SWOT ANALYSISJob Thomas

MBA (PT), sem-6

SMS, CUSAT

Feb 2013

WHAT IS SWOT?

It is a planning tool used to identify Strengths, Weaknesses, Opportunities and Threats involved in a business.

It is used as part of Strategic Planning Process

A SWOT analysis generates information that is helpful in matching an organization’s goals, programs, and capacities to the social environment in which they operate

SWOT

Factors affecting an organization can usually be classified as:

Internal factors Strengths (S) Weaknesses (W)

External factors Opportunities (O) Threats (T)

Strengths

Opportunities

Weaknesses

Threats

Helpful Harmful

SWOT

Strengths- Internal attributes that are helpful to the organization to achieving its objective

Weaknesses – Internal attributes that are harmful to the organization to achieving its objective

Opportunities – External factors that help the organization achieve its objective

Threats - External factors that are harmful to the organization to achieving its objective

STRENGTHS: INTERNAL FACTOR

Strengths are positive tangible and intangible attributes, internal to an organization.

They are within the organization’s control

Strengths are Things a business is good at A characteristic giving a business an

important capability Sources of clear advantage over rivals Distinctive competencies and

resources that will help the business achieve its objectives

STRENGTHS

High market share Achieving economies

of scale High quality Leadership &

management skills Financial resources Research and

development capabilities

Technological leadership

Brand reputation Protected IP Distribution network Employee skills High productivity Flexibility of

production

Examples Examples

STRENGTHS

Strengths help to build up competitive advantage and serve as a cornerstone of strategy

Strengths should be protected and built upon.

Importance

INTEL – SWOT ANALYSIS

Favourable Unfavourable

Internal Strengths • Strong market position and brand image• Advanced technological capabilities

Weaknesses • Customer concentration

External Opportunities • Launch of Atom processor • Partnerships and alliances • Growing global semiconductor market • Expanding PC market

Threats • Increasing competition • Litigations

WEAKNESS- INTERNAL FACTOR

Factors that are within an organization’s control that detract from its ability to attain the core goal. In which areas might the organization improve?

Weaknesses are: A source of competitive disadvantage Things the business lacks or does poorly Factors that place a business at a disadvantage Issues that may hinder or constrain the business

in achieving its objectives

WEAKNESS

Low market share Inefficient plant Outdated

technology Poor quality Lack of innovation A weak brand name High costs

Cash flow problems Undifferentiated

products Inadequate distribution Low productivity Skills shortages De-motivated staff Products at the decline

stage of product life cycle

Examples Examples

WEAKNESS

Management should seek ways to reduce or eliminate weaknesses before they are exploited further by the competition. 

Weakness should be seen as areas for improvement.

Importance

SWOT-ANALYSISAPOLLO TYRES LTD

Favourable Unfavourable

Internal Strengths •base in three countries with three product brands•Extensive distribution•Leading player in commercial vehicle segment•Ultra high performance in car tyre segments in Europe•Largest producerand exporter in Indian car tyre segment

Weaknesses • not invested in two and three wheeler tyre segment•In Africa, manufacturing facilities are sub-optimal•Company unable to pass cost escalations to customers

External Opportunities • first mover in truck & bus radial segments•Apollo brand car tyres in Europe will make sizable leverage•Dunlop in Africa can explore more geographical advantages•Market in A. America, Australia, Russia S-E Asia yet to be explored

Threats • slow downs in India economy•Increased competitions from global players• redundant capacities needing investments•Raw material price volatility •Unpredictable political, economical and currency fluctuations at S. Africa•Decline in demand in Europe

OPPORTUNITIES – EXTERNAL FACTOR

External attractive factors that represent the reason for an organization to exist and develop. What opportunities exist in the environment which will propel the organization?

Identify opportunities by their “time frames”

An opportunity is any feature of the external environment which creates positive potential for the business to achieve its objectives.

OPPORTUNITIES

Technological innovation

New demandMarket growth

Demographic change Social or lifestyle

change Government spending

programmes

Cash flow problems Undifferentiated

products Inadequate distribution Low productivity Skills shortages De-motivated staff Products at the decline

stage of product life cycle

Examples Examples

SWOT-ANALYSISKINGFISHER AIRLINES

Favourable Unfavourable

Internal Strengths •Strong brand value and reputation in the minds of the consumer•UB group as the parent company•First Indian airline to have a new fleet of planes•Quality service and innovation•More than 80 destinations•Less than 100 people (employees) per aircrafts

Weaknesses • Still in RED (still to Break Even)(An outstanding of 950crs only to oil marketing cost till may end )•High ticket pricing (KF First & Class)•Tough competition from Indian as well as international players

External Opportunities • If able to survive for a couple of years, then can have a big market share•Untapped International Markets•Untapped cargo market•Expanding tourism business

Threats • Falling demand•Over capacity in the skies•ATF prices•Economic slowdown•Infrastructure issues

THREATS – EXTERNAL FACTOR

Threats are any external development that may hinder or prevent the business from achieving its objectives

THREATS

New market entrants

Change in customer tastes or needs

Demographic change

Consolidation among buyers

New regulations

Economic downturn Rise of low cost

production abroad Higher input prices New substitute

products Competitive price

pressure

Examples Examples

THREATS

The organization may prepare contingency plans to address threats.

Classify them by their “seriousness” and “probability of occurrence”.

Importance

SWOT-ANALYSISBJP PARTY

Favourable Unfavourable

Internal Strengths •A strong support base with an all-India presence•Active support from a large worldwide base of supporters•A large number of fulltime workers spread across the country•Support of the vast network of RSS and related organizations (Sangh Parivar) •Absence of any credible national political alternative except Congress •BJP is the only all-India level political formation in the ideological segment, which can be loosely described as "Hindu Nationalist Political Stream".

Weaknesses •Poorly defined ideological position. •Inability to promote talent internally. •Lack of creativity and intellectual depth in the organization. •Internal contradictions and conflict of interests within Sangh Parivar.. •Top leadership is increasingly seen to be old and weak, physically as well as politically •Growing Infighting and Factionalism

External Opportunities • The party is in power in three states and in Centre. •The party is the main opposition party in a large number of states. •There have been no major charges of corruption against any minister of Central Government. •Party has substantial financial resources at its command. •The number of people who are inclined to be pro-Hindutva is increasing almost everyday. •Sonia Gandhi's Italian descent makes her unacceptable to many Indians.

Threats •There is an impression among general public that BJP is a sinking ship. •A new generation of Congress leaders in the age group of 40 -55 is in control in many states. This leadership is dynamic, innovative and sharp. •The image of Sonia Gandhi has been improving. She is often seen as better, younger and more dynamic alternative. •Rising unemployment is leading to frustration among youth. Party is being seen as pro-rich, pro-multinational, anti-small-business, anti-small-industry. This image combined with large unemployment can wreak havoc.

SWOT-ANALYSISBJP PARTY

Favourable Unfavourable

External Opportunities • The party is in power in three states and in Centre. •The party is the main opposition party in a large number of states. •There have been no major charges of corruption against any minister of Central Government. •Party has substantial financial resources at its command. •The number of people who are inclined to be pro-Hindutva is increasing almost everyday. •Sonia Gandhi's Italian descent makes her unacceptable to many Indians.

Threats •There is an impression among general public that BJP is a sinking ship. •A new generation of Congress leaders in the age group of 40 -55 is in control in many states. This leadership is dynamic, innovative and sharp. •The image of Sonia Gandhi has been improving. She is often seen as better, younger and more dynamic alternative. •Rising unemployment is leading to frustration among youth. Party is being seen as pro-rich, pro-multinational, anti-small-business, anti-small-industry. This image combined with large unemployment can wreak havoc.

POTENTIAL USE OF SWOT ANALYSIS

Set Objectives– defining what the organization is intending to do

Environmental Scanning– internal appraisals of the organizations 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 factors.

Strategic issues defined– key factors in the development of a corporate plan which needs to be addressed by the organization

POTENTIAL USE OF SWOT ANALYSIS

Develop new/revised strategies– revised analysis of strategic issues may mean the objectives need to change

Establish critical success factors– the achievement of objectives and strategy implementation

Preparation of operational, resource, projects plans for strategy implementation

Monitoring results– mapping against plans, taking corrective action which may mean amending objectives/strategies

SWOT MATRIX

StrengthGOOD NOWMaintain, build, leverage

WeaknessBAD NOWRemedy, stop

OpportunityGOOD FUTUREPrioritize, optimize

ThreatBAD FUTURECounter

ANY QUESTIONS?

THANKYOU FOR YOUR KIND ATTENTION