Swot

• A firm's strengths are its resources and capabilities that can be used for developing a competitive advantage. • Strong brand names • Good reputation among customers • Affiliation/registeration with some reknowned Institutions.

• The absence of certain strengths are a weakness. • Lack of patent protection • A weak brand name • Poor reputation among customers • High cost structure • Lack of access to key distribution channels

• In some cases, a weakness may be the flip side of a strength. • For example, a firm has a large amount of manufacturing capacity. • While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

• The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include: • An unfulfilled customer need • Arrival of new technologies • Loosening of regulations • Removal of international trade barriers

• Changes in the external environmental also may present threats to the firm. Some examples of such threats include: • Shifts in consumer tastes away from the firm's products • Emergence of substitute products • New regulations • Increased trade barriers

• To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed. •

The SWOT matrix, can be changed into what is known as the TOWS Matrix that is shown on the next slide:

TOWS Analysis

OPPORTUNITIES

THREATS

STRENGTHS

S-O STRATEGIES

S-T STRATEGIES

WEAKNESSES

W-O STRATEGIES

W-T STRATEGIES

• S-O strategies pursue opportunities that fit well the company's strengths. • W-O strategies overcome weaknesses to pursue opportunities. • S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. • W-T strategies make a defensive

• Albert Humphrey (1960s-70s) 2.Satisfactory 3. Opportunity 4. Fault 5. Threat • SOFT Analysis

• Urick and Orr (1964) • From SOFT to SWOT • LET ME TELL YOU . . . . • SWOT IS A USELESS THING

• Planned Strategy: • 1-Goal or objective • 2-SWOT • 3- Evaluation SWOT Results • 4- Action

Aim Assess Activate Apply

Goal or objective Apply SWOT Evaluate SWOT Results Take action

A SWOT analysis with the objective of: "To double the business in the next Strengths and Weakness and three years." . Oppertunities Threats • In business since 19xx. MD has xx years of experience in the industry and as head of the company. • Sales and profits have grown steadily

• Jnr. Manager has no experience or education for his position of Sales Manager             • Marketing assistant has little marketing experience

• Sales and profits were Rs.xx million in 19xx.               • MD responds personally to all customer complaints               • MD wants to get involved in the field of marketing     • "We have an excellent reputation for quality," MD

• MD says that he is not a good executive • Employees feel free to complain directly to MD • MD can't find a good General Manager at the salary he wants to pay • Company is having trouble selling GEMA (its new product) • MD is worried about converting 5,000

• Manufactured • Stock held increased Products," too much during "Modifications" and recent months with "Repairs" have Gross resulting interest cost Profit margins greater of RS.4,000 a month than 50% • MD can't break the habit of getting involved in everything • The company does not appear to have historical trend data • They spent Rs.992,000 advertising GEMA and

• No track record of previous years growth rate • Difficulties in Selling new product • What is more realistic then? . . . . . • Redefine the objective as to INCREASE THE BUSINESS IN NEXT 3 YEARS.

• Step 1 – Information collection – In the here and now… “BE REALISTIC! AVOID MODESTY.” • Step 2 – What might be… • Step 3 – Plan of action…

• • • •

Assemble SWOT group. Manage necessary components. Set up meeting times Distribute/ complete the tool to individuals • In the group meeting, combine individual answers. Collaborate on each category. Complete the analysis. • Discuss how to use the information gathered from the SWOT for your

• SWOT may result in an exercise for the sake of an exercise (i.e. useless).

• Trust . . . . 1- in your SWOT Team 2- in your abilities to face the challenges the weakness and threats • Ability and willingness to implement change • Diversity • Time