SWOT AnalysisBy Wilfredo B. RuinSPPS 201 - Strategic Planning: Theory and Practice

Challenges for Success

Market conditions are in constant flux Forced the managers/head of organizations to come up with

NEW projects/ ideas/ innovations to compete and keep the essence of the services’ relevance to modern consumers/stakeholders.

Success is a factor of proper direction, establishing

goals and developing a STRATEGIC PLAN

Strategic PLANNING must be DONE in the real world with FULL UNDERSTANDING of WHERE one is coming

from and WHAT the FUTURE may hold.

Change is INEVITABLE.

Outline of Presentation

DefinitionThe SWOT MatrixInternal FactorsExternal FactorsMatching and ConvertingUses of SWOT AnalysisWeaknesses of SWOT Analysis

Defining SWOT

Developed by Albert Humphrey, a business analyst at

Stanford Research Institute

An INSTRUMENT in strategy formulation and selection

A Structured Planning Method used to evaluate critical

aspects/factors in a project or in a business venture

Involves specifying the objective of the organization and ANALYSE the

internal and external environmental factors; performed as part of

developing the organizational strategy

S - trength, W - eaknesses, O - pportunities, T - hreaths

Comprised by two distinct but related

elements which may affect the ability of an

organization to be successful.

Internal factors are those that can be

addressed on the organization.

External factors are those over which you

have little influence, or are not in a position to

change, but which have a direct influence on

the success of your organization.

The SWOT Matrix

The SWOT Matrix

Often arranged as a 2 by 2 matrices with the lists of strength and weaknesses in the first two boxes in the first row and the lists of opportunities and threats in the second row.

Assessment should be systematic & honest, and by someone INDEPENDENTLY-MINDED.

Identify what is done WELL and what is done BADLY

Changes in the Outside must be considered to assess its impact.

Internal Factor: STRENGTH

RESOURCES, CAPABILITIES / CHARACTERISTICS that can be used as a basis for developing a competitive advantage.

Internal parts of the economy or an organization which are PERFORMING WELL, and are likely to continue to do so.

Sample:

Existing range of human services and markets, human resources, management capabilities, service delivery capabilities, financial performance and position.

Internal Factor: WEAKNESSInternal parts/aspects of the economy/organization which are NOT PERFORMING WELL currently, and are likely to continue to do so.Characteristics that place the team at a disadvantagerelative to others.Absence of certain strengths may be viewed as a weakness.

Sample:

Lack of patent protection, a weak brand name, poor reputation among customers , high cost structure, lack of access to the best natural resources, lack of access to key distribution channels.

External Factor: OPPORTUNITY

Any feature of the external environment which CREATES POSITIVE POTENTIAL for the business/organization to achieve its objectives, in the future, with appropriate intervention or potentially positive external influences.Elements that the organization could exploit to its greater advantage.

Sample: Technological innovation, new demand, market growth, demographic change, social or lifestyle change, government spending programmes

External Factor: THREATElements in the environment that could

cause TROUBLE for the business/organization/project without appropriate intervention or potentially negative external influencesDescribes how the competition, new technology

or other factors may affect development.

Sample: Shifts in consumer tastes-away from the firm's products, emergence of substitute products, new regulations, increased trade barriers.

Utilizing SWOTDevelop a strategy capable of attaining the

mission statements and strategic objectives that the organization has itself.

Identifying a strategy is a CREATIVE TASKaimed to identify the various types of activities the organizations might undertake.

Approches in strat making: a.Brainstorming, involving staff at

all levels in the organization to generate ideas and gain staff commitment

b.Reflecting on the question of ‘what business we are in?’

c. Identifying the successful strategy of similar organizations with the aim of copying the strategy

d.Obtaining the opinions from various external parties about alternative business strategies.

For the public sector: Obtaining or providing a description or audit of the public

or sector and its economy Assessing current and future market conditions Considering the activities of the public sector Agreeing and summarizing the key features of the region

Matching and Converting

Matching is used to

find competitive advantage by

matching the strengths to

opportunities.

Matching and Converting

Converting is to apply conversion

strategies to convert weaknesses

or threats into strengths or

opportunities.

If the threats or weaknesses can’t be converted a company should try to MINIMIZE or AVOID them.

DEPARTMENT OF AGRICULTURE

Mandate: The Department is the government agency responsible for the promotion of agricultural development by providing the policy framework, public investments, and support services needed for domestic and export-oriented business enterprises. In the fulfillment of this mandate, it shall be the primary concern of the Department to improve farm income and generate work opportunities for farmers, fishermen and other rural workers. It shall encourage people's participation in agricultural development through sectoral representation in agricultural policy-making bodies so that the policies, plans and programs of the Department are formulated and executed to satisfy their needs. It shall also use a bottom-up self-reliant farm system approach that will emphasize social justice, equity, productivity and sustainability in the use of agricultural resources.

Sample:

DEPARTMENT OF AGRICULTURE

Vision:A modernized smallholder agriculture and fisheries; a diversified rural economy that is dynamic, technologically advanced and internationally competitive. Its transformation is guided by the sound practices of resource sustainability, the principles of social justice, and a strong private sector participation.

Mission:To help and empower the farming and fishing communities and the private sector to produce enough, accessible and affordable food for every Filipino and a decent income for all.

Sample:

Sample SWOT- the case of

Strength Weaknesses Opportunities Threats• Recent approval of the

Rationalization Plan• Recent restructuring of

the MFOs and corresponding Performance Indicators

• Good performance in terms of utilizing the appropriated budget

• Finalized mid year Agriculture and Fisheries Modernization Plan

• Grant of Performance Based Bonus

• Majority of human resources/staff is job-orders

• High turn over rates for staff who were previously trained/those already versed with the procedures of the office

• Not clear functions of offices: duplication of works, offices unutilized/under performing offices

• Ranking of individuals for PBB grant

• Agriculture sector is a priority of the government; the country being an agri community

• Good collaboration with other NGA under the AARNR sector; NCI

• Early approval of the GAA mean early implementation of planned projects

• Plan termination of DAR• Recent bad publicity of

the Secretary; for the publics’ accusations against his involvement to malicious transactions

Uses of SWOT Analysis

Aimed to get managers thinking about everything that could potentially impact success; failure to consider a key SWOT could lead to a poor decisions.Can help to determine which solutions are

most likely to succeed and which are not.It can inform later/next steps in planning to

achieve the objectives and overall aim.

Uses of SWOT Analysis

May help in analyzing to determine capacity to move forward and address advancing issues. Provides information helpful in matching the firm's resources and capabilities to the competitive environment where it operates

Weaknesses of SWOT

It may tend to persuade its users to compile lists rather than to think about actual important factors in achieving objectives. It also presents the resulting lists uncritically and without clear prioritizationNot all in the lists may contribute to identifying useful strategies

References

www.rsedp2serbia.eu; Technical Guidance Note 3, The Role of SWOT in Analysis in Regional Development

http://www.quickmba.com/strategy/swot/ Wikipedia, the free encyclopedia http://www.iplanner.net/business-financial/online/how-to-articles.aspx?article_id=swot-

analysis; Strategic Planning: What is a SWOT Analysis?, author Armin Laidre http://www.free-management-ebooks.com/faqst/swot-05.htm; Matching and

Converting http://extension.psu.edu/animals/dairy/hr/tools-for-teams/starting-an-advisory-

team/planning; Strategic Planning With S.W.O.T. Analysis

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ourselves -- to break our own records, to outstrip our yesterday by our

TODAY.

- Stewart B. Johnson

Thank you!