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
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