt new technologies.

New and emerging markets provide opportunities for eBay in countries such as China and India.

Fox Entertainment is well positioned to capitalize on the shift to digital television

PepsiCo is in the midst of making a $1, 000 million investment in China, and a $500 million investment in India

opportunities

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Developments in technology may change this market beyond our ability to adapt.

A small change in the focus of a large competitor might wipe out any market position we achieve.

The most highly priced Indian Premier League teams may not be those that have the early success.

McDonald's have been criticized by many parent advocate groups for their marketing practices towards children which are seen as marginally ethical.

The supply chain has very few suppliers, leaving IBM very little to negotiate with or switch to.

treats

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SWOT analysis groups key pieces of information into two main categories:

Internal factors – The strengths and weaknesses internal to the organization.

External factors – The opportunities and threats presented by the external environment to the organization.

The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective.

The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix.

Internal & external factors

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Matching & convertingMatching is used to find competitive

advantages by matching the strengths to opportunities.

Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities.

An example of conversion strategy is to find new markets.

If the threats or weaknesses cannot be converted, a company should try to minimize or avoid them

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Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis.

SWOT analysis should distinguish between where your organization is today, and where it could be in the future.

SWOT should always be specific. Avoid grey areas.

Always apply SWOT in relation to your competition i.e. better than or worse than your competition.

Keep your SWOT short and simple. Avoid complexity and over analysis

SWOT is subjective.

SIMPLE RULES FOR SUCCESSFUL SWOT ANALYSIS

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As part of the development of strategies and plans to enable the organization to achieve its objectives, then that organization will use a systematic/rigorous process known as corporate planning. SWOT is used as a basis for the analysis of business and environmental factors.

Set objectives – defining what the organization is going to doEnvironmental scanning

Internal appraisals of the organization's SWOT, this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service life cycle

Analysis of existing strategies, this should determine relevance from the results of an internal/external appraisal. This may include gap analysis which will look at environmental factorsStrategic Issues defined – key factors in the development of a corporate plan which needs to be addressed by the organizationDevelop new/revised strategies – revised analysis of strategic issues may mean the objectives need to changeEstablish critical success factors – the achievement of objectives and strategy implementationPreparation of operational, resource, projects plans for strategy implementationMonitoring results – mapping against plans, taking corrective action which may mean amending objectives/strategies

CORPORATE PLANNING

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A start-up small consultancy business might draw up the following SWOT Analysis:

Strengths:We are able to respond very quickly as we have no red tape, and no need for higher management approval.We are able to give really good customer care, as the current small amount of work means we have plenty of time to devote to customers.Our lead consultant has strong reputation in the market.We can change direction quickly if we find that our marketing is not working.We have low overheads, so we can offer good value to customers.

Weaknesses:Our company has little market presence or reputation.We have a small staff, with a shallow skills base in many areas.We are vulnerable to vital staff being sick, and leaving.Our cash flow will be unreliable in the early stages.

Swot analysis (example)

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Opportunities:Our business sector is expanding, with many future opportunities for success.

Local government wants to encourage local businesses.

Our competitors may be slow to adopt new technologies.

Threats:Developments in technology may change this market beyond our ability to adapt.

A small change in the focus of a large competitor might wipe out any market position we achieve.

As a result of their SWOT Analysis, the consultancy may decide to specialize in rapid response, good value services to local businesses and local government.

Marketing would be in selected local publications to get the greatest possible market presence for a set advertising budget, and the consultancy should keep up-to-date with changes in technology where possible.

Swot analysis (example)

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Swot analysis (case study)Leisure Center has hired you to help them with their marketing decision making.

Perform a SWOT analysis on Highly Brill Leisure Center, based upon the following issues:

1.The Center is located within a two-minute walk of the main bus station, and is a fifteen-minute ride away from the local railway station.

2.There is a competition standard swimming pool; although it has no wave machines or whirlpool equipment as do competing local facilities.

3.It is located next to one of the largest shopping centers in Britain.

4.It is one of the oldest centers in the area and needs some cosmetic attention.

5.Due to an increase in disposable income over the last six years, local residents have more money to spend on leisure activities.

6.There has been a substantial decrease in the birth rate over the last ten years.

7.In general people are living longer and there are more local residents aged over fifty-five now than ever before.

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Swot analysis (case study)Leisure Center has hired you to help them with their marketing decision making.

Perform a SWOT analysis on Highly Brill Leisure Center, based upon the following issues:

8.After a heated argument with the manager of a competing leisure center, the leader of a respected local scuba club is looking for a new venue.

9.The local authority is considering privatizing all local leisure centers by the year 2000.

10.Press releases have just been issued to confirm that Leisure Center is the first center in the area to be awarded quality assurance standard BS EN ISO 9002.

11.A private joke between staff states that if you want a day-off from work that you should order a curry from the Center's canteen, which has never made a profit.

12.The Center has been offered the latest sporting craze.

13.Leisure Center has received a grant to fit special ramps and changing rooms to accommodate the local disabled.

14.It is widely acknowledged that Leisure Centre has the best-trained and most respected staff of all of the centres in the locality.

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Swot analysis (case study)

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