SWOT Analysis
S W O T
SWOT Analysis
Learning Objectives
What isis SWOT
What SWOTAnalysis?
Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise for SWOT Analysis
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What is SWOT Analysis?
Acronym for Strengths,
Strengths Weaknesses, Opportunities, and
Threats.
Technique is credited to Albert
Humphrey who led a research
project at Stanford University in
the 1960s and 1970s.
Planning tool used to understand
Oppurtunity
SWOT Weakness
Strengths, Weaknesses,
Opportunities, & Threats involved
Analysis in a project / business.
Used as framework for
organizing and using data and
information gained from
situation analysis of internal and
external environment.
Technique that enables a group /
Threats individual to move from everyday
problems / traditional strategies
to a fresh perspective.
What is SWOT Analysis?
STRENGTHS
Characteristics of the business or a team
that give it an advantage over others in the
industry.
Positive tangible and intangible
attributes, internal to an organization.
Beneficial aspects of the organization
or the capabilities of an organization,
which includes human competencies,
process capabilities, financial
resources, products and services,
customer goodwill and brand loyalty.
Examples - Abundant financial resources,
Well-known brand name, Economies of
scale, Lower costs [raw materials or
processes], Superior management talent,
Better marketing skills, Good distribution
skills, Committed employees.
What is SWOT Analysis?
OPPORTUNITIES
Chances to make greater profits in the
environment - External attractive factors
that represent the reason for an
organization to exist & develop.
Arise when an organization can take
benefit of conditions in its
environment to plan and execute
strategies that enable it to become
more profitable.
Organization should be careful and
recognize the opportunities and grasp
them whenever they arise. Opportunities
may arise from market, competition,
industry/government and technology.
Examples - Rapid market growth, Rival
firms are complacent, Changing customer
needs/tastes, New uses for product
discovered, Economic boom, Government
deregulation, Sales decline for a substitute
product .
What is SWOT Analysis?
WEAKNESSES
Characteristics that place the firm at a
disadvantage relative to others.
Detract the organization from its
ability to attain the core goal and
influence its growth.
Weaknesses are the factors which do
not meet the standards we feel they
should meet. However, weaknesses
are controllable. They must be
minimized and eliminated.
Examples - Limited financial resources,
Weak spending on R & D, Very narrow
product line, Limited distribution, Higher
costs, Out-of-date products / technology,
Weak market image, Poor marketing skills,
Limited management skills, Under-trained
employees.
What
SWOT is SWOT
ANALYSIS - THREATAnalysis?
THREATS
External elements in the environment that
!
could cause trouble for the business -
External factors, beyond an organization’s
control, which could place the
organization’s mission or operation at risk.
Arise when conditions in external
environment jeopardize the reliability
and profitability of the organization’s
business.
Compound the vulnerability when they
relate to the weaknesses. Threats are
uncontrollable. When a threat comes, the
!
stability and survival can be at stake.
Examples - Entry of foreign competitors,
Introduction of new substitute products,
Product life cycle in decline, Changing
customer needs/tastes, Rival firms adopt
new strategies, Increased government
regulation, Economic downturn.
SWOT Analysis
Learning Objectives
What is SWOT Analysis?
Aim of SWOT
SWOT Analysis
Analysis?
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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Aim of SWOT Analysis?
HARMFUL
HELPFUL
To help decision makers
share and compare ideas.
To bring a clearer
common purpose and
understanding of factors
S W for success.
To organize the
important factors linked
to success and failure in
the business world.
To analyze issues that
have led to failure in the
past.
O T To provide linearity to
the decision making
process allowing complex
ideas to be presented
systematically.
SWOT Analysis
Learning Objectives
What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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Who needs SWOT Analysis?
• When the team has not met its
targets
2 • Customer service can be better
• Launching a new business unit
to
pursue a new business
• New team leader is appointed
Business Unit
Job Holder Company
• When supervisor has issues with
• When revenue, cost & expense
targets are not being achieved
1 work output
• Assigned to a new job 3 • Market share is declining
• New financial year – fresh • Industry conditions are
targets unfavorable
• Job holder seeks to improve • Launching a new business
performance on the job venture
Who needs SWOT Analysis?
SWOT Analysis is also
required for / during...
Changing Jobs
Product Launch
Decision Making
Personal Development Planning
Competitor Evaluation
Product Evaluation
Strategic Planning
Brainstorming Meetings
Workshop Sessions
SWOT Analysis
Learning Objectives
What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to
How to conduct
conduct SWOT
SWOT Analysis?
Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
How to conduct SWOT Analysis?
1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans
External Environment & Document
How to conduct SWOT Analysis?
1. Analyse Internal & External Environment
How to conduct SWOT Analysis?
How to conduct SWOT Analysis?
1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action Plans
External Environment & Document
How to conduct SWOT Analysis?
7
2. Perform SWOT Analysis & Document
Carry your findings forward - Make sure that the SWOT
6
analysis is used in subsequent planning. Revisit your
findings at suitable time intervals.
5
Evaluate listed ideas against Objectives -
With the lists compiled, sort and group
facts and ideas in relation to the
4
objectives.
List Strengths, Weaknesses,
Opportunities, & threats
3
Create a workshop environment -
Encourage an atmosphere conducive
to the free flow of information.
Select contributors -
Expert opinion may be
required for SWOT 2 Allocate research & information gathering tasks -
Background preparation can be carried out in two
stages – Exploratory and Detailed. Information on
1
Strengths & Weaknesses should focus on the
internal factors & information on Opportunities &
Threats should focus on the external factors.
Establish the objectives - Purpose of
conducting a SWOT may be wide / narrow,
general / specific.
How to conduct SWOT Analysis?
1. Analyse Internal & 2. Perform SWOT Analysis 3. Prepare Action
External Environment & Document Plans
How to conduct SWOT Analysis?
3. Prepare Action Plan
Once the SWOT analysis has been completed, mark each point with:
Things that MUST be addressed immediately
Things that can be handled now
Things that should be researched further
Things that should be planned for the future
SWOT Analysis
Learning Objectives
What is SWOT Analysis
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits &
Benefits & Pitfalls
Pitfalls of
of SWOT
SWOT Analysis
Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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Benefits & Pitfalls of SWOT Analysis
Benefits of SWOT Analysis
Benefits of
SWOT
Analysis
Knowing the Competion Forecasting
Reviews a company's Provides a variety of information
competitors & benchmarks critical to forecasted variables.
against them to configure Threats, for e.g., can impact a
strategies that will put the Decision Making Tool business's forecast. By
company in a competitive understanding the company's
Provides well-rounded
advantage. advantages & disadvantages,
information that prompt
forecasts will be more accurate.
well-informed decisions.
Benefits & Pitfalls of SWOT Analysis
Benefits of SWOT Analysis
Besides the broad benefits, here are few more benefits of conducting SWOT Analysis:
Helps in setting of objectives for strategic planning
Provides a framework for identifying & analyzing strengths, weaknesses,
opportunities & threats
Provides an impetus to analyze a situation & develop suitable strategies
and tactics
Basis for assessing core capabilities & competencies
Evidence for, and cultural key to, change
Provides a stimulus to participation in a group experience
Benefits & Pitfalls of SWOT Analysis
Pitfalls of SWOT Analysis
Can be very subjective. Two people rarely come up with the same final
version of a SWOT. Use it as a guide and not as a prescription.
May cause organizations to view circumstances as very simple due to
which certain key strategic contact may be overlooked.
Categorizing aspects as strengths, weaknesses, opportunities & threats
might be very subjective as there is great degree of uncertainty in market.
To be effective, SWOT needs to be conducted regularly. The pace of
change makes it difficult to anticipate developments.
The data used in the analysis may be based on assumptions that
subsequently prove to be unfounded [good and bad].
It lacks detailed structure, so key elements may get missed.
SWOT Analysis
Learning Objectives
What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming &
Brainstorming & Prioritization
Prioritization in
in SWOT
SWOT Analysis
Analysis
Tips & Exercise
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Brainstorming & Prioritization in SWOT Analysis
Brainstorming Prioritization
Output from Brainstorming exercise is Prioritized
Begin brainstorming by asking the At the end of the Brainstorming exercise:
following questions: • Reduce the list of strengths & weaknesses to no
• What opportunities exist in our more than five distinctive competencies and
external environment? debilitating weaknesses
• What threats to the institution exist in • Strengths that are distinctive competencies
• Weaknesses that are debilitating
our external environment? • Reduce threats and opportunities to the five most
• What are the strengths of our
institution? critically important of each.
• What are the weaknesses of our
institution?
SWOT Analysis
Learning Objectives
What is SWOT Analysis?
Aim of SWOT Analysis
Who needs SWOT Analysis?
How to conduct SWOT Analysis?
Benefits & Pitfalls of SWOT Analysis
Brainstorming & Prioritization in SWOT Analysis
Tips & Exercise
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Tips & Exercise
TIPS
Do’s Don’ts
Be analytical and specific. х Try to disguise weaknesses.
Record all thoughts and ideas. х Merely list errors and mistakes.
Be selective in the final evaluation. х Lose sight of external influences and trends.
Choose the right people for the exercise. х Allow the SWOT to become a blame-laying
Choose a suitable SWOT leader or facilitator. exercise.
Think out of the box х Ignore the outcomes at later stages of the
Be open to change planning process.
Tips & Exercise
TIPS
Introduce the SWOT
method and its
purpose in your Be willing to
When conducting organization to gain breakaway from
a SWOT analysis, acceptance. traditional methods.
designate a leader
or group
facilitator.
Discuss and record the
results. Prepare a written
While doing a summary of the SWOT
SWOT analysis for analysis to give to
your job, invite participants.
someone to
brainstorm with
you.
Tips & Exercise
EXERCISE
Assume that a car manufacturing company has recently
launched its products. Perform a SWOT analysis for the
same.
Tips & Exercise
EXERCISE
Helpful
STRENGTHS WEAKNESSES
• No Competition in the • High Price
EV • Low aesthetic appeal
Internal
Segment. • Small driving range [up to
• Environment friendly
• Economic to Drive [Rs. 80 KM]
0.4 • Competition from
per km] * gasoline
• Government subsidies vehicles
[8%
OPPORTUNITIES THREATS
excise duty] *
• Huge untapped EV • Government incentives
External
market to gasoline vehicles
• Growing demand of • Entry of competitors
green • Stringent safety
technologies requirements anticipated
• Rising fuel costs • Availability of hybrid
• Growing road vehicles
congestion
in urban cities
*Hypothetical figures Harmful
Tips & Exercise
EXAMPLE
Mc Donald’s SWOT Analysis
Tips & Exercise
Mc Donald’s
SWOT Analysis INTERNAL
STRENGTHS WEAKNESSES
• Ranks very high on the Fortune Magazine's • Failing pizza test market thus limiting the
most admired list ability to compete with pizza providers.
• Community oriented • High training costs due to high turnover.
• Global operations all over the world • Minimal concentration on organic foods.
• Cultural diversity in the foods • Not much variation in seasonal products .
• Excellent location • Quality concerns due to franchised operations.
• Assembly line operations. • Focus on burgers / fried foods not on healthier
• Use of top quality products options for their customers.
OPPORTUNITIES THREATS
• Opening more joint ventures. • Marketing strategies that entice people from
• Being more responsive to healthier options. small children to adults.
• Advertising wifi services in the branches. • Lawsuits for offering unhealthy foods.
• Expanding on the advertising on being • Contamination risks that include the threat of
more socially responsible e-coli containments.
• Expansions of business into newly developed • The vast amount of fast food restaurants that
parts of the world.
• Open products up to are open as competition.
allergen free options • Focus on healthier dieting by consumers.
such as peanut free. • Down turn in economy affecting the ability to
EXTERNAL
eat
that much.
Tips & Exercise
Points to Ponder
• Keep your SWOT short and simple, but remember to include important details. For
example, if you think your communication skills is your strength, include specific details,
such as verbal / written communication.
• When you finish your SWOT analysis, prioritize the results by listing them in order of the
most significant factors that affect you / your business to the least.
• Get multiple perspectives on you / your business for your SWOT analysis. Ask for input
from your employees, colleagues, friends, suppliers, customers and partners.
• Apply your SWOT analysis to a specific issue, such as a goal you would like to achieve or
a problem you need to solve. You can then conduct separate SWOT analyses on
individual
issues and combine them.
Putting SWOT to use
• Now you know your organization and the
environment it is working in,
• Now how to use it!!!
• Do a TOWS.
TOWS Matrix
Strengths Weakness
1. Availability of Time 1. No links in other parts
2. Good Reputation of of the Government.
Researcher 2. Small Skill base
3. Links with Ministry 3. Little alternative in
case of absentees.
Opportunities Maxi Max Mini Max
1. Working on topical
issue.
2. Government support
to NGO.
3. NGO support.
Threats Maxi Min Mini Min
1. Reaction to Report.
2. Chances of
Nullification of
Findings by
Government
Departments
The WT Strategy (mini-min)
• In general, the aim of the WT strategy is to minimize both
weaknesses and threats.
• An organization faced with external threats and internal
weaknesses may indeed be in a precarious position.
• In fact, such a firm may have to fight for its survival or may
even have to choose liquidation.
• But there are other choices.
• For example, such a firm may prefer a merger, or may cut back
its operations, with the intent of either overcoming the
weaknesses or hoping that the threat will diminish over time
(too often wishful thinking).
• Whatever strategy is selected, the WT position is one that any
firm will try to avoid.
The WO Strategy (mini-max)
• The second strategy attempts to minimize the weaknesses
and to maximize tile opportunities.
• A company may identify opportunities ill the external
environment but have organizational weaknesses which
prevent the firm from taking advantage of an opportunity. For
example, lack of Skills/technology in certain areas.
• One possible strategy would be to acquire this
Skills/technology through cooperation with a firm having
competency in this field.
• An alternative tactic would be to hire and train people with
the required technical capabilities.
• Of course, the firm also has the choice of doing nothing, thus
leaving the opportunity to competitors.
The ST Strategy (maxi-min)
• This strategy is based on the strengths of the organization that
can deal with threats in the environment. The aim is to
maximize the former while minimizing the latter.
• This, however, does not mean that a strong organization can
meet threats in the external environment head-on.
The SO Strategy (maxi-max)
• Any company would like to be in a position where it can
maximize both, strengths and opportunities.
• Such an enterprise can lead from strengths, utilizing resources
to take advantage
• Successful enterprises, even if they temporarily use one of
the three previously mentioned strategies, will attempt to get
into a situation where they can work from strengths to take
advantage of opportunities.
• If they have weaknesses, they will strive to overcome them,
making them strengths. If they face threats, they will cope
with them so that they can focus on opportunities.
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