SWOT Analysis

By the end of this session: 1. Everybody will be able to explain each element of the SWOT matrix and complete one on your chosen organisation 2. Most will be able evaluate how SWOT analysis can help a firm to make decisions 3. Some will be able to correctly answer a past paper question Lesson Objectives

… A strategic planning tool that separates influences on a business’s future success into internal and external factors. SWOT Analysis is…

 Define realistic goals  Improve capability  Overcome weaknesses with strengths  Identify threats than can be turned into opportunities SWOT Analysis allows businesses to…

…separates and compares internal and external influencers: A SWOT Matrix… Internal Strengths, Weaknesses External Opportunities, Threats

Can be a competitive advantage like… A strength  Superior product quality  Lowest price  Best expertise  Location

Can be a disadvantage such as… A weakness  A tired brand  Inferior location  High overheads  A lack of R&D

Elements that a business could exploit to its advantage… An opportunity can be…  A regulatory or tax change  A high-profile event (marketing opportunity)  An untapped market  A gap left by a failed competitor

Elements in the environment that could cause trouble for the business or project... A threat can be…  Unfavourable regulation changes  A new entrant into the market  Problems with the economy  Market shrinkage

StrengthsWeaknesses Worldwide known brand. Offers their customers high quality products and services. Is strongly present in several branches of the entertainment industry. Costs of operation are high. Company's name is still highly associated with an specific target audience - children. Creative and innovative ideas are required to bring and retain customers. OpportunitiesThreats Room to develop the market in emergent countries. Expansion into different segments. Develop more attractions for theme parks. Strong competitors in the entertainment industry. High competition on finding and affording the most creative human resources. Lack of protection of Intellectual property in many non-developed countries. SWOT Analysis... Example Internal Factors External Factors PositivesNegatives

Strengths of using SWOT  Easy to complete and understand  It is a source of information for strategic planning  Understanding your business better  Builds organisation’s strengths  Identifies its weaknesses  Maximize its response to opportunities  Addresses organisation’s threats  It helps in identifying core competencies of the firm  It helps in setting of objectives for strategic planning  It helps in knowing past, present and future so that by using past and current data, future plans can be written or altered.

Limitations of using SWOT  Doesn't prioritise issues  Doesn't provide solutions or offer alternative decisions  Can generate too many ideas but not help you choose which one is best  Can produce a lot of information, but not all of it is useful  Changes in the external environment such as price increases, new competitors, exchange rates and tax changes